On May 14th, Shanxi Taigang Stainless Steel Co., Ltd. (hereinafter referred to as "Taigang Stainless Steel") held its 2025 Annual and 2026 First Quarter On-Site Performance Briefing in Taiyuan, Shanxi. The company's management engaged in in-depth discussions with investors and media regarding operational results, industry trends, and future plans.
The company is currently navigating a critical phase characterized as "bottom consolidation and building momentum for a breakthrough." The 2025 annual report shows that Taigang Stainless Steel achieved annual operating revenue of 90.375 billion yuan, a year-on-year decrease of 9.97%. However, it achieved a net profit attributable to shareholders of 51.5283 million yuan, a significant year-on-year increase of 105.25%, successfully turning a loss into a profit.
This reversal is primarily attributed to the company's efforts to increase profitability by optimizing product mix and production processes, which partially offset adverse impacts from the external market. The company's cash flow and debt structure have also improved simultaneously. In 2025, the net cash flow from operating activities was 3.119 billion yuan, a year-on-year increase of 28.10%. The asset-liability ratio decreased to 43.53%, down by 4.77 percentage points year-on-year, indicating continuously enhanced debt-servicing capability. Furthermore, the company proposed a cash dividend distribution of 0.09 yuan per 10 shares (tax inclusive), with the dividend payout ratio reaching 99.49% of the net profit attributable to shareholders, highlighting its commitment to shareholder returns.
Entering the first quarter of 2026, intensified fluctuations in raw material prices temporarily pressured the company's profitability. The quarterly report indicates that rising sales prices for stainless steel products contributed to profits, but this was offset by falling prices for carbon steel products and rising procurement costs for raw materials such as nickel and chromium, collectively suppressing overall profitability. Nevertheless, the company partially mitigated cost pressures through sales volume optimization and product mix adjustments, demonstrating strong operational resilience.
Regarding the business outlook for the second quarter, the company's Chairman, Wu Xiaodi, expressed confidence. "Firstly, the structure of orders on hand is being optimized, with the proportion of differentiated products continuously increasing. Secondly, the 'Four Major Cost Improvement Projects' have been implemented, with cost reduction efforts for molten iron, logistics, energy, and quality costs entering the substantive implementation stage. The effects of these cost reductions will gradually become apparent in the second quarter," he stated.
On-site investors focused their questions on core issues such as production efficiency, valuation enhancement, R&D investment, and AI deployment. The management addressed each point, clarifying key development priorities for 2026 and conveying confidence in long-term growth.
Regarding the decline in first-quarter profits, Taigang Stainless Steel's General Manager, Shang Jiajun, explained that the core reason was the persistent imbalance between supply and demand in the industry. Prices for stainless steel products remained low, while the decline in some raw material costs did not keep pace. This significantly compressed gross profit margins. He emphasized that this was a short-term market fluctuation and that the company is addressing the situation by optimizing its product structure and accelerating order fulfillment.
The company's R&D expenses in 2025 decreased year-on-year. The company explained this as a result of "value-oriented R&D." The R&D system was adjusted to focus more on market demand and customer pain points. Shang Jiajun stated that the company is promoting collaborative R&D. In 2025, the volume of new product development increased by 22% year-on-year. The company achieved 5 world-first products and 6 China-first products. These new products are primarily targeted at high-end fields such as aerospace, nuclear power, and hydrogen energy.
Dividend distribution was another focus for investors. For the 2025 fiscal year, the company proposed a cash dividend of 0.09 yuan per 10 shares (tax inclusive), totaling a cash dividend distribution of 51.2662 million yuan. This amount represents 99.49% of the net profit attributable to shareholders. The company's Board Secretary, Zhang Zhijun, stated that while pursuing high-quality development, the company consistently values reasonable returns for investors. Maintaining the continuity and stability of cash dividends is a consistent company policy.
Furthermore, in March 2025, the company released its "Market Value Management System" and "Valuation Enhancement Plan." This is the first such valuation enhancement plan for a listed company in Shanxi Province. Management clearly stated that it will comprehensively utilize various methods, including asset restructuring, business adjustments, and entrusted management, to continuously enhance the company's investment value.
Smart manufacturing was also a topic of interest to investors. Wu Xiaodi stated that AI is always a work in progress. The company is deepening the application of "AI + Steel" to comprehensively empower the development of new quality productive forces. He revealed that the company has currently achieved a 98% visualization rate for key operational data, maintains 324 industrial robots, has implemented one hundred AI application scenarios, and has achieved intelligent centralized control for 85% of its main process procedures.
In response to questions regarding ensuring the implementation of the group's high-end strategy, management provided a response centered on "focus, acceleration, volume expansion, and efficiency improvement."
Firstly, the company will continue tackling "chokepoint" products and expand the scale of domestic substitution. The focus will be on breakthroughs in high-purity stainless steel for semiconductors, medical-grade ultra-clean stainless steel, high-temperature alloys for aircraft engines, and special stainless steel for hydrogen energy storage and transportation. The goal is to achieve batch supply for 3 to 5 key product varieties within the year. It will also expand production capacity for advantageous products like "tearable steel," ultra-pure ferritic stainless steel, and extra-thick plates for nuclear power to increase global market share.
Secondly, the company will accelerate substitution in new fields to create a second growth curve. It will deepen its presence in five major scenarios: photovoltaics, energy storage, new energy vehicles, green buildings, and environmental protection equipment. It will launch a dedicated series of stainless steel products. The company will promote the substitution of stainless steel for copper and aluminum in applications such as heat exchange, electrical conductivity, and decoration, reducing dependence on scarce resources and enhancing material recycling value.
Thirdly, the company will strengthen innovation and institutional safeguards to solidify the foundation for high-end development. It will build a tiered R&D system encompassing "production generation, R&D generation, and pre-research generation." It will ensure R&D investment to maintain continuous technological leadership. The company will deepen the integrated mechanism of production, sales, and R&D to rapidly respond to customers' customized needs and shorten the cycle from laboratory to market for new products. Furthermore, leveraging the collaborative advantages of the Baowu Group, it will integrate global R&D and market resources to accelerate high-end technology iteration and market expansion.
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