In 2025, net profit surged by 280%, and Fangda Special Steel distributed nearly half of its profits as dividends, "maintaining an open attitude toward overseas acquisition opportunities" | Financial Report Movement Insight

In 2025, Fangda Special Steel Technology Co., Ltd. (hereinafter “Fangda Special Steel”) (600507.SH) recorded operating revenue of RMB 18.23B, down 15.43% year over year. However, in the same period, the company’s net profit attributable to shareholders increased sharply by 280.18% year over year, showing a stark contrast of “revenue declining while net profit surging.” At the same time, the company plans to implement a 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, The Huaxia Times reporter asked Fangda Special Steel Chairman Liang Jianguo questions including the logic behind profit growth, the reasons for the high dividend payout, product structure planning, and the overseas market strategy.

Liang Jianguo said that the company’s 2025 performance growth was externally mainly due to the “scissor spread” effect caused by the decline in upstream raw fuel and materials prices being greater than the decline in downstream steel product prices; internally, it mainly came from the reduction 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 remains open to opportunities for overseas acquisitions. In addition, according to Wu Aiping, Secretary to the Board of Fangda Special Steel, the company’s production and operations in the first quarter of 2026 are 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 Metals Smelting and Rolling Processing Industry.” Its main businesses include processing metallurgical raw fuel and materials, manufacturing ferrous metals smelting and their rolling-processed products and by-products, and selling them. In 2025, the company achieved operating revenue of RMB 18.23B, down 15.43% from the same period last year, mainly due to lower prices of steel products. Meanwhile, in the same period, Fangda Special Steel’s net profit attributable to shareholders of listed companies was RMB 942 million, up significantly by 280.18% year over year; net profit attributable to shareholders after non-recurring items was RMB 792 million, up 349.49% year over year.

Regarding the situation where revenue fell but net profit surged, Liang Jianguo attributed it to the combined effect of “external cost tailwinds and internal management optimization.” Externally, it was mainly due to the scissor spread effect caused by the upstream raw fuel and materials price decline being greater than the downstream steel product price decline; internally, it mainly came from the company’s continuous fine-grained management, along with optimized measures in areas such as raw material procurement, production processes, and energy utilization, lowering unit manufacturing costs. It is understood that in 2025, the company’s operating cost was RMB 16.31B, down 19.96% year over year.

“Especially for spring flat steel: the company leverages advantages across the industrial chain, continuously consolidates existing market share, expands into incremental markets, and seizes market opportunities, effectively supporting the company’s performance,” Liang Jianguo said.

The financial report shows that Fangda Special Steel’s main products include rebar, wire rod, spring flat steel, truck leaf spring plate, and iron ore concentrate powder, among others. Among all types of products, spring flat steel has become the core support for performance growth.

In 2025, spring flat steel’s production and sales remained strong. Full-year revenue reached RMB 2.04B, up 29.61% year over year; gross margin was 17.67%, up 5.50 percentage points year over year. Production was 600.3 thousand tons, up 23.54% year over year; sales were 594.2 thousand tons, up 21.99% year over year. It is understood that spring flat steel is mainly used in automotive steel leaf spring plates or air-suspension steering arms. In 2025, China’s commercial vehicle market saw a moderate recovery, with heavy truck sales at 600.3k units, up 27% year over year, providing strong support for demand for spring flat steel. Liang Jianguo said the company will continue to increase R&D efforts for high-efficiency 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 594.2k, down 12.16% year over year; gross margin was 4.65%, up 3.39 percentage points year over year. Another principal business, wire rod, generated revenue of RMB 1.15M, down 8.17% year over year; gross margin was 6.48%, up 2.38 percentage points.

It is worth noting that although revenue declined, the gross margins of all steel products increased year over year. “Among them, the volume of spring flat steel, truck leaf spring plate, and wire rod—products with higher gross margin levels—was increasing, while the volume of rebar—products with lower gross margin levels—declined. This indicates that the company has been optimizing and adjusting and upgrading its product structure,” a research report from Western Securities noted.

Based on simultaneous improvement in both performance and profitability, Fangda Special Steel has also rolled out a high-dividend plan. It proposed to distribute cash dividends of RMB 2 per 10 shares for fiscal year 2025 (including tax), with a total dividend amount of RMB 453 million. Liang Jianguo said that the company’s increased profit distribution ratio for 2025 was mainly because the company and the steel industry’s profit situation in 2025 saw some recovery. Going forward, the company will continue, from the perspective of protecting shareholders’ rights and interests—especially those of minority shareholders—comprehensively consider its profit level and development needs to determine the specific profit distribution plan and actively reward investors.

In addition, financial data shows that in 2025, the company’s gross margin rose 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; and the weighted average return on equity (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 7.38B, accounting for nearly 30% of total assets, providing sufficient cash flow support for dividends.

Adhering to the product route of “combining standard and specialty”

结合行业发展趋势，展望2026年，方大特钢预判，全球经济仍面临诸多不确定性，贸易摩擦升级、地缘政治冲突等因素仍将影响海外市场需求，国内经济将持续稳步恢复，稳增长政策持续发力，钢铁行业将进入“紧平衡、优结构、提质量”的发展新阶段，供需格局、产品结构、竞争格局将进一步优化。