When facing thousands of listed company announcements every day, which ones should you read? What are the key points to take away from the dozens or hundreds of pages of material announcements? Are the many professional terms in the announcements bullish or bearish? Check out Caixin's "Quick Read Announcement" column, where our reporters across the country will provide you with accurate, fast and professional interpretations on the night of the announcement.

On August 5th, Cailian Press (reporter Liang Xiangcai) reported that Chongyi Zhangyuan Tungsten's net income in H1 increased by nearly 30% YoY due to the strong tungsten price in the first half of the year. A staff member of Chongyi Zhangyuan Tungsten told Cailian Press, who consulted as an investor, that the rapid fluctuation of tungsten upstream raw material prices has a certain lag in transmission to downstream, and the rise in tungsten prices in this round is mainly driven by the tightening of supply at the mining end. From the perspective of overall downstream demand, it did not follow the high prosperity of the tungsten price.

Chongyi Zhangyuan Tungsten (002378.SZ) released the performance report for the first half of 2024 tonight, achieving a total operating income of 1.814 billion yuan in H1, a YoY increase of 5.23%; the net profit attributable to the parent company in the same period was 0.112 billion yuan, a YoY increase of 29.38%.

Regarding the reason for the performance growth, Chongyi Zhangyuan Tungsten stated in the announcement that it was mainly due to the increase in sales volume of terminal hard alloy products, the rise in product prices, the YoY increase in gross margin rate, and the company being recognized as an advanced manufacturing enterprise enjoying a 5% additional input VAT deduction, which jointly affected the operating performance.

Since the beginning of this year, the tungsten price has risen and fallen sharply. According to Choice data, as of late May, the average price of black tungsten concentrate (grade ≥65%) had risen to 0.158 million yuan/ton, a nearly 30% increase from the beginning of the year and a new high in nearly ten years. The price then turned downward and has since rebounded after falling to the range of 0.13 million yuan/ton.

Regarding the future tungsten price, the aforementioned staff member of the company stated that tungsten is a scarce strategic resource, and the country implements quota production management. In the long run, raw material tungsten concentrate should still remain relatively scarce. From the current price after the tungsten price fell, it is still bullish about the subsequent trend.

Yao Yifan, a tungsten and molybdenum analyst at SMM, told Cailian Press that in the short term, under the support of upstream raw material holders cautiously releasing supply and confidence in maintaining prices, there is a higher possibility for domestic tungsten prices to continue to rise after the top reversal. At the same time, we should also be careful about the possibility of severe price fluctuations caused by insufficient follow-up demand.

The announcement showed that as of the end of 2023, Chongyi Zhangyuan Tungsten had tungsten resource reserves of 0.0946 million tons, and its self-sufficiency rate of tungsten raw materials was around 20%; the company has a production system of upstream exploration, mining, and beneficiation, midstream smelting and powder making, and downstream precision processing.