Incident: On July 27, the company issued an announcement stating that Chuanfa Securities Fund, as manager, Chuanfa Sichuan Local Value Discovery Private Equity Securities Investment Fund and its co-actor, the Sichuan Capital Market Relief and Development Securities Investment Fund, recently held a total of 5% of the company's total share capital through continuous increases in holdings. This increase in holdings is based on full recognition of the company's future development prospects and current investment value. In the future, the two sides will carry out investment cooperation in the fields of share growth, capital empowerment, and industrial empowerment to jointly promote the company's high-quality development.

Join hands with the Chuanfa Securities Fund to promote high-quality development through industrial and financial cooperation. On July 26, the company and Chuanfa Securities Fund held an investment cooperation signing ceremony. In the future, the two sides will carry out investment cooperation in the fields of share growth, capital empowerment, and industrial empowerment. Chuanfa Securities Fund is a wholly-owned specialized securities investment fund manager under Sichuan Development (Holdings) Company. In recent years, it has invested around major national and provincial strategies, and has invested nearly 10 billion yuan to provide financial support and industrial empowerment for the reform and development of many Sichuan listed companies. It is the state-owned private equity investment fund management company with the largest managed assets in Sichuan.

State-owned funds are licensed to fully recognize the company's investment value. On July 17, Chuanfa Local Value Fund increased its holdings of the company's 3.199 million shares through bulk transactions, accounting for 1.9445% of the total share capital; on the same day, it increased its holdings of 3.2 million shares through negotiations to trade convertible bonds and share conversion, accounting for 1.9457% of the total share capital. Furthermore, from July 17 to July 26, Chuanfa Local Value Fund increased its holdings of the company's shares by 1.4824 million through centralized bidding, accounting for 0.9011% of the company's total share capital. In addition to the 0.3435 million shares of the company previously held by the Relief and Development Fund, the two funds together held 5% of the company's shares, completing the first listing. This time, the state-owned fund was quickly listed within 10 days, and the company's investment value was fully recognized.

Overseas markets are expanding smoothly, and on-hand orders have repeatedly reached new highs. Since 2023, the company has followed the simultaneous advance of going overseas and has established an overseas business headquarters in Singapore, focusing on developing markets in countries and regions such as Africa, Southeast Asia, South America, Australia, the Middle East, and India. Using the cooperation of the Simandou iron ore project, the Western Cement Ethiopia project, China Steel Brazil Company, and Indonesia's Sanlin Company as an opportunity to further develop 40 of the world's largest mining customers. In 2023, the company successfully won the bid for Baowu Group's Ximangdu iron ore project with a bid amount of 1.28 billion yuan; in June 2024, it won the bid for the Western Cement Uganda project, which is expected to achieve revenue of 0.11 billion yuan, and the pace of overseas expansion is smooth. By the end of the first quarter of 2024, the company had on-hand orders of 2.4 billion yuan, accounting for nearly 70% of overseas orders. Sufficient orders will protect the company's future performance.

Profit forecasting and investment advice. The company's net profit for 2024-2026 is expected to be 0.176, 0.283, and 0.376 billion yuan respectively. The compound net profit growth rate for the next three years will be 54.3%, maintaining a “holding” rating.

Risk warning: risk of raw material price fluctuations; overseas market expansion or falling short of expectations; risk of exchange rate changes.