Core point of view: 1. The current price of zinc in the incident is 16,640 yuan per ton, a sharp increase of 27% from year to date. The average price from year to date is 13,255 yuan, up 2% from the average price for the whole of last year. 2. Our analysis and judgment (1) There are abundant lead and zinc reserves. The company's main mines containing cobalt include Dongshengmiao, Zhongjiashan, and Dawangfu mines. Among them, Dongshengmiao is the core mining right. The Dongshengmiao mine has lead reserves of 245,000 tons and zinc 1,357 million tons, and the company's shareholding ratio is 100%. The company has total reserves of 142 million tons of zinc, 300,000 tons of lead, 45,000 tons of copper, 2.9 tons of gold, and 120 tons of silver. The company has stepped up geological exploration work since 2014, and is expected to add about 900,000 tons of lead and zinc metals (mainly in the Dongshengmiao mine). There is a clear reserve advantage among listed companies with a market capitalization of around 10 billion dollars. The amount of cobalt resources associated with the mine is 17,000 tons. (2) The company, which produces 85,000 tons of zinc, mined 2.17 million tons of lead and zinc ore in 2015, with a processing volume of 2.07 million tons. Lead concentrate produces 15,000 metal tons, zinc concentrate produces 85,000 metal tons, and copper concentrate produces 2,230 metal tons. Sulfuric acid: 320,000 tons; sulfuric acid: 100,000 tons; ferrous iron powder: 90,000 tons. The company's operating income in 2015 was 1.09 billion yuan, including non-ferrous metal mining business revenue of 918 million yuan and zinc concentrate revenue of 646 million yuan; the company's overall business gross profit was 46%, of which 54% of the mining business margin. Considering the decline in zinc processing costs (about 700 yuan from year to date), the price increase of zinc ore is greater than the increase in the price of zinc ingots. (3) The Group invokes investment and opens up capital operation space for listed companies to ease and improve the financial situation of Jianxin Group. Jianxin Group plans to introduce strategic investors to restructure Jianxin Group through equity capital increases or equity transfers. Potential strategic investors: Xinjiang Kaidi Investment Co., Ltd. and China Great Wall Asset Management Co., Ltd. Kaidi Investment is a wholly-owned subsidiary of the Xinjiang State-owned Assets Administration Commission and has rich mining reserves in Xinjiang and abroad. If the cooperation with Jianxin Group succeeds, subsequent capital operations are worth looking forward to. 3. Investment recommendations The price of zinc has risen by 27% year to date. The demand for zinc ore is increasing. It is expected that the increase in zinc prices will continue to be very sustainable. Although zinc prices were sluggish in 2015, it is still possible to obtain 284 million yuan of net profit after deducting non-return net profit. Net profit is expected to improve significantly this year. The mine has increased its reserves by more than 50%. The mine contains cobalt, and there is room for imagination in the operation of capital. Currently, the market value is only 11.8 billion yuan, giving the company a recommended rating. 4. The risk suggests a sharp decline in lead and zinc prices.