Raising capital and introducing strategic investors. The company's future development can be expected. On July 22, the company issued an announcement stating that it plans to raise no more than 2.5 billion yuan through a private offering. The distribution targets are the controlling shareholders Shaoguan Iron and Steel and Guangwu Holdings, and plans to simultaneously introduce Guangwu Holdings as strategic investors. In the future, the company is expected to form a synergy with it at various levels such as steel trade, supply chain, waste metal recycling, warehousing and logistics. Furthermore, the company announced a new three-year shareholder return plan during the same period. Although it is consistent with the minimum dividend ratio requirement in the latest regulations, it is expected to stabilize market expectations. The company is a leader in long materials in South China. It enjoys regional steel premiums and raw fuel transportation advantages, and continues to be optimistic about the company's development. Since the above related issues have not yet been implemented, the profit forecast for the previous period remained unchanged. EPS for 20-22 was 0.70/0.81/0.98 yuan, maintaining the “gain” rating. It is proposed to raise no more than 2.5 billion yuan and introduce Guangwu Holdings as a strategic investor. According to the company's announcement (2020-40, 2020-42), the company plans to raise no more than 2.5 billion yuan in capital through a non-public offering of shares, with an issue price of 4.14 yuan/share, and no more than 604 million shares to supplement working capital. The distribution targets are the controlling shareholders Shaoguan Steel and Guangwu Holdings, of which Shaoguan Steel subscribes for 2.38 billion yuan. The capital raised will be used to supplement working capital, provide a capital base for the company's further development, and reduce the balance ratio. In addition, the company in this non-public offering also introduced Guangwu Holdings as a strategic investor. Guangwu Holdings is positioned as a productive integrated service provider with domestic influence in the future to serve the construction of the Guangdong-Hong Kong-Macao Greater Bay Area. The company is expected to have synergy effects with it at various levels such as steel trade, supply chain, waste metal recycling, warehousing and logistics. Announcing a new three-year shareholder dividend return plan to stabilize market expectations According to the company's announcement (2020-50), the company issued a shareholder dividend return plan (2020-2022), which suggests that the cumulative profit distributed in cash for the last three years is not less than 30% of the average annual distribution profit achieved in the last three years. The minimum dividend ratio requirement is consistent with the relevant provisions in the company's latest regulations (2020.3), but by independently formulating a dividend return plan, it fully reflects the importance the company attaches to the company's shareholders and is expected to stabilize market expectations. The company's cash dividend ratio in '19 was about 20%, the first dividend since '08; and the undistributed profit at the end of '19 reached 1.6 billion yuan, which was corrected for the first time since '11, so the company has certain basic conditions to achieve stable dividends in the future. Optimistic about the company's development. Maintaining the “increase in holdings” rating company as a leading long material company in South China, enjoys regional steel premiums and raw fuel transportation advantages, and continues to be optimistic about the company's development. Furthermore, successfully raising capital and introducing Guangwu Holdings as a strategic investor will further enhance the company's financial strength and business coordination capabilities within the region, so I am optimistic about the company's future development. Since related matters have not been clearly implemented, the profit forecast for the previous period remained unchanged. EPS for 20-22 was 0.70/0.81/0.98 yuan. Comparable, the average PB (2020E, Wind's unanimous expectation) was 1.10 times. Considering that the company enjoyed a location advantage and there was still room for cost reduction and efficiency, the company was given a PB valuation of 1.40-1.45 times. The BPS (2020E) was 3.86 yuan, and the corresponding target price was 5.40 to 5.59 yuan (previous value was 3.94 to 4.05 yuan), maintaining the “gain” rating. Risk warning: The progress of the non-public offering fell short of expectations, and downstream demand fell short of expectations.