Bao Gang United Steel: The main targets for 2025 are to produce 14.62 million mt of iron, 15.64 million mt of crude steel, and 390,000 mt of rare earth concentrate.

On July 3, Bao Gang United Steel's stock price declined. As of 13:31 on the same day, its shares fell 1.09% to 1.81 yuan per share.

The company announced on the evening of July 2 that as of June 30, 2025, it had repurchased approximately 5.58 million shares through centralized bidding, accounting for 0.012% of its total shares. The highest repurchase price was 1.8 yuan per share, the lowest was 1.79 yuan per share, and the total amount paid reached 9.9992 million yuan.

Bao Gang United Steel recently disclosed details of its 2024 annual and 2025 Q1 performance briefing, outlining key investor inquiries and the company's responses:

1. What are the company's full-year performance expectations for 2025?

Bao Gang United Steel replied: In 2025, the company will adhere to market-oriented operation principles, strengthen market awareness and precise calculation, enhance whole-process operational analysis and control focusing on "one profit and five ratios," and continuously improve operational quality.It remains committed to its goal of "building the world's best rare earth steel new materials production site and becoming an excellent rare earth steel new materials supplier." The company will accelerate structural adjustments, firmly implementing its product restructuring strategy of "premium quality steel + rare earth steel series."It will focus on comprehensive utilization of Bayan Obo resources, ensuring protective development, standardized management, and high-value utilization, while promoting breakthroughs in pre-concentration technology for associated fluorite resources and their industrialisation application. The company will establish a "four-in-one" coal chemical industry layout, advance technical upgrades for coke by-products, and improve resource utilization efficiency. The fluorite industry chain will be actively promoted. Bao Gang United Steel will steadfastly implement its strategic transformation centered on rare earths, striving to become a key national pillar for safeguarding rare earth strategic resources, a main force in Inner Mongolia's "two rare earth bases" construction, and a pioneer in the industry's high-end, green, and intelligent transformation, delivering high-quality development results to society and investors.

2. The annual report notes the steel industry's increasing shift toward "capacity reduction and stock optimization." Under this "reduction" trend, does the company plan production cuts or capacity transfers?

Bao Gang United Steel replied: To adapt to the steel industry's "capacity reduction and stock optimization," the company maintains goal-oriented operations, led by market demand and centered on profitability. It focuses on high-end product structure, high-quality operational benefits, and efficient management services, deepening R&D-production-sales collaboration. By capitalizing on trends like lightweight and durable heavy-duty vehicles, national energy structure adjustments, clean energy development, and heavy rail market demands, the company has efficiently completed high performance steel product R&D. It is adjusting its product structure with "premium quality steel + rare earth steel series" as distinctive features to meet market demand for high performance steel products.

3. What are the company's plans and layouts regarding the development of new quality productive forces?

Bao Gang United Steel replied: In recent years, the company has adhered to the direction of product structure adjustment, focusing on "high-quality premium steel + a series of rare earth steels," to refine and excel in the steel industry. Aiming for high-quality development as a comprehensive supplier and service provider of rare earth steel new materials that are leading domestically and renowned for their brands, the company promotes the serialization, standardization, and high-endization of rare earth steel varieties, and strives to advance the application of rare earth steel products in major national projects, strategic national fields, and key core enterprises. Relying on the resource advantages of the Bayan Obo mine, the company accelerates the development of resources and comprehensive utilization, achieving new breakthroughs in playing the "resource card." Centering on national strategies, industry development, and market demands, the company highlights the dominant position of enterprises in scientific and technological innovation, focusing on innovation-driven development, and continuously generating new momentum through scientific and technological innovation. In the future, Bao Gang United Steel will continue to proactively adapt to the development requirements of new quality productive forces, accelerate the optimization of industrial layouts, and build a new pattern of high-quality development with Bao Gang characteristics centered around high-end, intelligent, and green transformation and upgrading.

On May 6th, Bao Gang United Steel stated on the investor interaction platform that the Bayan Obo mine is a polymetallic co- (associated-) occurrence ore deposit, with main minerals and elements including iron, rare earths, fluorite, niobium, scandium, thorium, etc. Part of the mining rights for the Bayan Obo mine belong to Bao Gang United Steel.

Previously, Bao Gang United Steel disclosed its Q1 2025 report, showing that in the first quarter, the company achieved a total operating revenue of 15.433 billion yuan, down 13.04% YoY; and a net profit attributable to shareholders of 44.9643 million yuan, down 29.33% YoY.

