BAOS 宝盛 2023年第2季度财报电话会议文字稿中英文

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Wang Juan

各位投资者、各位听众，下午好。欢迎参加宝钢股份2023年半年度业绩发布会。首先，请允许我介绍今天参会的VIP嘉宾及董事会成员。他们是：宝钢股份董事长邹继新先生；宝钢股份董事、总经理吴小弟先生；宝钢股份董事谢荣先生；宝钢股份副总经理傅建国先生；以及我本人，你们的老朋友，宝钢股份副总经理、董事会秘书王娟女士。正如大家所知，自今年下半年以来，无论是资本市场还是钢铁行业都进入了相当低迷的时期，在这种形势下，我相信大家开始更加关注行业以及我们公司的情况。那么，我们公司在过去半年做了什么？未来我们有什么计划？对于行业，我们又有怎样的看法？现在，让我们有请宝钢集团董事长邹继新先生进行演讲。欢迎邹先生。

Zou Jixin

尊敬的投资者朋友们，下午好。我谨代表公司衷心感谢各位亲爱的投资朋友长期以来对宝山钢铁股份有限公司的支持。现在，我想与大家分享公司今年上半年的业绩表现，同时也会介绍我们中长期的一些规划。首先回顾今年上半年的整体情况，相信大家都很清楚，整个行业正经历一段低迷期。从去年下半年至今，我们尚未看到明显的复苏迹象。自去年下半年以来，整个行业已进入盈亏平衡的边缘。中国钢铁工业协会会员企业的亏损率达到45%，黑色金属冶炼和压延加工业利润总额同比下降97.6%。尽管如此，我们克服了许多不利因素，公司利润仍位居行业第一，达到约65.2亿元人民币。营业收入约1702亿元，归属于母公司净利润45.5亿元，经营活动产生的现金流量净额（不含财务公司）113.1亿元，EBITDA 171.2亿元，每股收益0.2元，净资产收益率2.32%。利润下降的主要原因是钢材销售价格下降，与去年同期相比减少了181亿元。同时成本也有所降低，成本贡献约131亿元。当然，还有投资收益、利息等因素的影响。今年我们还释放了去年计提的部分存货跌价准备。从季度来看，第二季度相比第一季度有所改善。例如，我们的收入从179亿元增加到200多亿元，规模增加了约1亿元。每股收益在第二季度也有所增长。第二季度的改善主要得益于成本控制方面的贡献。此外，我们的财务公司也进行了一些改革，对经营业绩的增长产生了积极影响。面对市场困难局面，我们采取了一系列降本增效措施。例如，第二季度我们的净资产收益率行业百分位值达到79，吨钢利润行业百分位值达到93。同时我们也进行了一些技术创新。面对当前困难局面，我们推进了相关改革，其中关键是采购、生产和销售的一体化整合。这项改革的目的是更快地响应市场，更好地服务客户，并提高我们应对市场变化的能力。特别是在采购方面，我们持续深化六项改革，包括各类资源的采购，尽可能实施招标采购，并加强采购与生产之间的研发协调。一个亮点是我们的铁矿石库存，今年上半年库存量仅为正常运营时的一半左右，这是一个很大的进步，得益于今年的改革。在铁矿石采购价格方面，我们也充分考虑市场因素。在宝山基地的销售和研发方面，我们持续优化产品结构，不断提升产品竞争力。针对不同基地的特点，我们采取差异化的产销研一体化策略和方法。例如，在深圳基地，我们推进模拟经营机制，设立飞地产品和管理单元，快速响应市场。在宝山基地，我们扩大差异化产品，建设出口导向型基地，这是宝山基地的特色。我们在全国基地还设立了两个市场价值创造中心，整合各基地能力，提升整体实力。在营销方面，我们以高利润、高市场份额产品为核心，努力提升产品竞争力，探索市场价值，寻找差异化机会。今年在同质化产品销售方面也做了大量工作，推动同质化产品营销模式转型，加强国内外销售联动，开拓海外市场。在研发方面，我们大力开展首发产品和独有领先产品的开发和布局。同时，在重点市场和客户设立技术工作站，更加贴近市场。今年上半年，在一些重点市场设立了这些技术工作站，以便更好地了解客户需求，提供更优质的服务。我们还要求研发人员驻点各基地，更好地服务现场。今年我们还深化了技术降本增效工作。上半年降本29.9亿元，完成年度目标的102%，其中能耗贡献超过7亿元，变动成本降低16.3亿元。我们实施了许多节能项目，取得了良好效果。工序成本每吨降低106元。上半年，我们深化产品管理，持续推进

