In 2025, net profit surged by 280%, and Fangda Special Steel distributed nearly half of its profits as dividends.

Huaxia Times (www.chinatimes.net.cn) reporter Li Beibei, Shanghai

In 2025, Fangda Special Steel Technology Co., Ltd. (hereinafter “Fangda Special Steel”) (600507.SH) achieved total operating revenue of RMB 18.233 billion, down 15.43% year over year. However, in the same period, the company’s net profit attributable to shareholders surged 280.18% year over year, showing a contrast of “revenue declines while net profit rises sharply.” Meanwhile, the company plans to implement a cash dividend of RMB 453 million, with the dividend amount accounting for 48.04% of net profit.

At an online earnings briefing held on the afternoon of March 31, on questions including the logic behind profit growth, the reasons for the high dividend payout, the product-structure layout, and its overseas market strategy, a reporter from Huaxia Times asked Fangda Special Steel Chairman Liang Jianguo questions.

Liang Jianguo said that the company’s performance growth in 2025 was mainly externally driven by a “scissor-gap” effect created by the upstream raw fuel material price decline being greater than the downstream steel product price decline, while internally it mainly came from reductions in unit manufacturing costs. In particular, spring flat steel effectively supported the company’s performance. In 2026, the company will carry out overseas business based on its own product structure and will remain open to opportunities for acquisitions abroad. In addition, according to Wu Aiping, the secretary to the board of Fangda Special Steel, the company’s production and operations in the first quarter of 2026 remained stable, maintaining a “full production and full sales” status.

Spring flat steel gains momentum

According to the annual report, Fangda Special Steel falls under “Manufacturing—Ferrous metal smelting and rolling processing.” Its main businesses include processing metallurgical raw fuel materials, manufacturing and selling ferrous metal smelting and rolling-processed products and their by-products. In 2025, the company achieved operating revenue of RMB 18.233 billion, down 15.43% from the same period of the previous year, mainly due to lower steel product prices. However, in the same period, Fangda Special Steel’s net profit attributable to listed-company shareholders was RMB 942 million, up significantly 280.18% year over year; net profit attributable to shareholders after deducting non-recurring items was RMB 792 million, up 349.49% year over year.

Regarding the situation where revenue fell but net profit increased sharply, Liang Jianguo attributed it to the “dual effect of external cost tailwinds and internal management optimization.” Externally, the main factor was the scissor gap caused by the upstream raw fuel material price decline being greater than the downstream steel product price decline; internally, the main source was the company’s ongoing fine-grained management, with optimization measures in areas such as raw-material procurement, production processes, and energy utilization, thereby lowering unit manufacturing costs. It is reported that in 2025 the company’s operating cost was RMB 16.310 billion, down 19.96% year over year.

“Especially in terms of spring flat steel, the company leverages its industrial-chain advantages, continuously consolidates its existing market, expands into incremental markets, seizes market opportunities, and effectively supports the company’s performance,” Liang Jianguo said.

The financial report shows that Fangda Special Steel’s main products include rebar, high-quality wire rod, spring flat steel, automotive leaf-spring plates, iron concentrate fines, and so on. Among these product categories, spring flat steel has become the core support for performance growth.

In 2025, the spring flat steel business saw strong production and sales, achieving full-year revenue of RMB 2.042 billion, up 29.61% year over year; gross margin was 17.67%, up 5.50 percentage points year over year. Production was 600.03 thousand metric tons, up 23.54%; sales were 594.2 thousand metric tons, up 21.99%. It is understood that spring flat steel is mainly used in automotive steel leaf-spring or air suspension guide arms. In 2025, China’s commercial vehicle market saw a mild recovery; heavy truck sales were 1.145 million units, up 27% year over year, providing strong support for demand for spring flat steel. Liang Jianguo said that going forward, the company will continue to increase R&D efforts for high-efficiency, high-benefit products such as spring flat steel and actively expand the market.

By contrast, revenue from the company’s traditional businesses declined to some extent. For example, as the company’s largest source of performance, in the reporting period rebar generated revenue of RMB 7.377 billion, down 12.16% year over year; gross margin was 4.65%, up 3.39 percentage points year over year. Another main business, high-quality wire rod, had revenue of RMB 2.806 billion, down 8.17% year over year; gross margin was 6.48%, up 2.38 percentage points.

It is noteworthy that although revenue declined, the gross margins of all steel products increased year over year. “Among them, the production and sales volumes of spring flat steel, automotive leaf-spring plates, and high-quality wire rod—whose gross-margin levels are relatively higher—are increasing, while the production and sales volumes of rebar—whose gross-margin level is relatively lower—are declining. This shows that the company has been optimizing, adjusting, and upgrading its product structure,” a research report from Western Securities stated.

On the basis of simultaneous improvement in performance and profitability, Fangda Special Steel has also introduced a high-proportion dividend plan. For 2025, it proposes to distribute cash dividends of RMB 2 per 10 shares (including tax), for a total dividend amount of RMB 453 million. Liang Jianguo said that the company’s increase in the profit distribution ratio for 2025 was mainly because the profit situation of the company and the steel industry in 2025 has shown some recovery. Going forward, the company will continue to determine profit distribution plans in a comprehensive way from the perspective of safeguarding shareholders’ rights and interests, especially those of small and medium-sized shareholders, and will take into account factors such as the company’s profitability level and development needs to specify the profit distribution plan in detail, actively returning value to investors.