When analyzing the first quarter's operations, Bao Gang United Steel stated:

In the first quarter, the overall production situation in the steel industry remained stable, but the pattern of strong supply and weak demand did not significantly improve. The cost of raw materials such as iron ore remained high, and downstream demand remained relatively sluggish.Facing the still severe industry situation, the company resolutely implemented the major decisions and deployments of the Party Central Committee and the work requirements of the autonomous regional party committee and government for deepening the reform of state-owned enterprises, firmly adhering to the business policy of "eight tasks" (adjusting the structure, expanding the market, improving efficiency, reducing accidents, strengthening performance, reducing costs, optimizing investment, and stabilizing quality), and fully promoting the implementation of "one leading, two integrations" (innovation-led, business-finance integration, research-production-marketing integration). The company continuously enhanced its core functions, improved its core competitiveness, and maintained stable and smooth production and operation of the enterprise.

First, seize the major opportunities brought by the national "two major national strategies and build up security capacity in key areas" and "program of large-scale equipment upgrades and consumer goods trade-ins" policies, the deepening cooperation actions in the autonomous region, the strategic industrial layout in the autonomous region, and the construction of the "six projects," which drive the development of industries such as industrial equipment renewal and new energy, boosting the demand for steel materials. On one hand, we accelerated the adjustment of our product mix towards high-end products, expanded the supply of steel materials in our industrial layout. On the other hand, we continued to deepen cross-regional cooperation, constantly extending and integrating the supply chain and industry chain. While ensuring the steel supply for major projects, we expanded the market increment in key regions, striving to create a win-win situation of "expanding markets and increasing revenues" and high-quality development. Second, we continued to deepen the "eight tasks" and made every effort to improve operational quality. We adhered to the strategy of adjusting our product mix towards "high-quality premium steel + a series of rare earth steels", and promoted product mix adjustment centered around "long-term stable profitability of the steel main business", focusing on creating a batch of core products with market competitiveness. We actively integrated into national and regional development strategies, optimized sales channels, and increased sales and revenues of high-efficiency products. We established a systematic, scientific, standardized, and highly efficient full-process quality management system, winning customer trust with high-quality services. Third, we insisted on elevating the "one guidance, two integrations" to a height crucial for the vitality and competitiveness of the industry. Combining it with reality and business, we promoted reform and innovation as the primary competitiveness, penetrating it into production lines, markets, customers, and all links of the industry chain and supply chain, forming incremental benefits and becoming a comprehensive comparative competitive advantage.

Bao Gang United Steel's 2024 annual report disclosed that in 2024, the company achieved an operating revenue of 68.089 billion yuan, a year-on-year (YoY) decrease of 3.51%; a net profit of 265 million yuan, a YoY decrease of 48.64%; and a basic earnings per share of 0.01 yuan. The company proposed to distribute a cash dividend of 0.02 yuan (tax included) per 10 shares to all shareholders. In 2024, the company produced 14.21 million mt of iron, 14.99 million mt of steel, and 14.12 million mt of commercial billets and materials, produced 377,300 mt of rare earth concentrate, and produced 578,400 mt of fluorite concentrate.

When analyzing the core competitiveness during the reporting period, Bao Gang United Steel's 2024 annual report showed:

(I) Production Capacity and Equipment Advantages In terms of steel, the company has formed an annual production capacity of 17.5 million mt of iron, steel, and materials, with an overall equipment level reaching the first-class standard domestically and internationally; it has formed a production pattern of four premium product lines: "sheets & plates, tubes, rails, and wires". It owns production lines such as CSP, wide and heavy plates, the world's advanced 2250mm hot continuous rolling and supporting cold rolling continuous annealing, galvanizing, etc., with an annual production capacity of 9.7 million mt, capable of producing high-end products such as automotive sheets, high-grade pipeline steels, and high-strength structural steels, which are widely used in wind power, machinery, bridges, shipbuilding, petroleum, natural gas, military industry, and other fields. Its process technology is world-leading, and it is the largest sheet production base in north-west China. It owns five seamless tube production lines with an annual production capacity of 2 million mt, capable of producing products such as oil casing tubes, pipeline tubes, high-pressure boiler tubes, and structural tubes, which are widely used in national key projects such as the National Grand Theatre, Shanghai Pudong Airport, and the Bird's Nest, as well as in major oilfields of PetroChina and Sinopec. It has successively obtained professional certifications from multiple countries such as the United States and Germany, and is one of the seamless tube production bases with the most complete variety and specifications in China. The company operates two world-class universal rolling mill high-speed rail production lines with an annual capacity of 2.1 million mt, capable of producing various rail products for domestic and overseas railways. These products are widely used in key national projects such as the Beijing-Shanghai High-Speed Railway, Beijing-Guangzhou High-Speed Railway, and Qinghai-Tibet Railway, making it the world's most advanced and largest high-speed rail production site. It also has three bar and wire rod production lines with an annual capacity of 2 million mt, producing hot-rolled ribbed bars and plain round bars extensively applied in major national projects like the Three Gorges Dam and Jiangyin Bridge, establishing itself as a crucial high-end bar and wire rod production base in north-west China. Additionally, the company possesses an 8 million mt coke production capacity, ensuring raw material supply for its blast furnaces. In resource development, it has a 450,000 mt rare earth concentrate production capacity and an 800,000 mt fluorite capacity, providing raw materials for the rare earth smelting and separation industry and fluorine chemical sector.