Zou Jixin

Distinguish investor friends, good afternoon. I'd like to really thank all of you our dear investment friends for your long-term support to the Baoshan Iron & Steel Corporation Limited. So, now I would like to represent the Company to share with you our performances in the beginning half of this year. And at the same time for our mid- and long-term, we're going to share with you some of our plans. So to give you an overview of the first half of this year, I think that you're all familiar with the whole industry is experiencing a kind of a slump. Everything the last half of last year, up until now in this whole year, we haven't really seen an obvious recovery ever since the last half year of last year, the whole industry has entered into a kind of margin or the border of the loss and profit. So, we have 45% of the loss rate of a CISA member companies and also year-on-year decline ratio of total profit of ferrous metal smelting in the roll industry was minus 97.6%. So, we have also overcome a lot of negative factors and our company profit still ranked number one reached about RMB6.52 billion. And also our revenue reached about RMB170.2 billion and also net profit attributed to the parent company ¥4.55 billion and the cash flow from operating activities, excluding finance company was ¥11.31 billion and EBITDA ¥17.12 billion and EPS ¥0.2 and also ROE 2.32%. So you can see this kind of reduction of the profit was mainly due to the price reduction of the sales of the steel. Therefore compared to the same period last year, there was a decline of RMB18.1 billion. And also the cost compared to last year was also reduced. The cost contribution was about RMB13.1 billion. Of course, there's also some of the investment income interest, and this year we've also had some, the provision because last year we had some provision for declining value of inventory which was released. And if you look at the Q2, compared to Q1, there was an increase. For example, our income also had some increase 179 and for the Q2 more than 200, and also we had about a RMB100 million of increase in scale. And also for the EPS, it also has a growth in Q2. Therefore compared to Q1, the Q2 increase was due to a lot of the contribution of the cost. And also our finance company also made some reforms which positively impacted on the growing of the operational performances. So faced with the difficult situation in the market, we have adopted some measures to reduce costs and raise efficiencies. For example, our ROE percentile value in the industry in Q2 reached a 79 and a profit per ton of still percentile value in the industry in Q2 reached 93 and also we've done some technological innovation as well. For example faced with the current difficult situation, we've done some related reforms. And among them, the key was really the integration of purchase of production and sales. And the purpose of this kind of reform was to more rapidly response to the market and better serve our clients and also raise our capacity to rapidly response to the market changes. Especially in terms of purchases, we continue to deepen our six reforms. For example, purchase of various resources and also we implemented all the biddings as possible. And also we enhanced R&D coordination between purchase and also production. And one highlight is the inventory of our iron ore. In the beginning half of this year, the amount of that actually is about the half of the total amount in BAU combined. Therefore, this is a very big progress. Thanks to our reforms this year. Another thing is in terms of the iron ore purchase prices we also considered a lot of the market factors and also in terms of sales and R&D in a Baoshan base, we also continuously optimize our structure and continue to improve on the competitiveness of our products because in terms of integration of a production sales and R&D, we also adopt different strategies and a method base on the characteristics of a different basis. For example, for our Shenzhen base, we actually pushed forward simulation management and mechanism and set up fly products and management units to rapidly respond to the market. And for the Baoshan base, we expanded differentiated products to build an export oriented base, which is also the feature of the Baoshan base. And another base of ours is Shenzhen base, and we have set up also two market value building centers in the nation base. Therefore, we combine the capabilities of all the basis to enhance our overall ability. And in terms of marketing and sales, we have the focus on high profit and high market share products as the core. And we try our best to improve on the product competitiveness. And also, we explore market values that seek differentiated opportunities. And this year, in terms of sales of homogeneous product, we have done a lot of work as well. And we promote the transformation of our homogeneous product marketing model and also enhanced on the linkage between domestic and our overseas sales to open up overseas markets, which is another of our strategies in terms of sales. And talking about R&D, we vigorously carried out the development and layout of debut products and unique leading products. At the same time, we also set up technical working stations in key markets and customers. So, we are very much market oriented. And in the beginning half of this year, in some key markets, we have set up these technical working stations, so that we can have a better understanding of our customers to better serve them. And also, we require our R&D staff to station at different basis, so that these staff members can better serve those spaces on-site. And this year, we also deepened the technology to reduce costs and increase efficiencies. So talking about cost reduction, RMB2.99 billion cost was reduced in H1, realizing 102 of annual target, and also energy consumption contributed over RMB0.7 billion and variable costs reduced by RMB1.63 billion. We have carried out a lot of energy conservation projects. So, we got good results from all of our previous projects. And also process cost reduced by RMB106 per ton. So for the beginning half of this year, we deepened product management and kept pushing forward Million Thousand Billion strategy. RMB1000 gross margin, and also these products, 1+1 plus M products continue to be promoted and we conduct differentiated marketing and sales. And also, we have added the silicon steel into our other differentiated products. So altogether, 12.28 million tons compared to the same time last year, there was an increase of 600,000 tons in terms of sales. So, these are some very good results from our integration of R&D and sales and also production. So, you can see in terms of export order, last year, there was 2.35 million tons and this year 2.99 million tons. So, the percentage increased from 9.8% to 11.7%. So, in the beginning half of this year, we have altogether realized the world debut of seven products, including many new products. And also the total R&D investment rate was 4.69%. And in terms of silicon steel, the wind power developed very rapidly. And around the wind power development, we provide high-quality silicon steels. And in terms of a heavy plate, as well as some steel pipe, we provide all these products in large scale projects, including welding wire steel and also hot road extra strength steel. So, in the major national projects, you can all see the application of all of these of our products. So, facing towards the future, for example, some of the overseas projects, the energy conservation and the smart manufacturing, green manufacturing, and high efficiency, et cetera are some of our focuses. And on May 1st Baosteel officially signed a contract with the Saudi Aramco and PIF to build the world first green analog carbon food process, thick plate factory, which was also the first overseas greenfield project of steel manufacturer base in China BAOS history. So, you can see our DRI was 2.5 million tons and also heavy plate reached 1.5 million tons. At the same time, we also have some other projects underway. For example, the new EVNGO silicon steel structure optimization project and also steel bar structure optimization project et cetera and also this kind of half a million tons will mainly be used into the new energy vehicles. And also so far this project has been running very successfully. And also in the Shenzhen base in Q2, we started the construction of the project and it is expected to increase the capacity by 550,000 tons in the future. We also would try to increase the competitiveness of the long steel. In the Baosteel base, we also have a lot of projects being launched. Also our Shenzhen base, we have also some optimization projects on the way. In terms of green in the low carbon in the beginning half of this year, we've also made some good results, especially in terms of energy efficiency we always try to save it. And in the beginning half of this year, rolled steel bar actually, we reached 81% of reaching a standard, the 81% of the key process energy efficiency reached the industry benchmark in the beginning half of this year, and also the green electricity transaction over 415 million KWH was reached. And also we greatly conduct a project in terms of a roof photo will take power generation project of 25.1 megawatts, which was put into operation. We also on a lot of other technological work in terms of reduction of emission and a low carbon production. We look at the whole life cycle of the product and to look at the total emission in the whole life cycle of the product. Therefore, we also enhance on the construction of the management system of the low carbon management, and we try to satisfy the national dual carbon growth. And in terms of the green products for example in Baosteel base, Shenzhen base, we have some products which we can provide to the clients. And also you can see here we have the blast furnace and also the blast furnace in Shenzhen. And we have reached the 21% cover reduction target. And now for Shenzhen project, it is ongoing smoothly. And later and speaking of the smart manufacturers, you can see here the 4 Uniform Index is 75.4% and we have unified operating rooms, all operating positions robots, and we have remote operation and maintenance and also this is online. And also we have this smart operation decision-making system. And this system strongly supports the one company and three base managements and can realize a pre-calculated operation and early warning management. And also in terms of data and application, we focus on the marketization of data. And in the first half of this year, we maintain the highest the correct rating of the global steel industry including Standard & Poor's, Moody's, and Fitch. So, we have the highest credit. At the same time, we focus on ESG in the past few years and among the China ESG listed companies, we got the five star of the pioneer 100 of the China ESG listed companies, ranking number four in the comprehensive ranking and first in the manufacturing industry. And you can see here, we are selected in the first global sustainability yearbook 2023, and also one of the Best Progressive Enterprise in this industry. And speaking of the outlook for the second half this year still we have a very big pressure in terms of demand. And in the short run we do not see any better signals. And also we have the control policies of the domestic steel capacity and production. And we support these policies and we believe these policies will continue. So total annual production of the crude steel will keep unchanged or decreased a little bit compared with that of last year. And speaking of the downstream, we believe that in terms of demand, for example, auto industry, ship building, home appliances, these industries demands are normal or still booming, but in terms of a real estate infrastructure, a construction machinery, the demand this week. And in terms of raw materials, you can see the INO prices. I believe in the second half this year, the price will be lower than the first half of this year. And the cooking coal's prices will see fluctuation. And China's domestic production capacity will increase, but in a very small extent. So in the second half this year, we believe the prices of cooking coal will see some fluctuation. Also for the steel scrap, I believe the market is closely related to the domestic crude steel production. And speaking of the domestic production, in July and August, the production was high, but in quarter four, we believe the production will go down. At the same time speaking of stimulus packages, the policies, I believe the likelihood is very low. So we need to focus on the consumption. So in September, I believe that, the demand will be good. So for the downstream, I mean, for the manufacturing industry, it is better than construction industry. So the sheet is good. And I think the second half will look very much like the first half of this year. And in the future, we will focus on the implementation of the spirit of the 20th National Congress. And also we will accelerate the reform of SOEs and accelerate the layout optimization and the structural adjustment of SOEs and next speaking of the target for the next year. So first, we need to be number one in terms of the profitability in this industry in terms of business performance, and the second is the profitability per ton of steel, which I believe is more important. And of course, it raises higher requirements for us. Key focuses. So deepen the transformation of production, sales and research. And why we focus on this job this year? Because for us, first of all, it is to be market or user centric; second, in the past, the system was very different from nowadays. So we need to have the mechanism of the PSR optimized. And also we will carry out the reform and also to spread the successful experiences. So far, I think the result is good, and our people are highly motivated for the mechanism of PSR like our Baosteel base, the synergy mechanism needs to be deepened. And also some incentive mechanisms need to be implemented. In the first half of this year, we have already announced the incentive. So for the second half of this year, we will focus on differentiated product strategy and also to avoid homogeneous competition. For example, we have mechanisms to evaluate whether we have enhanced our competitiveness of homogeneous products. Next for the cost of DAU, and we will continue to focus on costs down a further reduction of RMB1 billion because the total year target is RMB4 billion, and the priority is the liquid iron cost. In the first half of this year, the cost of DAU results was not ideal, but there are different reasons, for example, the market fluctuation but also internally, like the stability of operation of the blast furnace et cetera. So, we will focus on the stability of the operation of the blast furnace to reduce liquid iron cost, and there are many measures can be taken. For example, we leverage HiTec, improved efficiency to lower the cost. And also, for example, improve the processes or we can save energy to reduce copper reduction and also to have logistics optimization and economic furnace burden. Next, reshaping the competitiveness of auto sheets, this is our core product and also one of our core competitiveness. But in recent years, China's auto market has undergone fundamental changes. So primarily the structural changes for example, JV brands, especially Japanese brands, their production and output has been reduced. But for new entries, China, brands like the NAVs, the production is up and the Baosteel used to work with JV brands quite a lot, but now the market has changed. So how can we get adapted to this new market? So this is a question we need to think about. We need to take actions. So you can see here we say we need to reshape the competitive advantage of auto sheets. So we optimize the structure and provide better quality in order to get better market share. And we will have accountability and ownership for different workshops or companies to improve our market share. And also for the second half this share, like the new production lines are striving to achieve targets like the diversion base. For example, the 500,000 tons non-oriented and new energy silicon steel, it needs to achieve the targets of production and efficiency. And this is high-end product, which is greatly needed by this market. So product plus production plus technological indicators all need to hit the target. And our aim is that we can become profitable for the year when it puts into operation. And in the second half we'll continue to expand overseas markets the size. And the total export, our straight target is the 6 million tons. And compare with the past few years, well the export was about 4 million, so it's a big increase. So we need to leverage the geographical location of Xinjiang manufacturing base and it aims to get like 15% of the total export like the silicon steel. It can well we give priority to Xinjiang and Baosteel basis, the coastal cities for export. And for our overseas enterprises there are sales targets. And this year, we have some new layout overseas in order to improve in the marketing and channel capabilities. And speaking of the losses of Baosteel manufacturing base, for the first half of this year, it was negative for 390 million. And in the second half, it will be profitable. And so that throughout the year we are still profitable for Baoshan base so July and August it was profitable. So, I would say throughout the year, it'll not lose money. And this is not just a form nation base. Actually it is the target for Bao steel as a whole. So, we will give support to R&D of focusing on the innovation of the auto, auto steel, like the precision unchanged tools because our auto products are mainly produced in machine base. And also we can reduce our costs by, like improving the furnace burden, et cetera. Again, about the liquid ion cost, we need to control that cost. So far, the lost the furnace in nation base is stable since the 2nd of June. And the cost of the liquid has been reduced so greatly, which supports the profit making, the turnaround in nation base and next mid- and long-term strategy. I'd like to leverage this opportunity to give you a brief instruction of the strategy. So first of all, M&A, I think it's a trend for the steel industry in China. For example, within the group, we have some horizontal competition of panels, so, within the BAU group, we will need to have some M&A and also outside of BAU group, if there are good assets. We will leverage the synergy. We have opportunities to do some M&A outside of group. And then for the niche markets, also M&A for example, we can improve the integration in each segment. And next is overseas landscape. For example, we can continue to do M&A overseas. In terms of internationalization, we made some overseas base layout. For example, we have the Saudi Arabia project. Since May, we have visited Saudi Arabia multiple times to participate in the China's entrepreneur conference of the China Arab Corporation Forum. And many of our colleagues are participating in this process. And also we are promoting the application of the Sikh plate project. We are conducting a lot of overseas researchers. And also there are some construction work. So all of these have been launched and we are actively promoting this whole process. And also for some Middle East and Saudi Arabia area, so we are actively seeking opportunities in those regions. And we are investigating market on the Saudi Arabia and the surrounding regions because they have a lot of resources as well as advantages, especially in terms of green and a low carbon transformation. Therefore, we have increased our efforts in the researchers in Saudi Arabia and also the Middle Eastern regions. Therefore we're going to have the opportunities. So we will definitely increase more investments, in Middle East and Saudi Arabia. And also in terms of internationalization, on one hand we built our overseas base of steel making. And secondly, in terms of marketing and sales network, we try to enhance our capacities overseas as well. And also, we will definitely continue to raise our internationalization level, as well as our overseas marketing and sales ability. So we have already planned altogether 38 overseas marketing and sales basis. And now we already have 20 of them. And this year, we are going to have 6 million as the goal. And the BioMar Group will further expand their scale. So in the future, it can reach 8 million or even 10 million tons. Therefore, if we have the overseas marketing and sales ability or not, this will be the fundamental key of it therefore, we will increase on the overseas market expansion and international layout. So in Europe and Australia, we have all set up our R&D centers. And overseas marketing and sales, actually has very high requirements, because our product types are very high. And for example, silicon steel, steel plate and seal pipe for the automotive use et cetera. So they are very professional. Therefore, this year, we have assigned a lot of our technicians to overseas. Therefore, they can help to do the work of marketing and sales altogether in this overseas market. And also, we will regularly assign technicians to overseas, for technical support as well. And for the high-end development, our product business plans, mainly focus on the 1+ 1+ and product family strategy and also the differentiation strategy and we need to also meet the national goal of a dual carbon and try to have both technical innovation and differentiation. So we will definitely try to play the role of leading the way in the whole industry. And I think technological innovation is definitely the way for us to maintain, it's very advantageous position in the market. And talking about the differentiated products, we will continue to increase the driving force of the products. For example, the R&D and the market, the technological sales and marketing, etcetera. So for the marketing and sales strategy, we would also make some reforms to solve some problems. For example, we will develop new products. So definitely, we will have the technological innovation and a differentiation and both of the driving forces to help us to develop the high-end products. And also in terms of a smart manufacturing, we focus on the automation, for example, less humanized, or unmanaged centralized control will be created and also one click on-site, et cetera, will all be created to achieve the ultimate automation. In our full basis, we will continue to expand the automation basis and also phased towards the future. We are going to meet the smart manufacturing requirements, by adding more big data and intelligence in it. So on our platform, we need to deep mind the data from our platform to become smarter. And also, we need to speed up the data governance, and speed up governance of our data assets. Also, we need to expand the internal talent, especially in some of the application scenarios, in all of our bases as well as our views. We need to make full use of the data at hand. And then we can make effective decision based on all of this informative data especially in terms of AI, right now our AI application is at a certain level, but not high enough. Therefore, in the future we need to have higher AI concentration in our projects and also, especially in terms of our product testing and site safety and remote operation, et cetera, we would need to make some breakthrough in AI. And in terms of bringing a little carbon and environmental protection, we need to first of all increase the energy efficiency. So we need to 100% reach the energy consumption benchmark in the industry. And also we need to lower the temperature to increase the TPC turnover rate and also iron temperature drop and heat transfer and the heat charging rate to activate alternative efficiency of a stock assets. And Baoshan base and other base have already reached the ultra low emission and change animation base this year, we also make more efforts to achieve this goal and we try to reach the A level company performance level. So these last two phase this year will hopefully also realize the A level enterprise level with environmental performance and also we manage water et cetera as well. So, we propose zero waste water emission internally so China-based research that Baoshan animation basis are still catching up. And in terms of low carbon methodology, we have a technology development first of all. For example, like I mentioned the hydrogen-rich carbon cycle blast furnace. And also we have the hydrogen base, the shaft furnace and also multi-function converter, BMC and electric furnace, smelting car plate, and a melting technology of a medium and a low grade and we're going to make all of these innovations in those high-end technology development. And talking about the production line layout Baoshan base actually is planning to have the full steel scrap per EAF, long product zero carbon production line. And we have the high grade thin plate zero carbon production line in Baoshan base already. And also in Saudi Arabia, our project will also have the heavy plate zero carbon production line. So, before I talked about the carbon neutrality, so we need to enhance a lot of technological work in this regard. Since 2021, we had the construction of an intelligent carbon data platform set up. And we have built green and low carbon soft power, which is leading in the industry. And according to the international standards, we can automatically form a report in terms of a carbon footprint and also it will go through the third-party certification. So whether the CIVA requirements or the other carbon certification, they can all ensure that our data is very precise and reliable. So I think in this regard, our company is rather leading the way in the industry. So all of our products, we have the real time calculation of a carbon footprint, and we already have this kind of ability. So right now we are having the calculation platform certified by the third-party. Therefore, in the future, our platform will have even more dynamic calculation so that we can completely meet with the laws and regulations in terms of carbon emission. And in terms of high efficiency, we also try to take construction of operating center as a starting point and a deepen mold company and a multi space management mold. In China's recent years, we have iron group management model continue to be dependent. We have the full basis establishment and now we also have a purchase center, operation center, R&D center et cetera. The business division and process division, product sales and research division, they are all unified and very professional. And also this kind of one company and a multi basis management models are being carried out continuously and our BAUs and R&D and production and sales, et cetera, are all integrated together and they can very well support our one company in a multi-base management mode. So that is about the beginning half years performance. So as for the latter half years goals and planning, I would also like to discuss with you. Well, we have also some Q&A session later on, to discuss further with you. Thank you.

