Due to the scarcity of global zinc ore resources and the poor recyclability of zinc metal, tight supply will support zinc prices for a long time. We believe that the situation where companies with zinc resources obtain higher profits will persist for a long time. The biggest advantage of Hongda shares lies in resources. Each share has a zinc and lead resource reserve of 35 kg, which is far greater than Chihong Zinc Germanium (8 kg/share after exclusion) and CICC Lingnan (9 kg/share). The resource advantages of HTC Corporation are rapidly being transformed into strong profitability. The company's “trump card”, Jinding Zinc, is far ahead of any domestic listed zinc company (including Chihong Zinc and Germanium) in operating indicators such as net sales profit rate and net profit per ton in 2006. The amount of static resources of Jinding Zinc allows it to expand its zinc production capacity from the current 140,000 tons to 400,000 tons in the future (30-year mining guarantee) on the premise that the concentrate self-sufficiency rate remains 100%. The domestic phosphorus chemical industry is facing recovery, and the acquisition of phosphate resources is expected to fully activate the company's chemical sector. We are optimistic about the company's efforts in phosphate resources. It is predicted that the company's 2007 and 2008 EPS will be 2.55 yuan/share and 3.34 yuan/share (considering additional dilution in 2008). The valuation is 51.00 yuan/share based on 20 times P/E in 2007, and the corresponding P/E for 2008 is 15.27X. Using resource valuation, the reasonable value of the company is 58.83 yuan/share. Overall, we believe that the company's bottom value line is 51.00 yuan/share, and the reasonable value center is 58.83 yuan/share. Rating “Overweight”.