(II) Mineral Resource Advantages The Bayan Obo mine, renowned as the "Treasure Mountain" and "World Capital of Rare Earths," is a globally celebrated resource treasure owned by controlling shareholder Baotou Steel Group. Its cumulative proven iron ore reserves reach 1.26 billion mt, with the world's largest rare earth resources, second-largest niobium reserves after Brazil, and China's largest associated fluorite resources. The Bayan Obo ore mined by Baotou Steel Group is exclusively supplied to the company, which holds development rights for these resources. The company's Bayan Obo West Mine is a polymetallic deposit co-associated with iron and rare earths, containing 660 million mt of proven iron ore reserves. Its Bayan Obo tailings pond holds approximately 200 million mt of resources with about 7% rare earth grade, ranking as the world's second-largest rare earth deposit.

(III) Competitive Advantages in Rare Earth Steel New Materials The symbiotic iron and rare earth resources of Bayan Obo create the company's unique "rare earth steel" characteristics—stronger, tougher, and more durable steel containing rare earths, widely favored by users. Currently, it produces high-end automotive steel, home appliance steel, high-grade pipeline steel, and high-strength structural steel, filling gaps in Inner Mongolia and central-western China.

(IV) Sales Network Advantages The company has established a nationwide marketing network centered in Baotou. Domestically, it built a "6+1" regional service platform covering north, central, east, south, southwest, and north-west China plus a local spot sales center, creating a comprehensive sales channel system. Implementing a 500-kilometer marketing strategy, it actively captures customer bases in Baotou and surrounding markets. Internationally, through "going global" partnerships, it consolidates steel exports to traditional developed markets (Europe, US, Korea, Japan) while vigorously developing Belt and Road countries—using existing Southeast Asian, Middle Eastern, South American, and African markets as footholds to expand into South Asia and West Asia, focusing on key export regions.

(5) Geographical AdvantagesInner Mongolia is situated in the northern regions of China, connecting eight domestic provinces internally and bordering Russia and Mongolia externally. The company is located in Baotou City—an industrial hub of Inner Mongolia—proximity to coal-rich areas like Shanxi and Shaanxi, while adjacent to resource-abundant Mongolia and Russia. Its strategic position along the Belt and Road initiative underscores significant geographical and resource advantages.

Regarding the 2025 operational plan, Bao Gang United Steel outlined in its 2024 annual report: The board will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th CPC National Congress, the Second and Third Plenary Sessions of the 20th CPC Central Committee, and General Secretary Xi Jinping’s important directives for Inner Mongolia. It will thoroughly execute the central and regional economic work conference directives and the Group’s Two Sessions deployment, with forging a strong sense of community for the Chinese nation as the core task. Anchored in long-term stable profitability for the steel sector, the company will innovate to strengthen momentum, deepen reforms to enhance efficiency, and implement the operational principles of "restructuring, market expansion, efficiency improvement, accident reduction, performance strengthening, cost reduction, investment optimization, and quality stabilization." It will reinforce innovation leadership, integrate business and finance, and align R&D, production, and sales. Focus areas include technological innovation, reform deepening, cost accounting, lean production, layout optimization, risk control, and leadership assurance. Proactive measures will be taken to break barriers, develop new quality productive forces tailored to local conditions, comprehensively enhance core capabilities, and elevate core competitiveness. The company will strive to conclude the 14th Five-Year Plan successfully and meticulously plan the 15th Five-Year Plan, pioneering new frontiers in high-quality development.Annual key targets include 14.62 million mt of iron, 15.64 million mt of crude steel, 14.76 million mt of semi-finished products, 390,000 mt of rare earth concentrate, and 650,000 mt of fluorite concentrate.

On April 20, Guojin Securities issued a research report recommending a "buy" rating for Bao Gang United Steel. Key rationales include: 1) Declining period expense ratio with sustained high R&D investment; 2) Continuous product structure optimization; 3) Rising rare earth prices further enhancing strategic value; 4) Steel operations likely benefiting from production cuts and weaker iron ore prices. Risk warnings: Fluctuations in raw material prices; demand below expectations; project delays.

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