In addition, financial data shows that in 2025 the company’s gross margin increased from 4.80% in 2024 to 9.65%, up 4.85 percentage points year over year; net profit margin reached 5.20%, up 4.03 percentage points year over year; the weighted average return on net assets (ROE) was 9.69%, up 7.01 percentage points year over year. The asset-liability ratio was 46.32%, down 3.87 percentage points year over year, and the financial structure continued to be optimized. As of the end of 2025, the company’s cash and cash equivalents were RMB 5.626 billion, accounting for nearly 30% of total assets, providing ample cash-flow support for dividends.

Sticking to a product route of “combining common and specialty”

Based on the industry development trend and looking ahead to 2026, Fangda Special Steel expects that the global economy will continue to face many uncertainties. Factors such as escalating trade frictions and geopolitical conflicts will continue to affect overseas market demand. Domestically, the economy will continue to recover steadily; growth-stabilizing policies will keep intensifying; and the steel industry will enter a new development stage characterized by “tight balance, better structure, and higher quality.” The supply-demand pattern, product structure, and competitive landscape will be further optimized.

Based on the above judgment, the company has clearly stated that it will adhere to the product route of “combining common and specialty,” follow a development path of “low cost, differentiation, and specialization,” maintain leadership in environmental protection technologies, keep its overall process capability at a leading level, and ensure that the industry’s unit steel profit margin remains leading—so as to accomplish the strategic tasks of the “two upgrades.”

In terms of production targets, in 2026 the company’s production and operations targets are steel products production and sales of 4.02 million metric tons, with spring-spring production of 11.023 thousand metric tons and sales of 11.325 thousand metric tons.

Meanwhile, the annual report also candidly states that it will still face multiple risks. On the market side, fluctuations in demand structure, geopolitical conflicts, and domestic capacity supply pressure may squeeze product prices and export business. On the environmental side, higher environmental standards and the “dual control” requirements for energy consumption will continue to raise environmental investment and carbon-emission costs, among other things.

In the overseas market, it is said that Fangda Special Steel has already introduced spring flat steel into international high-end markets, and the inbound quantity of new products into inventory increased 24.48% year over year. However, in 2025 overseas revenue was only RMB 110 million, down 17.29% year over year. The annual report explains that exports mainly go to regions such as Southeast Asia, Africa, and the Americas, but due to global trade protectionism, export business faces pressure.

Although overseas exports are facing pressure at present, the company has not given up its overseas layout. Liang Jianguo said that the company carries out overseas business based on its own product structure. Exports of spring flat steel follow an efficiency-first principle and the company does not overly emphasize expanding export volumes. At the same time, the company remains open to opportunities for acquisitions abroad. Fangda Special Steel’s general manager Zeng Feijun added that the recent Iran-U.S. conflict has led to shipping disruptions through the Strait of Hormuz, but the company’s export regions are mainly in Southeast Asia, and in the short term, the geopolitical conflicts in the Middle East will not have a significant impact on the company’s export orders and logistics costs. “The company will proactively assess geopolitical risks in business regions and prioritize developing markets with relatively stable political environments,” Zeng Feijun emphasized.

“2026 is a critical window period for overseas expansion by steel companies.” Wang Guoqing, director of the Lang Steel Research Center, suggested that in overseas expansion, steel companies should abandon low-end relocation and follow a route of “green steel + high-end + localization + industrial-chain synergy.” Optimize the export structure, expand into emerging markets along the “Belt and Road,” and prioritize developing the Middle East, Southeast Asia, and North Africa to increase the export share of high-end products and respond to trade barriers. In addition, costs should be further controlled, industrial-chain synergy should be deepened, joint R&D should be conducted with downstream manufacturing enterprises, supply and demand relationships should be stabilized, and supply-chain resilience should be enhanced.

It is worth noting that on March 13, Fangda Special Steel disclosed that it plans to sell the 1.62% stake it holds in Donghai Securities Co., Ltd. (hereinafter “Donghai Securities”) to Soochow Securities Co., Ltd. (hereinafter “Soochow Securities”), corresponding to 30 million shares, at a book cost of RMB 30 million. Fangda Special Steel’s financial director Jian Peng explained that the main purpose of the company’s sale of its stake in Donghai Securities is to optimize the company’s asset structure, revitalize existing assets, and align with the company’s strategic development plan and the interests of all shareholders. Jian Peng emphasized that the company will continue to maintain a strategy focused on its steel core business, while closely monitoring opportunities for new productive forces in the upstream and downstream of the industrial chain as well as those related to the steel core business.

Bo Wenxi, vice chairman of the China Enterprise Capital Alliance, believes that the policies for the 2026 Two Sessions have clearly indicated that the steel industry has entered a new stage of “reduced-volume development and optimization of existing capacity,” and this cycle will last for a considerable period. At present, the steel industry is moving into a new normal of “relative stability and break-even profitability,” optimizing structure within a stable production range, and shifting from “competing on scale” to “competing on technology.” In this cycle, enterprises’ core competitiveness is reflected in three dimensions: high-end product structure, capability for green and low-carbon transformation, and the level of industrial-chain integration and digitalization. “In the future, the steel industry will show a ‘the strong survive’ pattern—those who are stronger will prevail. High-quality development is the only entry ticket,” Bo Wenxi emphasized to the reporter.