非常感谢董事季昕的分享。刚才邹总向我们介绍了宝钢在上半年所做的工作，以及在应对今年上半年经济发展放缓局面时采取的措施。当然，我们仍然面临诸多挑战，那么宝钢应该如何应对呢？邹总已经为我们提供了非常丰富的信息，并介绍了我们未来的目标，但我认为我们的投资者仍然有很多担忧和疑问。现在我们将为投资者留出更多时间，接下来将进行问答环节。为了让更多人有机会提问，我想强调每位分析师只能提一个问题。希望大家能够理解，这样我们可以增加投资者提问的数量。首先，让我们邀请摩根大通的[听不清]提问。

Unidentified Analyst

董事会邹总您好，各位领导好，我来自摩根大通原材料分析师团队，我叫[听不清]。首先，我想祝贺贵公司在上半年取得的优异成绩，因为整个行业都在亏损，而贵公司仍然实现了良好盈利。这充分表明我们公司在成本管理和产品竞争力方面确实处于领先地位。我的问题是请教邹总，众所周知，中国钢铁需求疲软，在这种情况下，我们未来更大的增长潜力在于钢铁的海外发展。宝钢在海外发展方面处于领先地位，我们的海外基地位于沙特阿拉伯。我想请问您，贵公司未来海外扩张的时间表目标是什么？例如，将重点关注哪些国家？除了建厂之外，是否也会考虑收购一些优质的现有资产？谢谢。

Zou Jixin

感谢您的提问。关于我们的沙特阿拉伯项目，我们都非常关注。5月1日，在沙特阿拉伯，我们与合作伙伴沙特阿美和PIF共同举行了签约仪式。签约仪式后，各项工作正在推进中，包括全球研究人员的工作以及一些国家审批流程等。此外，我们已在沙特阿拉伯签约了10多名同事，与我们的合作伙伴共同工作。因此，对于我们的沙特阿拉伯项目，我们将利用所有承诺的资源，全力投入建设这个项目。与PIF和沙特阿美这样的合作伙伴一起，我们将加强与他们之间的合作。我们的目标是将这个项目建设成为世界上首个绿色低碳固定板钢项目。这个产品问世后，我认为它在世界市场上的竞争力将非常高。同时，我希望这个项目能够获得良好的社会效益和经济效益，确保项目的整体成功。刚才您谈到钢铁企业进行海外投资或拓展海外市场。我认为全球化是宝钢国际化发展的必由之路。在中国，谈到海外营销能力，也是关于走出去；我们的研发体系建设也是关于走出去。对于海外生产基地投资，过去三年我们一直在推进。我们的原则是，尽可能多地寻找资源，但决策要非常谨慎，以确保良好的运营和管理。因此，我们不仅有沙特阿拉伯项目，还考察了许多其他项目，并且还有一些项目正在筹备中。但面对未来，我认为我们需要保持专注，比如在哪些区域，比如一带一路国家等。在一带一路国家中，我们专注于绿色低碳资产，或者低碳能源地区。今年，我们已多次前往沙特阿拉伯进行调研，现在我们对这个地方非常乐观，因为谈到能源，能源成本在我们每吨成本中所占比例越来越高。在某个时期，能源成本甚至高于原材料成本。因此，我们希望专注于绿色低碳发展，同时使我们的能源或原材料更加多元化。所以我们专注于中东地区。谈到海外布局，不仅仅是钢铁。还包括上下游产业布局，例如，我们可以专注于厚板项目。同时，我们也可以进行一些并购项目，收购和重组优质资产。到目前为止，我们不会把战线拉得太长，只专注于我们自身行业的投资，以及上下游一体化。但谈到国际化，将面临许多挑战。现在，我们开始专注于海外投资的风险管理。例如，我们拥有海外人才、人才库和培训等，这对于海外发展也是非常重要的举措。谢谢。

Zou Jixin

Thank you for your question. Our Saudi Arabia project, we all pay much attention to that. And then May 1st in Saudi Arabia, together with our collaborator, Saudi Aramco and PIF, we had the signing ceremony. And after the signing ceremony, various work is being promoted and including global researchers and also some national approval process, et cetera. And also we have signed more than 10 colleagues in Saudi Arabia down to work together with our partner. So for our Saudi Arabia project, we are going to utilize all of the committed resources to be fully committed to build this project. And then with PIF and Saudi Aramco, these kind of partners, so we will enhance on the collaboration with them. And our goal is really to build this project into world's first green low carbon fixed plate steel projects. And after this product comes out, I think its competitiveness will be very high in the world market. At the same time, I hope this project can get very good social effect as well as economic effect to ensure the overall success of this project. Just now, you talked about a steel company making overseas investments or expanding the overseas markets. So I think that globalization is an necessary road for Baosteel to take for internationalization. So in China, speaking of overseas marketing capabilities, it is also about going outside those overseas and also, our R&D system establishment is also about going out. And for the overseas production base investment, during the past three years, we have been working on it. And our principle is, we need to look for as many resources as possible, but make decision in a very cautious way, so that we can have good operation and management. So not only do we have the Saudi Arabia project, we have looked at very many other projects, and also we have some projects in the pipeline. But I think facing the future we need to stay focused, like in which area, like the belt and road, countries, et cetera. And among the Belt and Road countries, we focus on the assets that are green and low carbon, or places where are like low carbon energies. And this year, we have been to Saudi Arabia for so many times for research and study and now we are very optimistic about this place, because speaking of energy, the cost of energy, it accounts for a higher and higher percentage for our per ton cost. And in a certain period of time, the cost was higher than the raw materials. So we want to focus on green and low carbon development, and also to get our energies or raw materials more diversified. So we focus on the Middle East. By speaking of the overseas layout, it's not just about steel. But also about the upstream and downstream the industrial layout and for example, we can focus on the heavy plate project. And also, we can have some M&A projects to acquire and reshuffle for good assets. And so far, we will not just to spread the line too long, we just focus on the investment in our own industry, and also upstream and downstream integration. But speaking of internationalization, there will be a lot of the challenges. And now we start to focus on the risk management of overseas investment. For example, we have overseas talent, talent pool and training, et cetera, which is also a very important action for the overseas. Thank you.

