Liuzhou Iron & Steel Co Ltd

Liuzhou Steel released its 2026 interim report, with total operating revenue of 32.955 billion yuan, down 4.96% year on year. Net profit attributable to the parent company was 76.1183 million yuan, down 79.31% year on year. Net cash inflow from operating activities was 1.476 billion yuan, down 9.37% year on year. The company's asset-liability ratio was 63.01%, gross margin was 4.46%, return on equity was 0.83%, and diluted earnings per share was 0.03 yuan. The number of shareholders was 50,100, and the top ten shareholders held 83.46% of the shares.

First-half earnings forecasts from domestic listed steel companies show a marked widening of industry losses. According to an incomplete tally by Jiemian News, 15 out of 20 listed steelmakers are in the red, accounting for 75 percent. Among them, Angang Steel, Bengang Steel Plates, and Anyang Iron and Steel each reported losses exceeding 1 billion yuan, while Wujin Stainless Steel and Zhongnan Steel, among others, swung from profit to loss. Ge Xin, deputy director of Lange Steel Research Center, noted that the domestic steel market is oversupplied, while iron ore, coking coal, and coke have all stayed at elevated prices, with dual cost pressures continuously eating into steelmakers' profits. Mysteel data from Shanghai Ganglian shows that raw material price increases significantly outpaced steel in the first half, with coking coal prices up 74 percent year on year and coke prices up 57.3 percent. National Bureau of Statistics data shows that profits in ferrous metal smelting and rolling processing totaled 18.17 billion yuan in the first five months, down 42.7 percent year on year. Facing the industry downturn, product mix and resource endowments have become a dividing line. Companies such as Taiyuan Iron and Steel, Jiuquan Iron and Steel, Fushun Special Steel, and Baotou Steel have reduced losses or achieved profits through differentiated business strategies. Ge Xin believes the steel industry has completely bid farewell to the era of scale expansion, and future core competitiveness will focus on high-end product layout, full-process cost control, and upstream mineral resource support. In the short term, the traditional off-season in July and August combined with high raw material prices will limit the room for profit recovery for most steelmakers. In the medium to long term, the commissioning of high-grade iron ore from Simandou in Guinea in the second half of the year and the implementation of domestic policies to ensure coal mine supply and increase production are expected to ease raw material cost pressures.

Liuzhou Steel has disclosed its earnings forecast, estimating a net profit attributable to the parent company of 69 million to 83 million yuan for the first half of 2026, a year-on-year decline of 77.45% to 81.25%. Deducted non-recurring net profit is expected to be 49 million to 63 million yuan, down 81.84% to 85.88% year-on-year. The company stated that the sharp decline in performance is mainly due to a drop in domestic real estate development investment, a turn to negative manufacturing investment, and slowing infrastructure investment, compounded by heavy rainfall causing project shutdowns, with the steel market's strong supply and weak demand pattern remaining unimproved. At the same time, upstream raw material and fuel prices rose year-on-year, while downstream demand was sluggish, making it difficult to pass on costs, putting pressure on industry profitability. In addition, the upgrade and renovation of the company's 2800mm medium plate production line affected production and sales scale, and the full operation of ultra-low emission equipment increased depreciation and maintenance costs, with multiple factors squeezing profit margins. The company achieved a counter-trend recovery in production and operations in the second quarter by advancing collaborative efficiency initiatives.