"1 Yuan Stock" Jiuquan Iron and Steel Hongxing Hits Daily Limits 3 Times in 4 Days, Cumulative Losses Exceed 8 Billion Yuan Over Past Four Years

The long-dormant steel sector has recently shown some activity, with the most notable being Jiugang Hongxing (600307.SH), which has long hovered near the “1 yuan stock” threshold. On March 18, Jiugang Hongxing once again hit the daily limit-up, marking its third such limit in just four trading days, with a total increase exceeding 20%.

As of the close on March 18, Jiugang Hongxing’s stock price was 2.42 yuan, with a daily trading volume of 1.403 billion yuan and a turnover rate of 9.50%. This long-forgotten Northwest steel giant has now successfully shed its “1 yuan stock” label, with a market capitalization surpassing 15 billion yuan.

Jiugang Hongxing is a listed subsidiary of Jiugang Group, the largest steel joint enterprise in Northwest China. It is located in Jiayuguan City in the middle of the Gansu Hexi Corridor, at the western end of the Great Wall, and was listed on the Shanghai Stock Exchange in December 2000. The company has an annual steel production capacity of over 10 million tons and operates two major steel production bases: its headquarters in Jiayuguan and Yugang in Lanzhou.

From a financial perspective, the fundamentals do not support such a “rampage” in stock price. According to the company’s previous forecast for 2025, preliminary calculations by the finance department estimate a net profit attributable to shareholders of approximately -1.879 billion yuan for 2025, with net profit excluding non-recurring gains and losses around -1.842 billion yuan.

Based on this forecast, Jiugang Hongxing has accumulated losses of over 8 billion yuan in the past four years.

The company states that in 2025, the steel industry will focus on “reducing volume and improving quality, restructuring,” showing signs of demand-supply divergence and profit recovery fluctuations. On the demand side, “manufacturing is strong, construction is weak,” with sluggish real estate dragging down steel consumption for construction, while industries like machinery and automotive are increasing their share of steel use. Falling raw material prices support profit improvement, but overcapacity and transformation pressures remain, with policies guiding the industry toward stable growth and structural adjustment. The company explains that due to overall market conditions, its operating performance in 2025 is still expected to be a loss, though losses have been reduced year-over-year.

In other words, under the broader context of China’s steel industry shrinking in scale, Jiugang Hongxing is still struggling in the loss cycle.

On the evening of March 18, Jiugang Hongxing issued another announcement regarding abnormal stock trading fluctuations. The announcement clarified that, after self-inspection and inquiry with the controlling shareholder Jiugang Steel (Group) Co., Ltd., as of the disclosure date, there are no major matters such as significant asset restructuring, share issuance, acquisitions, debt restructuring, business restructuring, asset stripping, asset injection, share repurchase, equity incentives, bankruptcy reorganization, major business cooperation, or strategic investor introduction that have not been disclosed.

On the news front, on March 10, the Ministry of Industry and Information Technology issued the “Notice on Launching the Industrial Data Foundation Action and Pilot Construction of High-Quality Industry Data Sets for AI Empowerment.” The MIIT stated that leading enterprises in key industries such as steel would be selected to form joint groups, focusing on industry data set construction and related tasks.

Regarding the overall development of the steel industry, Dongguan Securities pointed out that 2026, as the start of the “14th Five-Year Plan,” will see the steel industry focus on “controlling total volume, optimizing supply, increasing efficiency, and promoting transformation.” On the supply side, capacity structure will continue to optimize, with production under constraints like “anti-involution” and environmental restrictions leading to more rational output. On the demand side, supported by equipment upgrades, old-for-new policies, and steel exports, infrastructure and manufacturing steel demand will remain resilient. Raw material prices for iron ore and coking coal are expected to fluctuate mildly, with a structural transformation in steel demand. Steel companies’ profits are likely to further recover, and enterprises leading in special steel, green steel, and transformation will benefit from industry growth dividends.