Wang Juan

感谢您的提问，也感谢董事长回答这个问题。现在让我们邀请来自花旗银行的[听不清]。我们关注的是类似一家公司多个基地的模式，在新闻发布会上这个概念被多次提及，今天我们又谈到了运营中心或业务中心。所以我想知道，就我们的管理体系而言，如果我们要设立这个运营中心，会有什么变化？以及我们为什么要设立这个运营中心？

Wu Xiaodi

关于宝钢'一公司多基地'的讨论已经持续了十多年。在我看来，宝钢历史上的'一公司多基地'可以分为三个阶段。第一阶段从2013年左右开始，当时我们启动了湛江基地的建设。'一公司多基地'的主要任务是在不同城市建设钢铁生产基地，涉及项目人才管理等方面。那时我们还处于非常初步的阶段，在整合BAOS之后出现了另一个议题。两个基地相距数千公里，我们如何交换信息？因此当时我们专注于信息的链接或连接、通信以及一些系统性的大变革，如采购集中化、研发集中化等。对我来说，这是第一阶段。第二阶段，因为我们有四个基地，每个基地的生产水平不同，因为它们处于不同的发展阶段，人员技能也不同。所以'一公司多基地'可以提供更好的管理。例如，我们有一个工艺部门帮助每个基地快速提升生产能力。当然，这一切都围绕宝山基地展开。这涉及管理技能的共享等。在那个阶段取得了很好的成果。例如，对宝钢运营和湛江基地都非常重要的硅钢生产。在宝山基地的领导下，硅钢生产得到了极大提升。今年我们知道这个行业非常困难，但无论如何，湛江基地实现了盈利，我相信这为湛江基地奠定了坚实基础。这就是第二阶段。为什么我们要讨论运营中心？因为我们有四个基地，当我们有合同时，哪个基地来生产产品？这是一个值得我们研究的问题。这个中心是关于资源分配的优化。对于钢铁行业，我们希望实现连续、稳定、批量的生产，这样效率最高、成本最优。但客户需求多种多样，所以需要在不同基地之间进行切换，这就是不同基地的目标——实现更好的效率和利润。这样我们可以相应地进行资源分配。但过去当我们有合同或营销人员时，销售人员会说这个合同交给哪个基地下单。现在当我们有订单时，我们将订单输入系统，机器或算法会告诉我们最优选择是哪个基地。这是资源的动态优化分配，可以大大减少决策过程。生产更加连续高效，因为如果在基地之间频繁切换，效率不会好，会有停机时间和生产波动。对于制造业来说，这不是好事。第二个议题，正如继新在他的演讲中提到的，当我们有多个生产基地时，库存和资源可以共享。例如，铁矿石、煤炭、库存以及备件和组件。我们如何在基地之间共享这些资源，以最小化库存并实现资金的快速周转？这是今天的重点，也包括投资等方面。过去我们以基地为单位考虑项目，但现在我们有四个基地，例如1亿元的投资。我们应该把这笔钱投在哪里？在哪里能获得最佳投资回报？所以'一公司多基地'是一个持续的任务组。我们有运营中心。现在我们已经进入了一个新阶段，这是我们的一项重要任务，我们将继续努力。谢谢。

Wu Xiaodi

So one company multiple base in Baosteel has been talked about for more than 10 years. In my understanding, one company, multiple based in the history of Baosteel can be divided into three phases. The first phase from or around 2013, we started the construction of Jinjiang at the time. The main task of one company multiple base was to construct a steel production base in a different city regarding talent management of projects, et cetera. At that time we were at a very preliminary stage and after the integration of BAOS another topic came up. So two bases, which are thousands of kilometers apart so how can we exchange information? So at that time we focus on the linking or connection of information, communication and some systematic big change like procurement, centralized, procurement centralized R&D, et cetera. So for me, this is Phase 1 and for Phase 2, because we have four bases and every base, their production level is different, because they are in different development phase and their personnel skills are different. So one company, multiple bases can provide with better management. For example, we have a process department to help each space quickly improve their production capabilities. And of course centering around Baoshan base. So it's about the sharing of management skills, et cetera. Great results had been achieved in that base. For example, the silicon steel, which is very important for the operation of Baosteel and for Jinjiang base. And under the leadership of Baoshan base, the silicon steel production has been greatly improved. And this year, we know this industry is very difficult. But anyway, Jinjiang base is profitable and I believe that has made a solid foundation for Jinjiang base. So this was Phase 2. And why don't we talk about the operation center, because we have 4 basis, and when we have a contract, which base will produce the product? So this is a question that is worthwhile our study. So this center is about the optimization of resource allocation. For steel industry, we want to have continuous, stable, and batch by batch production, which has the highest efficiency and most optimized cost. But there are different kinds of customer, different kinds of demands. So there has to be switches among different basis and that is the target of the different basis regarding better efficiency, better profit. So, that we can have allocate we can have the resources allocated accordingly. But in the past when we had a contract or marketing people, our sales people say, this contract goes to which base the order is placed. So when we have the order, we enter the order in the system, machines the, or do some algorithm and say the most optimal choice is which base. So this is the dynamic optimized allocation of resources so that we can greatly minimize the decision-making process. And the production is more continuous and efficient because if you change on a basis, the efficiency cannot be good and there's downtime and there's fluctuation of production. And for manufacturing industry, this is not a good thing. And the second issue, or second topic, as we mentioned by Jixin in his presentation, when we have multiple production base inventory, resources can be shared. For example, iron ore, coal, inventory and spare parts and components. How can we share those resources among the basis so that we can minimize the inventory and also to have a quick turnover of the capital? So, this is a focus for today and also investment, et cetera. Well, in the past, well we think about projects in a base by base mindset, but now we have four bases, for example, 100 million investments. Where should we put this money? Where can we have the best outcome of this investment? So one company with multiple spaces, this is an ongoing task force. You have the operation center. So this, we have now entered a new phase and this is an important task of ours and we'll continue to work on that. Thank you.

Wang Juan

感谢[indiscernible]的提问，感谢吴先生的回答。现在有请来自花旗银行的[indiscernible]。

Unidentified Analyst

谢谢。我是[indiscernible]。我有一个问题想请教谢先生，是关于信息质量的。作为董事，您如何确保我们获得良好的审计结果和质量，以便管理风险？

Xie Rong

感谢您的提问。我想很多其他投资者也想问同样的问题。自从我们开始接触资本市场以来，一直有传言说一些公司实际上伪造信息。对于宝山来说，我们非常重视审计信息的质量。因此，我们持续加强财务管理系统，以确保有良好的流程并得到执行，确保我们的资产负债表和财务数据正确且精确。首先，要确保所有会计信息正确，需要一个有能力的团队。团队的技能，他们能否提供可靠的会计信息，这非常重要。我们有一个非常强大的财务团队，并且培训了很多高级管理人员。首先，他们非常有能力。其次，关于会计工作、会计政策或规则，以及对新会计规则的理解和解释，一切都做得很好。我认为管理团队提供了真实可靠的会计信息。第二，我们需要有一个健全完整的系统。我们有很多子公司和分支机构，业务规模很大，但我们需要提供集中化的会计系统。这很困难。所以我们付出了很多努力。你可以看到我们投入了很多资源，但我们使用非常一致的会计规则，在这方面投入相当多。此外，我们需要有标准化的会计工作。我们有很多子公司和分支机构，正如我们提到的，他们的技能水平不同或发展阶段不同。但我们的基础会计工作是标准化的，每项记录都必须真实反映实际业务，并且需要满足会计规则进行验证，例如合并报表等，一切都必须是真实可靠的。其次，我们在内部一体化建设、一公司多基地结构等方面建立了非常完善的内部控制体系。总而言之，我们的内部管理系统很重要，包括生产、供应、销售以及投资。对于我们不同的地方，所有这些内部控制管理都能确保公司能够进行标准化和有效的运营。同时，我们可以确保各类信息和数据的可靠性。因此，我们的内部控制非常重视这一点，我们的审计委员会、董事和外部审计师都非常关注内部控制。最后，我们的审计委员会有两个助手。一个是内部审计，另一个是外部审计机构。对于内部审计，我们更关注内部控制体系的有效性和设计的完善性，以及实施的效率。因此，我们可以非常有效地开展公司的所有业务运营，实现有效运营和有效报告等。这些都是我们获得真实有效会计信息的良好基础。至于外部审计，也非常重要。最终的财务报告需要由他们审计，他们会出具审计报告。这将显示我们的业绩、资产、财产和损失是否都能得到验证，投资者可以相信，分析师也可以据此进行可靠的分析。因此，我们需要聘请高质量的审计机构。在选择他们时，他们需要非常合格。例如，如果审计机构不合格，就会带来很多风险。因此，我们的审计委员会和董事会董事都非常重视外部审计机构的选择。我认为内部审计和外部审计机构是两个很好的助手。如果两者都很好，那么审计委员会就可以放心。因此，在我们的会议中，包括董事会会议，所有从中产生的数据实际上都可以非常客观和真实。基于此的分析会非常有价值。基于这些数据和分析师意见的决策也会非常有帮助。

