Against the backdrop of industry profitability recovery, Citic Special Steel's 2025 net profit attributable to parent company increased 16% year-over-year, with gross margins improving across all product lines

Everyday News Reporter | Wang Lin Everyday News Editor | Zhang Yiming

On the evening of March 16, CITIC Special Steel (SZ000708, stock price 16.52 yuan, market value 83.379 billion yuan) released its 2025 annual report. The report shows that in 2025, the company achieved operating revenue of 107.373 billion yuan, a decrease of 1.68% year-on-year, and net profit attributable to shareholders of 5.929 billion yuan, up 15.67% year-on-year. Notably, CITIC Special Steel also made a total asset impairment provision of 1.180 billion yuan in 2025, accounting for nearly 20% of the company’s net profit attributable to shareholders for the year.

CITIC Special Steel stated that its total sales target for 2026 is 19.10 million tons, slightly higher than the 18.60 million tons set for 2025. Although the company’s export volume increased year-on-year in 2025, its target for 2026 is 2.40 million tons, lower than the 2.65 million tons goal for 2025.

Gross profit margin overall increased by 2.09 percentage points compared to 2024

CITIC Special Steel is a leading global manufacturer of specialized steel materials, with an annual production capacity of approximately 20 million tons of special steel. The annual report shows that in 2025, CITIC Special Steel’s operating revenue declined by 1.68% year-on-year, while net profit attributable to shareholders and net profit after non-recurring gains and losses increased by 15.67% and 17.41%, respectively.

Looking at product segments, CITIC Special Steel’s special steel bars generated revenue of 43.61 billion yuan in 2025, up 1.35% year-on-year; revenues from special steel wires, special steel plates, seamless steel pipes, and other businesses decreased by 5.12%, 7.21%, 5.70%, and 18.79%, respectively. Notably, all product lines saw improvements in gross profit margins in 2025, with special steel bars’ gross margin increasing by 2.48 percentage points to 16.94%. This contributed to an overall gross profit margin increase of 2.09 percentage points for the company in 2025.

In addition to the gross margin improvement, cost control during the period also played a key role in boosting net profit. Specifically, CITIC Special Steel’s financial expenses and R&D expenses decreased by 12.66% and 4.34% year-on-year in 2025, while sales expenses and administrative expenses increased by 0.70% and 7.29%, respectively. R&D personnel increased by 13.09% in 2025, accounting for 17.94% of the company’s total workforce.

It is also worth noting that CITIC Special Steel made a total asset impairment provision of 1.180 billion yuan in 2025, with credit impairment losses and asset impairment losses of 278 million yuan and 902 million yuan, respectively. This amount accounts for nearly 20% of the company’s net profit attributable to shareholders for the year.

According to the China Iron and Steel Association, the national steel industry achieved profits of 115.145 billion yuan in 2025, a year-on-year increase of 140%. The annual sales profit margin was 1.89%, up 1.13 percentage points from the previous year, with steel main business profits reaching 44.5 billion yuan, turning losses into profits, and the industry’s overall profitability continuing to recover. Special steel companies, benefiting from product structure optimization and strong cost control, performed better than the industry average.

CITIC Special Steel: Industry Mergers and Restructuring to Accelerate During the 14th Five-Year Plan

In the company’s development outlook disclosed in the annual report, CITIC Special Steel stated that during the “14th Five-Year Plan” period, industry mergers and restructuring will accelerate. Specifically, the steel industry will remain in a period of adjustment, with faster consolidation. Under government guidance and market operations, a large number of comprehensive steel groups and specialized steel companies are expected to emerge, continuously enhancing China’s steel industry competitiveness and promoting a stable and orderly industry operation.

CITIC Special Steel also indicated that during the “14th Five-Year Plan,” the company’s core strategy is the “125” development plan, which emphasizes one main line: building a strategic headquarters, activating multi-base collaboration, deepening global layout and overseas mergers and acquisitions, and consolidating its leading position in the global special steel industry. Two major layouts: promoting a “main business + ecosystem” dual-driven new pattern, expanding international operations and overseas industrial layout. Five capabilities: strengthening “innovation,” “intelligence,” “green,” “collaboration,” and “service” to enhance global operation and cross-border coordination.

The reporter noted that CITIC Special Steel achieved a total steel sales volume of 19.5382 million tons in 2025, including 2.3029 million tons exported, both higher than 2024’s 18.8900 million tons and 2.2020 million tons, respectively. The company’s main production and operation goal for 2026 is a total sales volume of 19.10 million tons, higher than the 18.60 million tons target for 2025. However, the export volume goal for 2026 is 2.40 million tons, lower than the 2.65 million tons target for 2025, marking the second consecutive year of a decline in export volume targets. Regarding the reason for the lower export target in 2026, a staff member from CITIC Special Steel told the “Daily Economic News” on March 17 that they were not available to answer the phone; subsequent calls were not answered.

The 2025 annual report also shows that the company’s profit distribution plan approved by the board of directors is to distribute approximately 4.46 yuan (including tax) per 10 shares. Previously, CITIC Special Steel had implemented a 2025 semi-annual equity distribution of about 2.00 yuan (including tax) per 10 shares.

Cover image source: MEI Jing Media Asset Library