Key events described in the report Xining Special Steel released the 2015 interim report. During the reporting period, the company achieved operating income of 2,371 billion yuan, a year-on-year decrease of 16.89%; operating costs of 2,052 billion yuan, a year-on-year decrease of 12.88%; realized net profit attributable to shareholders of listed companies was -236 million yuan, achieving an EPS of -0.32 yuan, and an EPS of -0.17 yuan for the same period last year. Among them, the company achieved operating income of 1.02 billion yuan in the second quarter, a year-on-year decrease of 21.17%, a year-on-year growth rate of -11.98% in the first quarter; operating costs of 1,063 billion yuan, a year-on-year decrease of 12.75% in the first quarter; and a year-on-year growth rate of -13.03% in the first quarter; net profit attributable to shareholders of listed companies in the second quarter of -157 million yuan, the same period last year -- 038 million yuan; EPS in the second quarter was -0.21 yuan, and the first quarter EPS was -0.11 yuan. Incident review: The downturn in the industry caused a sharp decline in volume prices, and losses in the first half of the year increased: mainly due to the sharp decline in volume and price due to the downturn in the industry. The company's revenue in the first half of the year fell 16.89% year on year, comprehensive gross margin decreased 3.98 percentage points year on year, and performance loss increased year on year: 1) The restricted industry was not booming enough. In the first half of the year, the company's steel production fell 3.39% year on year, and the lack of characteristics of the company's special steel products caused a large drop in product prices. The volume and price drop, which accounted for the largest share of the company's revenue, fell 24.58% year on year, and gross margin fell 1.31 percent year on year. percentage points, It became the main limiting factor for performance in the first half of the year; 2) The slump in midstream steel demand will directly affect upstream coal and iron ore. Affected by this, coke and iron powder, which account for a relatively large share of the company's revenue, also experienced a sharp decline in volume and price; 3) Although the acquisition of Xigang Real Estate brought about a 714.69% year-on-year increase in real estate sector revenue in the first half of the year, the increase in the company's overall performance was limited; 4) Although the company's three expenses and asset impairment losses decreased year-on-year, it was still difficult to reverse the loss of performance. Gross margin declined, and losses in the third quarter increased year over year: On the year-on-year side, it was also hampered by the industry downturn. Revenue for the second quarter fell 21.17% year on year, gross margin fell 8.54 percentage points year on year, and finally losses in the second quarter increased year on year. Special steel's main business structure has benefited from the “Belt and Road”: The future focus of the company's main business is, on the one hand, that the product structure will be upgraded after the completion of the technical reform project. On the other hand, the regional advantage of being located in an important area of the “Belt and Road” will help the company's performance recover. In addition to its main business, the company's acquisition of real estate business and other diversified operations will ease the current decline in the company's steel business to a certain extent. It is estimated that the company's 2015 and 2016 EPS will be 0.00 yuan and 0.04 yuan respectively, maintaining the “increase in holdings” rating.