Xie Rong

Thank you for your question. Well, and I think many other investors want to ask this the same question. Things we started to have the capital market, there have been rumors saying that, some companies actually falsify information. And for Baoshan, we really emphasize the quality of auditing information. So we continue to enhance the financial management system in order to make sure that they have good processes in place and the processes have been put into execution, making sure that, our balance sheet, our financial data are correct and precise. So first of all, in order to make sure that, all the accounting information is correct, you need to have a capable team. The skills of the team, whether they can produce, like, reliable accounting information. This is very important. And we have a very strong finance team, and we have trained a lot of senior management. So first of all, they are very capable. And second, speaking of the accounting, the work of accounting, the accounting policies or rules, and then the interpretation or understanding of the new accounting rules, everything has been done in a very good way. So I think the management team has provided authentic and genuine accounting information. And the second, we need to have a sound and complete system. We have a lot of subsidiaries and branches and the business size is big, but we need to provide centralized accounting systems. This is difficult. So we have made a lot of effort. You can see we have a lot of resources acquired, but we use very consistent accounting rules, and we have invested quite a lot in that. And also, we need to have a standardized accounting work. We have so many subsidiaries, so many branches, as we mentioned, by -- and their skills levels are different or development phases are different. But our accounting work of fundamentals are standardized and every records have to be genuinely reflecting the real business, and it needs to satisfy the accounting rules for the verification, for example, the combining of the sheet, et cetera, everything has to be authentic and genuine. And secondly, we have set up a very perfected internal control system in terms of our internal integrated construction, and one company, multiple base structure, et cetera. All-in-all, our internal management systems are important including the production, supply and sales and also investment. For our different places, all of this internal control management can ensure our company can have a very standardized and effective operation. And at the same time, we can ensure the reliability of all kinds of information and data. Therefore, our internal control really emphasized on that, from our Auditing Committee and our directors and our external auditors pay much attention to the internal control. And lastly, our Auditing Committee has two helpers. One is internal auditor, another is external auditing firm. For internal audit, we focus more on the internal control system effectiveness and design perfection and also the efficiency in the implementation. Therefore, we can very effectively conduct all of our business operation in a company, and we can have an effective operation and have effective reporting, et cetera. Then these are very good basis for us to have realistic and effective accounting information. And as for the external auditing, it is very important too. The final financial reports need to be audited by them and they will come up with an auditing report. And this as will show whether our performances and assets and property and loss can all be verified and then the investors can believe in it and for the analyst, they can also make a reliable analysis on it. So therefore, we need to hire a good quality auditing firm. They need to be very qualified when we select them. For example, if the auditing firm is unqualified, then we showed a lot of the risks. Therefore, our auditing committee and also our board directors pay much attention to the selection of external auditing firms. So I think that internal audit, as well as external auditing firm can be the two great helpers. If they were both good, then the auditing committee will can rest assured. Therefore, in our meetings, including the board director meetings, all this data that come out from it can actually be very objective and realistic. And then our analysis based on that can be very valuable. And then the decision-making based on these data and analyst can also be very helpful.

Wang Juan

感谢董事会成员谢荣先生非常详尽的回答。我想所有投资者在听到您的回答后，对于数据质量、信息质量以及我们内部审计和外部审计团队的工作会更加有信心，您的评论也会让这些团队备受鼓舞，未来将开展更加有效的工作。现在，让我们邀请下一位来自瑞银的[听不清]先生。请您提问。

Unidentified Analyst

感谢吴先生、邹先生及其领导团队的分享。我是来自瑞银的[听不清]。我有一个关于产能的问题，因为您在2024年提到有8000万吨的产能目标。那么到目前为止，这一目标的进展如何？能否与我们分享一下？谢谢。

Zou Jixin

在我们的规划中，我们也确实提到明年我们的产能将达到8000万吨。那么为什么我们会有1800万吨的这种增长呢？嗯，有几个原因。首先，我相信在钢铁行业，我们将迎来高质量发展。因此，我们需要有这样的生产要求。所以根据国家对钢铁行业的文件要求，他们鼓励龙头企业进行重组，以促进行业优化组织。因此，国家希望基于优秀企业进行重组以及并购，在这些细分市场中形成一到两家非常知名的公司。同时国家也鼓励跨区域企业的重组和并购，这样可以通过并购解决中小钢铁企业分布分散的区域性问题。所以宝钢是行业的旗舰企业和优势企业。因此，为了满足国家高质量发展的要求，我们肯定要在这方面承担更多责任。这是一个原因。另一个原因是为了我们未来的发展，我们肯定也需要这样的产能。我们公司有四个基地。经过几十年的发展，在人才和技术方面，我们都积累了很多优势。而现在我们发现，在当前形势下，一些优势无法得到充分发挥。因此，通过并购，我们可以真正分享我们非常好的资源，然后实现规模经济。你可以看到我们集团确实具备并购的能力和经验，因为宝钢自整合以来已经有六年的经验。在这整个过程中，我们一直在努力完善我们的一公司多基地战略。所以我认为这对我们来说是成功的。整个过程证明是容易而非困难的。如果我们现在有六个甚至更多基地，对我们来说扩张也会很容易。所以在宝钢运营的过去六年中，你可以看到我们的基础能力也得到了提升。因此，现在我们的公司有能力吸收新的基地。我们已经具备了扩张的能力、人才和技术。所以你问我我们现在在做什么。实际上，我们一直在内外寻找合适的机会，并且做了很多准备工作。所以我相信2024年的这个目标或多或少可以实现。当然，这个任务也不是那么容易完成的。这是困难的工作。我们需要考虑各方的需求。所以，我们必须关注各种考虑和方面，我们需要尽可能做好充分准备，然后才能快速实施。这就是我的回答。

Zou Jixin

In our plan, we really also mentioned that next year our capacity will reach 80 million tons. So why do we have this kind of growth of 18 million tons? Well, there are several reasons. First of all, I believe that in the steel industry, we are going to have a high quality development. Therefore, we need to have this kind of requirements of a production. So according to the nation's document requirements for these iron ore steel industry, they encourage the top companies to have reorganization to promote the optimized organization of the industry. So, the country wants to base on good countries to have a reorganization as well as M&A to form one to two very famous companies in these segmented markets. And also the country encourage across region company's reorganizations and merge an acquisition so this kind of M&A can solve the regional problems of scattered distribution of a small and medium companies that produce iron and steel. So BAU Steel is a flagship companies and advantageous companies in the industry. Therefore, in order to satisfy the national high quality growth requirements, we will definitely have our shoulder more responsibilities in this regard. So this is one reason. And another reason is for our future development definitely we need to have this kind of capacity as well. Our company has four base. Over the past decades of development, in talents and in technology, we have all accumulated a lot of advantages. And right now we found that, under the current situation, some of the advantages cannot be brought into for play. Therefore, by means of M&A, we can really share our very good resources and then we can realize our economy of scales. And you can see that our group really do have the ability and experience for M&A because BAOS already had a six years of experience since its integration. And in this whole time we always try to perfect our one company full base strategy. So I think that this proved to be successful for us. And the whole process proved to be easy rather than difficult. If we have now a six or even more basis, it'll be easy for us to expand as well. So in the past six years of BAOS was operation, you can see that we still's basic abilities have also been improved. Therefore, now our companies have the ability to absorb a new basis. We already have the ability and talent and technologies to expand. So you asked me about what we are doing right now. Actually, we've been always looking for internally and externally suitable opportunities and we are doing a lot of preparation work. So I believe that this goal in 2024 can more or less be achieved. Of course, this task is also not so easy to accomplish. It is difficult to work. We need to concern various parties of needs. So, we must focus on various considerations and aspects and we need to be fully prepared as much as possible and then we can implement rapidly. So that's my answer.

Wang Juan

非常感谢您的提问，也感谢季鑫的详细回答。现在让我们邀请高盛[听不清]。

Unidentified Analyst

邹总您好。我是高盛的钢铁行业分析师。我想向付建国先生提一个问题。实际上，我听说明年钢铁行业将被纳入全国碳交易市场。如果是这样的话，这对行业会有什么影响？贵公司为此做了哪些准备？

Fu Jianguo

感谢您的提问。我认为大家对这个问题很感兴趣，我们一直非常关注这个问题。对于钢铁行业来说，碳减排是我们行业非常重要的使命，我们行业占中国GDP的5%，而碳排放我们占15%。因此，在碳减排方面，这无疑将是我们未来几十年非常重要的使命。但至于我们应该采用什么样的技术，以及何时进行改革？这些都是对我们非常重要的问题。如果我们行动过早，可能会产生更多成本。但如果行动过晚，我们将在行业中落后，缺乏足够的竞争力。所以我们正在密切关注这个话题并进行研究。7月17日，我们召开了全国生态大会，主席在会上提出，未来节能控碳将转变为减碳控能。因此，未来我们也需要加快行动步伐，以适应国家政策的变化。此外，欧盟碳边境调节机制政策的颁布也很明确，有严格的时间表。所以明年年初，我们就要开始适用。到2026年，我们将支付碳关税。因此，中国钢铁行业面临的挑战是巨大的，因为我们的传统行业90%是高炉长流程，资产重。所以这种工艺的改革需要大量时间和投资。基于当前情况，这种国家政策推动，包括碳关税的驱动力对我们来说还不够，因为在市场上，我们缺乏这种驱动力。所以目前，我们明确的需求来自下游用户，以及作为大公司的企业社会责任。但当我们计算经济效益时，这是我们面临的大挑战。我们知道，欧洲国家现在正在进行大规模的碳减排转型，因为他们有非常明确的时间表。同时，谈到碳关税，他们的税率非常高。因此，他们的投资回报率在逻辑上或经济上都有必要进行这种转型。从欧盟公司的角度来看，碳关税可以用于支持欧盟钢铁公司的碳减排。所以现在，欧盟有30%甚至60%的资金支持来自碳减排。所以对我们来说，实际上，我们也在与政府机构沟通。我们也希望加快步伐，使钢铁能够纳入全国碳交易市场，中国环保部门也在召开许多会议。他们也要求钢铁协会开展基础研究和调研，无论是碳配额还是实现双碳目标，我们都需要大量数据的支持。而目前，我们缺乏这些数据。而且与电力行业相比，钢铁行业流程长且复杂。因此，在碳计算以及基础数据积累方面，难度更大。所以我理解，整个过程需要时间。对于宝钢来说，我们也有一些优势，并将发挥我们在技术、数据和经验积累方面的优势。我们正在与其他行业同行一起为钢铁行业进行一些基础数据研究，希望我们能更快地纳入全国碳交易市场。这样钢铁行业就必须开始碳减排的步伐，特别是低碳工艺的布局、资源配置和设备改造。我们也希望国家政府通过碳关税等方式，也能给我们行业一些财政支持。当然，作为行业龙头企业，我们也会做一些技术准备。对于宝钢来说，我们在这方面做了很多准备。我们的董事会刚才也介绍了，我们的湛江基地，我们有低碳冶金技术，湛江基地今年年底将投产，我们也将很快开始电炉建设等。所以我们正在非常积极地进行这种准备，并逐步实施碳减排改革，在大规模改革行动之前，通过节能也能降低排放。我们已经从中取得了良好效果。今年上半年，我们为公司业务做出了很大贡献。现在我们仍在进一步推进中。在绿色能源方面，你可以看到我们的工厂有太阳能电池板。今年年底和年初，在宝山你会看到风力发电。在投资方面，我们正在加大对绿色能源的投资，因为政府出台了绿色能源政策。所以我们将密切关注政策，加大对绿色能源的投资。最根本的是高炉低碳冶金技术，我们已经看到了一些成果。所以，我们有很大信心，并将密切关注国家政府的政策，加快步伐。为了应对碳排放数据，特别是明年年初，我们将开始，特别是在欧盟，碳报告。很久以前，我们就开始建立这个碳系统、碳数据系统。所以对于我们的产品，可以实现生命周期碳排放验证。我想你已经注意到，热轧产品如EPD报告已经可用。最近我们组织了一次碳审计，在我们的报告中你可以找到详细信息。对于我们的下游客户如奔驰，我们已经减少了30%的碳排放，比如我们的品牌。这种产品也经过了碳审计。所以碳审计系统经过了第三方认证检查。对于C波段，我们将相应优化我们的系统。所以到年底，我们能够补充提交此类报告。在中国，我们处于领先地位，作为负责任的公司，我们也在推动上游供应商进行碳审计和验证。他们为供应商的碳审计提供了一个平台。所以我们将充分利用宝钢的生态系统以及我们在信息技术方面的优势，来应对碳审计、碳核查、碳报告等要求。对于结果，我们将与行业分享。我们非常期待我们的低碳产品能够得到市场的广泛认可。这样，低碳技术就能快速发展，钢铁行业能够遵循中国的30·60双碳战略，并为实现目标做出自己的贡献。谢谢。

