Although A/H shares have entered a period of adjustment one after another, resource stocks related to nonferrous metals have frequently shown independent market trends. In the second quarter alone, the price of metal futures such as gold and silver rose by up to 45% and 20%, respectively, driving many concept stocks to rise by over 30%. As a high-quality silver stock, Silvercorp Metals Inc. (SVM.US) has also been favored by capital, with a year-to-date increase of nearly 43%.

On July 15th Vancouver time, Hilwa released its Q1 2025 financial report: The company's operating revenue in the period was approximately USD 72 million, an increase of 20% year-on-year, reaching a historic high; the mining volume was approximately 0.3419 million tonnes, an increase of 13% year-on-year.

Performance is the best booster for stock price. Hilway's good Q1 performance was released, and investors voted with their feet. After the results were announced, the stock rose by more than 4% at one point during the trading day. At the close of the market, the increase was as high as 3.74%, at USD 3.88, with a trading volume of 1.38 million shares and a total market value of USD 0.689 billion.

Silver is the company's main metal product. During the reporting period, Silvercorp's performance was further enhanced due to the increase in silver prices.

In terms of quantity, the company produced approximately 1.717 million ounces of silver and sold approximately 1.739 million ounces. The silver equivalent (silver and gold only) production was approximately 1.802 million ounces; lead production was approximately 15.619 million pounds and sales were approximately 15.663 million pounds; zinc production was approximately 6.4 million pounds and sales were approximately 6.484 million pounds; gold production was approximately 1,146 ounces, and sales were 998 ounces.

In terms of sales prices, metal prices in the futures market surged in the first half of the year, especially the price of silver, which reached a new high in 11 years, with an astonishing increase during the year. In the first half of 2024, the average price of silver on the SHFE was CNY 6,798.75 per kilogram, a YoY increase of 27.85%; the average price of gold on the SHFE was CNY 523.07 per gram, a YoY increase of 20.44%.

In short, the continuous rise in silver and gold prices is driving the company's performance up. From a longer-term perspective, as a high-quality target of silver, Hilway will fully benefit from the upward movement of silver β.

It is well known that under the resonance of turbulent international situation and the resistance to inflation of tangible assets, silver, following the trend of gold, has become one of the investment channels for hedging funds. David Morgan, the founder and author of Morgan Report, once mentioned that the supply of silver will be exhausted in the next ten years, and industrial demand will "absorb all available silver", causing silver prices to rise, making silver the best investment in decades.

Recently, well-known Wall Street investors such as Peter Schiff have expressed their views that the current silver price is severely undervalued and predicted that the silver price will soon experience an "explosive" rise. This viewpoint has attracted widespread attention in the market, and investors have started to re-examine the investment value of silver.

On the demand side, as an excellent conductor, silver is a bulk commodity highly related to the manufacturing industry, and many industries such as photovoltaics, artificial intelligence, new energy, etc. are driving the industrial demand for silver. Last year, industrial demand achieved a growth rate of 11%, marking the fourth consecutive year of structural market shortages for silver. The growth rate is expected to be maintained at 9% this year, further pushing up the silver price.

On the supply side, the World Silver Survey 2024 released by the Silver Institute predicts that global silver supply will decrease by about 0.68% this year, and silver reserves will continue to decline, reaching only 70% of the inventory peak in 2021, and the overall supply-demand gap will expand by 17%. It is expected to maintain a supply shortage situation for four consecutive years, with a total shortage of 215.30 million ounces (6,697 tons).

The change in the supply-demand situation is expected to bring greater gains to silver. With the development of the silver β trend, targets with outstanding resource advantages will fully benefit.

Focusing on Hilway, its outstanding resource endowment advantages are evident, and once the new production scale increment is released, its performance is expected to rise to a new level.

Specifically, as of the first quarter of fiscal year 2025, the silver grade of Hilwa's main mining area was about 235 grams/tonne, and the lead grade was about 3.1%. In addition, due to the production cycle, the sales of the current products are mainly concentrated in the second half of the year. The company expects that once the daily output of the second-stage plant is increased by 1,500 tons in the third quarter of fiscal year 2025, the inventory ore will be processed in the third and fourth quarters. Once the mining output is concentrated and released, the resource endowment advantages will continue to be realized.

Overall, for investors, actively paying attention to the dynamics of the silver market and arranging at the right time in the current market environment is a more stable choice. Hilway is based on its resource endowment advantages, and orderly advancing its production capacity release, with its growth particularly promising, its investment value is expected to be further highlighted.