The company's revenue for the first three quarters of 2024 was +35.96% YoY, and net profit to mother +139.40% YoY. In Q1-Q3 2024, the company achieved revenue of 3.296 billion yuan, +35.96% year on year; net profit to mother 1.3 billion yuan, +139.40% year over year; net profit after deducting non-attributable net profit of 1.305 billion yuan, +130.96% year over year. Looking at the third quarter of a single quarter, the company achieved revenue of 1.098 billion yuan, -6.83% YoY, -23.42%; net profit to mother 0.416 billion yuan, +1.47% YoY, and -36.33% month-on-month; net profit without return to mother 0.41 billion yuan, +0.63% YoY and -38.50% month-on-month. The company's profit increased significantly year-on-year in the first three quarters, mainly due to the fact that the results of the first phase of Yinman's technical reform began to be reflected in the third quarter of 2023. After the technical reform was completed, production increased markedly. In addition, the prices of the company's core products, tin concentrate and silver powder, also increased. The company's profit declined month-on-month in the third quarter, mainly due to the promotion of the second phase of Yinman affecting the production volume of the first phase to a certain extent, and commodity prices also declined slightly month-on-month in the third quarter.

The Buttonsilver mining license was successfully obtained. Budunyingan is a holding subsidiary of Societe Generale Gold Smelting Group. According to public information on the official website of China's Ministry of Natural Resources, Butunyingen obtained mining rights in September 2024. The main mining type is silver ore. The mining method is underground mining. The design and production scale is 0.675 million tons/year, and the area is 5.21 square kilometers. The validity period is from September 2024 to September 2032. After obtaining a mining license, it is possible to inject Butun silver root into the listed company.

Acquired a 20% stake in FEG, an Australian listed company. On September 4, 2024, the company signed an “Equity Subscription Agreement” with FEG, a wholly-owned subsidiary of Societe Generale Gold (Hong Kong). Societe Generale Gold (Hong Kong) subscribed to FEG's targeted additional common shares on the Australian Stock Exchange (ASX) to Societe Generale Gold (Hong Kong) at a price of 0.2 Australian dollars per share. The total number of subscribed shares accounted for 19.99% of its issued shares on the day the subscription was completed, with a total transaction amount of about 14.2473 million Australian dollars, a discount of approximately RMB 66.5679 million. FEG is an exploration company. It has three mining projects in Indonesia's Sunda magmatic arc, and three mining projects in the Drummond Basin and Connors Arc regions in central Queensland, Australia. Currently, they are all in the exploration stage. The mineral resources of these projects are mainly copper and gold deposits. This acquisition is an important step for the company to achieve its strategic goal of “facing the world and expanding the industry”.

Risk warning: the risk that the company's resource development progress will not meet expectations; the risk of large fluctuations in metal prices.

Investment advice: Lower profit forecasts and maintain the “better than the market” rating. Based on judging the company's production and commodity prices, we expect the company's 2024-2026 revenue to be 5.207/6.103/6.39 billion yuan, a year-on-year growth rate of 40.50%/17.21%/4.70%; net profit to mother of 1.668/2.035/2.169 billion yuan, a year-on-year growth rate of 72.05%/22.01%/6.60%; diluted EPS is 0.91/1.11/1.18 yuan. The current stock price corresponds to PE of 14.9/12.2/ 11.5x Considering the resource-rich location advantage of the Inner Mongolia region, the company actively reserves high-quality mineral resources through epitaxial mergers and acquisitions while maintaining the “superior to the big market” rating while taking into account endogenous development.