Fu Jianguo

Thank you for your question. I think people are interested in this question and we've always been paying much attention to this issue. For the steel industry, the carbon reduction is a very important mission of our industry and our industry and GDP accounts for 5% in China, and a carbon emission we account for 15%. Therefore, in terms of carbon reduction, definitely, it will be a very important mission of ours in the next decades. But as to what kind of technologies should we adopt and at what time should we reform? Well, these are all very important for us. If we move early, then maybe we would make even more cost. But if we move late, then we will be lagging behind in the industry and do not have enough competitiveness. So we are closely paying much attention to this topic and doing researches on it. So on 17th July, we held National Ecosystem Conference, and President raised the opinion in the conference that, in the future, the energy conservation carbon control will transform into the carbon reduction control, energy control. Therefore, in future, we need to also accelerate our pace of action to satisfy the change of national policy. Also, the EUC policy promulgated is also clear, with their stringent timetable. So in the beginning of next year, we are going to apply already. And by 2026, we are going to pay the carbon taxation. Therefore the China steel industry, the challenges we face are huge, because our traditional industry 90% of it is the faster furnace base with heavy assets. So with reform, of this kind of process, it takes much time and a lot of investments. So based on the current situation, this kind of a national policy promotion, including the carbon taxation driving force is not enough for us, because in the market, we lack this kind of driving force. So right now, our clear demand comes from our downstream users, as well as the corporate social responsibility as a big company. But when we calculate economic benefits, this is our big challenge. As we know, European Countries, they have now a large scale carbon reduction transformation, because now they have very clear timetable. And at the same time, talking about carbon taxation, their taxation is very high. Therefore, their ROE is very logical or it is necessary for them to have this kind of transformation economically. And from the EU companies perspective, for them, carbon taxation can be utilized in supporting the steel company carbon reduction in EU. So right now, 30% or sometimes even 60% of the fund support is in EU and this fund comes from the carbon reduction. So for us, actually, together with national government organizations, we are also communicating with them. So we also hope to accelerate our pace, so that steel can be incorporated into the national carbon transaction market and also Environmental Protection Bureau in China are also having many conferences. They also require this Steel Association to carry out basic researchers and study, so whether the carbon quota and also to achieve carbon duality goal, we all need the support of lot of data. And right now, we lack this data. And also still industry compared to electricity industry, their process is long and complicated. Therefore, in terms of carbon calculation as well as accumulation of the basic data, it is more difficult. Therefore, I understand that, it takes time for this whole process. And for Baosteel, we would also have some advantages and bring into for play our advantages of our accumulation of technologies and the data and experience. And we were together with other industry counterparts to conduct some basic data research for the steel industry, so that I hope that we can more rapidly be incorporated into the national carbon transaction market. So then the steel industry came and must start our steps in the carbon reduction, especially layout of the low carbon process and the distribution of resources and the transformation of equipment. So we also hope that country government, by means of a carbon taxation, can also give our industry some financial support. Well, as a flagship companies in the industry of course, and we will also make some technological preparation. And for Baosteel, of course, we make a lot of preparation in this regard. Our board director just now also introduced us, our Jinjiang base, and we have the low methodology and Jinjiang base by the end of this year, we'll be put into production and also we will soon start operation electric furnace construction, et cetera. So we are very actively carrying out this kind of a preparation and step by step we're going to implement the carbon reduction reform and before the big reform actions also by means of energy saving and we can lower the emission reduction as well. So we've already got good results from it. In the beginning half of this year, we made a big contribution for the Company business as well. So now we are still in the process of further promoting it. And in terms of green energy, you can see that in our plants there are solar panels. And by the end of this year, and beginning of this year in Baoshan, you will see wind power. And in terms of investment, we are investing more in green energy because there are policies issued by the government regarding green energy. So we'll closely follow the policy to invest more in green energy. And the most fundamental is the high gross methodology anything than we've seen some results. So, we have great confidence and we will closely follow the national government's policies to step up. And in order to deal with the carbon emission data and especially beginning of next year, we will start especially in the European Union, the carbon report. Long time ago, we've started the establishment of this carbon system, carbon data system. So for our products, the lifecycle carbon emission verification can be realized. I think you have noticed that for hot roll like EPD reports are available. And recently we've organized a carbon audit and in our reports you can find the detailed information. For our downstream customers like Benz, we've reduced 30% of the carbon emissions like equal that's our brand. And this product has also been audited in terms of carbon. So for the carbon auditing system, it is undergone the third-party certification check. And for C-band, we are going to optimize our system accordingly. So by the end of the year, we are capable of a supplement of submitting such reports. And in China we are well ahead and as a responsible company, we are also promoting our upstream suppliers to carry out their carbon auditing and verification. And they have provided a platform for the supplier's carbon auditing. So we will greatly leverage the ecosystem of bio-steel and also our strengths in information technology to deal with the carbon auditing, carbon check, carbon report these kinds of requirements. And for the results, we'll share those results with the industry. So we greatly look forward that our low carbon products can be greatly received by this market. And as a result, the low carbon technologies can develop very quickly and the steel industry can follow China's the 30:60 dual carbon strategy and also to contribute ourselves to the hitting of the target. Thank you.

Wang Juan

感谢[indiscernible]的提问，也感谢建国非常全面的回答。接下来，我们邀请来自中金公司[indiscernible]提问。

Unidentified Analyst

大家好，感谢管理层分享上半年的业绩成果。我有一个问题想问吴总。最近我们注意到一些地方政府发布了关于产能或产量削减的规划，但从我们掌握的数据来看，粗钢尤其是生铁的实际产量仍处于较高水平。进入9月后，您对供需格局和市场变化有何看法？不同地区或市场之间会有何差异？这对宝钢会产生怎样的影响？

Wu Xiaodi

感谢[indiscernible]先生的提问。这确实是最近非常热门的话题。我们身处这个行业，能够感受到对于中国钢铁制造业来说，产能过剩问题已经持续多年。因此从2020年开始，我国政府一直在强调需要控制产量、控制产能。过去几年里，你可以看到在投资方面，新投资已经被压缩。市场发挥着作用，行业政府也发挥着作用，其目标是中国钢铁制造业的高质量发展。我认为有必要制定新一轮的钢铁产量或产能规划。所以，我认为中国钢铁制造业将继续削减产能。这是一个趋势，而且这个趋势变得越来越明显。对于今年下半年的政策走向，我认为宝钢严格遵守政府要求来减少或控制产量。今年的政策与去年相比，总量变化不大，只是略有减少。但如果你看数据就会发现，今年前七个月，我们的钢铁产量更高，增加了1500万吨。因此，如果全年产量不高于去年，就意味着今年下半年我们必须减产。我认为减产量将在3000万到4000万吨左右。对于钢铁行业来说，我认为这是个好消息，因为我们希望实现高效生产，满足市场需求，而不是为了生产而生产、为了降低成本而生产。为了维持盈利能力，很多公司都面临很大困难。从数据中可以看到，巴西行业处于盈亏平衡点，很明显钢铁制造商的盈利能力已经下降。整个行业不赚钱。对于宝钢整体而言，实际上今年年初我们就已经预测到了政策趋势，即产量控制。这就是为什么从今年年初开始，我们在集团内部与多个基地的地方政府进行了沟通。我们寻求积极合作，因为我们的产能非常先进。所以在集团内部，我们购买了一些产能指标。在一些城市或省份，他们给予了我们非常积极的政策协调。因此他们可以将部分产能分配给宝钢。所以我要说，就宝钢的总产量或产能而言，影响并不那么大，因为我们是市场驱动、需求驱动的。我们只以合理的方式接受合同或订单，保持合理的生产节奏，做好我们的工作。因为市场已经改变，市场变化非常快。我们不玩回马枪。我们在运营原则方面保持一致。我们只接受有利可图的订单来安排我们的生产节奏。

