Profit from the price increase was realized as scheduled, and asset scrapping reduced medium- to long-term cost pressure 2024H1 achieved operating income of 18.78 billion yuan, -17.8% year over year, mainly due to the year-on-year decline in supply chain business scale and the deep-processing sector, achieving net profit of 0.8 billion yuan, +16.35% year over year, net profit after deducting non-return to mother of 0.998 billion yuan, +68% year over year, mainly due to a sharp increase in non-operating expenses of 0.247 billion yuan year on year, mainly due to the significant increase in non-operating expenses of 0.247 billion yuan year on year. Disposal to reduce medium- to long-term cost pressure. Considering the impact of asset scrapping on non-operating expenses, we lowered our performance forecast. From 2024 to 2026, the company is expected to achieve net profit of 2.062, 2.364, and 2.614 billion yuan (previously estimated to be 2.211, 2.546, and 2.936 billion yuan, respectively), with year-on-year changes of +46.4%, +14.7%, and +10.6%, respectively. EPS was 1.25, 1.44, and 1.59 yuan/share, respectively. The corresponding closing price PE on August 23, 2024 was 11.2, 9.7, and 8.8 times, maintaining a “buy” rating considering the full release of the company's operating profits.

Overcoming the impact of the Spring Festival in the first half of the year, the main varieties all exceeded the 2024 production target implementation schedule. 2024H1 produced 0.0452 million tons of tin, +6.6% year over year, achieved 53% of the 2024 production target, produced 0.0703 million tons of copper, +7.99% year over year, achieved 54% of the 2024 production target, produced 0.0688 million tons of zinc, +4.56% year over year, achieved 52% of the 2024 production target, produced 65 tons of indium year over year + 42.42%, achieving 84% of the 2024 production target, in addition to 621 kg of gold and 82 tons of silver.

The plan is to begin maintenance, which will not affect the company's own tin production

The company will carry out routine shutdown and maintenance of tin smelting equipment in line with actual practice. The current shutdown and maintenance plan will begin on August 25, 2024, and the shutdown and maintenance period is expected to be no more than 45 days. This shutdown and maintenance did not affect the company's own tin production, and at the same time had no significant impact on the company's annual production plan.

A strategic cooperation framework agreement was signed with PT Timah of Indonesia to promote the development of the two sides. Since the company and PT Timah of Indonesia, as the world's leading tin production and processing enterprise, have broad scope for cooperation in resource development, extraction and metallurgy technology, international trade, information interaction and exchange, and downstream product development, the two sides signed a “Strategic Cooperation Framework Agreement” to promote common development.

Risk warning: Myanmar's progress in resuming production exceeded expectations, semiconductor demand recovery fell short of expectations, tin prices fluctuated sharply, etc.