Wu Xiaodi

Thank you Mr. [indiscernible] for your question. Exactly this is a very heated topic recently. We are in this industry and we can feel that for China, it's a steel making industry. Oversupply has been chewed since several years ago. So starting from 2020, our government has been saying that we need to control the output, control the capacity. And during the past few years, you can see that in terms of the investment, new investment it has been squeezed. So market has a role to play and also the industry government has a role to play and it aims at quality development of China's steel making industry. And I think it is necessary to have a new round of plan or planning for the steel output or capacity. So, I think China's steel making industry will continue to reduce its capacity. This is a trend and it is a trend that has become more and more obvious. And for the second half of this year, how the policies will look like? For this question, I think, Baosteel was strictly follows government's requirement to reduce or control the output. This year the policy compared with last year, the total amount does not change very big, just a slightly deduction. But if you look at the data, you realize that, for the first seven month of this year, our steel production was higher, up by 15 million tons. So throughout the year, if our output is not going to be higher than last year it means in the second half of this year, we have to reduce our production. And I think it will be around 30 million to 40 million tons. And for steel industry I think it's good news because we want to have a efficient production, where there is need in the market instead of pursuing production for the purpose of production and reduce the cost. In order to maintain profitability, it is very difficult for a lot of companies. You can see from the data that, Brazil industry breaks even, and it is obvious that, the steel maker industry's profitability has gone down. The industry does not make money. So for Baoshan, as a whole, this year, actually, at the beginning of this year, we already forecasted the policy trend, i.e., the control of production. That's why from the beginning of this year, within our group and we have communicated with local governments of our multiple basis. We sought proactive cooperation, because our capacity is very advanced. So within our group, we purchased some capacity quota. And in some cities or provinces, they have given us very, progressive policy coordination. So they can give some of the capacity to Baosteel. So I will say that, with regards to Baosteel's total production or capacity, the impact is not that big because we are market driven, demand driven. So we only accept contracts or orders in a reasonable way to maintain a reasonable production pace to do our job well. Because the market has changed, the market is changing very quickly. We do not play back. We are consistent regarding our operation principles. We only accept the profitable orders to arrange our production pace.

Wang Juan

感谢[indiscernible]的提问，也感谢Xiaodi的回答。接下来，让我们邀请来自[indiscernible]的提问。

Unidentified Analyst

我的问题是向邹先生请教关于硅钢的情况。我们知道今年硅钢价格有所下降，请问您认为原因是什么？您的预测如何？以及贵公司在硅钢方面有何规划？

Zou Jixin

首先，关于价格下跌。为什么？我认为原因在于供应方面，因为有很多钢铁企业涉足硅钢业务，我们经常关注新闻。我们看到这家公司说要投资硅钢生产线来生产硅钢。很多生产线已经投产。结果就是供应增加了，但供应增长超过了需求，所以出现了产能过剩。因此，中低端规格的硅钢过剩问题更加明显。我认为这不仅对宝钢如此，对其他钢铁企业也是如此。对于这种低端规格的产品，由于供应过剩，它们很难赚钱。这是主要原因。但对于高端产品，特别是高效硅钢，我们的产品盈利能力非常好。所以对于高端导向的硅钢，价格高，盈利能力强，问题在于中低端产能过剩。这对宝钢的硅钢计划造成了很多问题。这是我们的第二战略品类。我们一直在讨论硅钢计划。多年前就制定了很多计划，现在正处于实施阶段。如果没有这些计划，我们今年不可能取得这么好的盈利能力。谈到未来，我们的硅钢战略仍然是成为全球硅钢第一。第一意味着什么？当然，一方面是产量和规模。我们需要成为第一。我们已经做到了第一。第二是产品结构。我们需要拥有最优化的产品结构。正如我提到的，中低端产品竞争激烈。所以我们需要专注于高端导向的硅钢。因此需要拥有最好的技术。每年，我们都有一些全球首发的硅钢产品。所以我们的工艺、设备都是优先技术。我们在技术方面也是第一。关于具体计划，比如取向硅钢，今年产量是100万吨，产能也是100万吨。明年下半年，产能将达到116万吨，部分生产线将在明年年中投产。我们有深圳基地。每个基地的硅钢产量将增加约8万吨。到2022年，产量将达到160万吨。其中，我们的高端产品，0.23毫米以下的产品，行业内只有少数几家公司能够生产。所以我们不仅有大量产能，而且具有很强的竞争力。对于这类高端硅钢，我们也在优化宝山基地的运营，未来将有50万吨钢材用于新能源汽车，这些都是高牌号硅钢。这些都是非常高端的产品。现在它们已经有利润了，年底将实现大幅盈利。深圳基地与宝山基地非常相似。今年6月底，深圳基地举行了开工仪式，也开始生产用于新能源汽车的高牌号硅钢。基于此，我们还有其他未来计划。所以这些都是非常高端的产品，盈利能力非常好。因此，对于高端硅钢，我们需要调整结构。所以我们更多地生产高牌号钢，而不是中小牌号钢。我们正在逐步实施这些计划，我们的目的是在硅钢领域继续保持我们非常强的竞争力。

Zou Jixin

So first of all, the price decline. Why? The reasons, I think the reasons lie and the supplies, because there are so many SEO companies who have business in the silicon steel and we watch news very often. We see this company says we will invest in the silicon steel production lines to produce silicon steel. And a lot of production lines have been put into operation. As a result, you have increased in supply, but the supply outgrowths the demand, so you have over capacity. As a result, so low and mid specs can see oversupply issue more obviously. I think not only it is true to Baosteel, but also for other steel makers. For this like there's low spec, it is very difficult for them to make money, because there's over supply. This is the main reason but for high-end products, especially for high efficient silicon steel. We have the product and the profitability is very good. So for a high-end oriented, so you can steel, the prices are high, the profitability is good, so the problem lies in the mid end and low end over capacity. These do a lot of problems as to the plans from Baosteel for silicon steel. This is our second strategic category. So we have been talking about the plan for silicon steel. Many years ago and a lot of plans were made many years ago and now we are in the implementation stage. So without the plans we couldn't have made so good profitability this year. Speaking of the future, our strategy for silicon steel, we still need to be number one of silicon steel worldwide. What does number one mean? Of course, one thing is production and scale. We need to be number one. We are already number one. We have the second thing that is the structure of the products. We need to have the most optimized structure of the product. As I have mentioned, there's fierce competition in the mid end and low end products. So we need to focus on the premium, high-end oriented silicon steel. And so you need to have the best technologies. Every year, we have some first launch products in silicon steel worldwide. So our processes, our machineries are priority technologies. So, we are number one in technologies too. As to the specific plans like the oriented silicon steel, this year the production is 1 million and the capacity is also 1 million. Next year, the second half of next year, it will be 1.16 million tons capacity and some of the production lines will be put into operation in the middle next year. So we have Shenzhen base. Each will have like 80,000 tons increase in terms of silicon steel. In 2022, the volume will be 1.6 million. And among this amount with our high-end product, 0.23 millimeter below products. So only few companies in the industry can produce these kind of products. So we have a big volume but also great competitiveness. So For these kind of silicon, high-end silicon steel, we also make some optimization portions base operation, they have half a million tons of steel to be made into the new energy vehicle in the future and these are high emission silicon steel. So these are very high-end products. Now they already have margins and in the end of the year they're going to make a big profit. And for the Shenzhen base, it's very similar to Baoshan base. By the end of June this year in Shenzhen base, we started at the beginning of the operation ceremony, so, they're also producing the high emission silicon steel to be used in a high, new energy vehicles. We also have some other future plan based on that. So they are all very high-end products, very good with very good profitability. And therefore for the high-end silicon steel, we need to adjust the structures. Therefore we produce more the high emission steel rather than the small and mid emission steels. So we are gradually implementing these plans and our purpose is to, in the silicon steel field, we will continue to maintain our very good competitiveness.

Wang Juan

感谢[indiscernible]的提问，也感谢董事季鑫的回答。现在我们还有最后15分钟，可以再开放两个问题。请想要提问的投资者继续提问。

Unidentified Analyst

感谢张总和各位领导的分享。我想问一个问题，从刚才领导的分享中我们可以看到，公司在改善产品结构方面非常有决心。所以我想问吴总，根据不同产品的盈利能力，目前贵公司哪些钢铁产品的盈利能力最高？排名是怎样的？

Wu Xiaodi

从大的产品类型来看，硅钢肯定是第一位的，然后是汽车钢、厚板钢和管线钢。这是目前的排名。不过在大类产品中，不同细分类型之间差异很大。比如硅钢，有些类型利润很高，有些甚至亏损。今年年初，一些低排放钢就出现了亏损。汽车钢也是一样，有些产品需求很大，比如电镀钢产品需求旺盛。但如果是那些其他公司也能生产的普通产品，盈利能力就很低。不同产品类型之间的差异很大。但好的一点是，宝钢拥有非常优势和成熟的体系，我们实际上可以估算每个产品的详细盈利能力。有了这些信息，我们能够快速应对市场变化，优化组织结构。由于行业正面临困难，我们始终努力做好成本节约。当然，每个月都可能有一些变化，我们会尽量快速响应。在生产、销售和研发方面，我们可以整合力量来实现目标。

Unidentified Analyst

感谢您的回答。

Wang Juan

我认为这与邹总刚才介绍的表现是一致的，这就是我们的差异化战略。好的，最后一个问题给中金公司的分析师。

Unidentified Analyst

我来自[indiscernible]证券，我叫[indiscernible]。我想问一个类似的问题。我认为今年钢铁公司都在进行转型升级，这与不同公司的能力密切相关。对于贵公司来说，在产品升级方面也取得了一些进展。我想问一下，对于那些利润较好的钢材，比如新能源钢、硅钢、中高端钢材、高强度钢等，贵公司对这些产品未来的规划是什么？谢谢。

Zou Jixin

感谢您的提问，这是一个非常好的问题。正如我们董事长提到的，产品和技术对任何公司来说都是关键。对于我们公司而言，要在行业竞争中保持市场第一的位置，我们确实依赖于产品和技术。关于您提到的所有产品布局，无论我们是否考虑过以及我们给予了何种考虑，是的，当然，我们已经提供了所有这些信息，并进行了相关的布局和优化。这些都是我们一直在思考的事情，也是我们工作的重点。您提到了硅钢，在2020年4月底，我们当时设立了硅钢事业部。那么到2030年，我们应该如何发展，我们在当时的规划中已经非常仔细地考虑过了。因此，对于产量和其他方面，我们都是按照计划发展的。在2019年我们设立硅钢事业部之前，我们的产量不到80万吨。设立事业部后，我们没有投资新的生产线，但通过与其他基地的协调，现在我们已经达到了100万吨。明年将达到116万吨，2026年将达到160万吨。这些都是我们高牌号硅钢，市场急需，同时我们也采用了超高温压力和电气化分布式系统来提高效率。目前，今年高牌号硅钢市场竞争非常激烈。所以我们在这方面做了很多工作。对于新能源来说，如果你的硅钢质量低端，如果是低端硅钢，那就不行。因此今年，新能源，例如风电和储罐等，转换器中使用的钢材需要提高等级。如果我们能做到这一点，可以给我们带来很多利润。对于这些，我们自己也研究了未来是否能更具竞争力。我们的高强度硅钢和高牌号硅钢具有很大的技术特点。要想大规模、经济地生产这种高端硅钢并不容易。你可能生产一些硅钢，但可能不赚钱。所以，其他公司的情况不同，但我们公司不同。有些工程师自豪地说，我们的硅钢水平至少领先竞争对手10年。因此，我们在这方面做了很多工作。例如，我们的高牌号硅钢布局是在2020年设立的。我们也逐步推进产品开发，取得了超出预期的成果。成本竞争力和产品特性都远超我们的预期。因此，我们现在对此非常有信心。谈到汽车行业，我之前也提到过为汽车行业供应的钢材。汽车行业现在正在发生一些变化。总量大约在2000万到3000万吨之间，变化不大，但结构正在改变。美国和日本汽车市场的销量正在下降。对于宝钢来说，我们原有的竞争力在于合资品牌。如果这种销量减少，那么我们如何继续保持汽车用钢的竞争力？因此，我们需要重塑汽车钢板的能力，因为我们已经感受到了这种挑战和潜在风险。因此，我们提出了一些要求，例如以客户为导向、以质量为中心、以市场份额为导向等。我们想要满足合资公司和自主品牌公司的需求。对于这些新品牌公司，我们也努力满足他们的需求。从DDS质量、成本、研发分销服务以及低碳协同DDS等方面，我们努力全方位满足客户需求。我认为这被证明是成功的。今天早上我们召开了汽车板块会议，我们现在对此越来越有信心。今年汽车板块的销量可能会创历史新高。同时，我们也在优化结构。我们想要调整我们的结构。我们有高产量，也有电镀锌钢板。电镀锌的量都应该增加。例如，电镀锌板有很大的量。我们也尝试在一些能为新兴行业提供产品的领域开始运营。这样，我们可以很好地为汽车行业的快速变化做好准备。另一件事是我们有非常稳定的质量，这是我们的优势。此外，我们还有其他品牌。例如，一些二级产品，例如彩色镀层产品。这些也是我们的特色产品。我们想要增加三条生产线，产能约为60万吨。如果是一分钟，这已经是一个很大的产量，因为我们的产品非常有竞争力。刚才您还谈到了无缝钢管。对于这种钢管，我们积累了丰富的经验，也遇到了一些发展瓶颈。当我谈到并购时，我提到了这个话题，但没有深入探讨。但我们将真正发展这种无缝钢管，以满足新能源行业的发展需求。在厚板方面，我们将充分发挥现有生产线的能力。两年前我们设立了厚板事业部，现在可以看到不同部门之间良好的协同效应。对于厚板，我们设立了事业部，想要清楚地了解我们的市场在哪里。我们有国内和国外市场。在中国，我们的生产线和产品类型都排名第一。在海外，我们的产品也有投标。所以你可以看到，在厚板方面，今年表现不错。我们同时专注于多种产品的开发。我们也在研究其他可能的产品类型。我们需要技术和人才来做好这些事情。这些实际上是宝钢的优势。我们有这些优势。我们有非常优秀的研发团队和非常好的技术。因此，我们有信心做任何我们想做的事情。今天午餐时，我们还在讨论汽车板块产品。我们如何为汽车行业布局产品？我们在日常工作中考虑所有这些问题，并且能够迅速实施并取得良好效果。所以我认为，我们公司在未来更具竞争力，市场仍能保持良好的增长势头。这是因为我们有这些产品和技术。

Zou Jixin

Thank you for your question a very good one. So just like our President mentioned, products and technologies are the key for any company. So for our company, in the industry competition for us to maintain the number one position in the market, we really rely on products and technologies. For what you have mentioned, all these products layout, whether we have the consideration or not and what kind of considerations we have given, yes, of course, we have given all these informations and we have made the related layout and optimization. And these are all the things that we have been always thinking about. And this is the key focus of our work. So you mentioned the silicon steel, in the 2020, by the end of April, at that time, we set up the silicon steel business unit. So then by 2030, how should we develop, we already thought very carefully in our planning at that time. Therefore, for the production volume and also for others, we all developed according to the plan. And in 2019, when we set up silicon steel business unit, before that, our production was less than 800,000 tons. And after setting up the BAU, we didn't invest in new production lines, but with coordination with other bases, now we have reached 1 million tons. And then next year, it will be 1.16 million tons and 2026 1.60 million tons. So these are our high emission silicone steel, which are urgently needed by the market and also for the super high temperature pressure and electrified distributed system for raising the efficiency, we're all adopted. And right now, this year there is a very keen competition in terms of high emission silicon steel in the market. So we've been working a lot on it. So for the new energy, if your silicon steel has a low end quality, if it's low end silicon steel then it wouldn't do. Therefore this year, new energy, for example, wind power and affordable tank, et cetera, the steel to be used in a converter need to increase its grading. And if we can do so, it can bring us a lot of profit. And with all this, whether in future we can be more competitive, we have looked into these issues ourselves as well. So for our high strength silicon steel and high emissions silicon steel, they have a very big technological feature. So if you want to mass produce and economically produce this high-end silicon steel, it is not easy. So you may produce some silicon steel, but you may not make money. So, these other situations of other companies but our company, is different. Some engineer have said proudly that our silicon steel level is much leading at least by 10 years in advance compared to our competitors. Therefore, we've done a lot of work about it. For example, our high emission silicon steel layout was set up in 2020. And also we gradually step by step push forward this product development and we have achieved the results beyond our expectation. The cost competitiveness and the features of the products go beyond way beyond our expectation. Therefore, we are now very confident about it. And talking about the automotive industry, I also mentioned before steel supplied for the auto industry. The auto industry now is having some changes. So the total amount is about 20 million, 30 million tons without much changes but the structure is changing. So the American auto and Japanese auto market amount of volume is decreasing. And for Baosteel, our original competitiveness is in the joint venture brands. So if this kind of a volume is reducing, then how can we continue to keep the competitiveness of the auto user steel? So internally we need to reshape the ability of the auto steel plate, because we have already felt this kind of challenges and potential risks. Therefore we propose some requirements, for example, customer oriented and quality focused and also market share oriented, et cetera. So we want to satisfy the needs of a joint venture companies and also for the self-owned brand companies. And for these new brand companies, we also try to satisfy their needs. So from DDS quality, cost, perspective, and R&D distribution service aspects as well as the low carbon in co-DDS, we try to satisfy our customers' needs a full round, in a full round way. So I think that this proved to be successful. So this morning we had the auto sector meeting and we are now more and more confident about it. So this year the auto sector sales can be unprecedentedly high. And also we are optimizing the structure as well. So we want to adjust our structures. We have the high volume and also for the electric platting steel. And the electric platting zinc amount should all be increased. For example, electric plate, zinc plate has a big amount. And also we try to also start operation in some products that can provide for the new emergent industry. So, we can very well prepare for the changes in the auto industry rapidly. Another thing is we have very stable quality, which is our advantage. Also, we have some other brands. For example, some tie two products for example, some colorful plating products. These are our special products too. And we want to add those three more production line with the capacity of about 600,000 tons. So if it's one minute, it's already a very big production, because our products are very competitive. Just now you also talked about a seamless steel pipeline. So for this kind of a steel pipe, we have rich experience accumulated and we've met some development bottleneck as well. When I talked about M&A, I touched upon this topic, but I didn't go too deep in it. But we are going to really develop this kind of seamless steel pipe and to satisfy the development of new energy sectors. And in terms of thick plate, we will fully develop the current production line. We have set up a sick plate business unit two years ago, and now we can see very good integrated effects between different views. So for thick plate, we set up the view and we want to see clearly where is our market. So we have the domestic and foreign market. And also in China, our production lines and our product type, all ranked number one in China. And also overseas we have the bidding of the products. So you can see in terms of a thick plate, it tastes doing well this year. So we are focusing on multiple products development at the same time. And we are studying on other possible types of products as well. So, we need the technologies and the talents to do the things well. And these are actually the BAOS steels advantages. So we have these kind of advantages. We have very excellent R&D team and we have very good technologies. So we are very confident to do whatever we want to do. So during lunch today, we were still having the discussion about the auto sector products. How do we lay out for the products for the auto industry? So we consider all these issues in our daily work and we can rapidly implement all that with good effects. So I think for our company in the future, more competitive and market can still, maintain a good growth momentum. It is because we have these kind of products and technologies.

Wang Juan

所以，感谢[indiscernible]提出的问题，您问了一个非常好的问题。季昕先生非常热情地回答了您的问题。时间过得真快——本次问答环节到此结束，但我们可以继续通过开放的在线提问平台与您沟通，您可以在网站上向我们提问。今天的业绩发布会结束后，您也可以通过投资者热线、上海证券交易所互动平台或深圳平台与我们互动。经过演示和问答环节，我想现在您对宝钢和这个行业有了清晰的认识，我相信尽管环境非常具有挑战性……[通话突然结束]