Key points of investment

Incidents. The company released its 2024 mid-year report. From January to June 2024, the company achieved operating income of 18.775 billion yuan, a year-on-year decrease of 17.77%; realized net profit of 0.8 billion yuan, an increase of 16.35% over the previous year; and realized net profit of 0.998 billion yuan after deduction, an increase of 67.95% over the previous year.

The sharp rise in the volume and price of tin products led to an increase in the company's performance. In terms of tin prices, tin futures prices fluctuated strongly in the first half of 2024. The main contract operating range for Shanghai and tin was 206,629-292,485 yuan/ton. As of June 30, it had risen 27.16%, with an average price of 251,208 yuan/ton, up 21.19% year on year, with a range fluctuation of 39.84%. The price range for Renxi was 24,115-32,905 US dollars/ton. As of June 30, the average price was 29,324 US dollars/ton, up 12.56% year-on-year, and the range fluctuation was 49.96%. In terms of production, in the first half of 2024, the company produced a total of 0.1852 million tons of non-ferrous metals, including 0.0452 million tons of tin (up 6.6% year on year), 0.0703 million tons of copper (up 7.99% year on year), 0.0688 million tons of zinc (up 4.56% year on year), 65 tons of indium (up 42.42% year on year), 621 kg of gold, and 82 tons of silver.

The tin supply is still disrupted, and the price of tin rises easily and is difficult to fall. On the Myanmar side, China mainly imports tin concentrate from Myanmar. As of July 2024, China imported 6,838.44 tons of tin concentrate from Myanmar in the same month, down 74.1% year on year; from January to July, China imported 61,738.13 tons of tin concentrate from Myanmar, a year-on-year decrease of 45.0%; in January-July, China imported 106,956.17 tons of tin concentrate, a year-on-year decrease of 26.2%. On the Indonesian side, China mainly imports tin concentrate from Indonesia. As of July 2024, China imported 945.15 tons of refined tin from Indonesia in that month, a year-on-year decrease of 38.5%; in January-July, China imported 3,498.20 tons of refined tin, a year-on-year decrease of 68.7%; in January-July, China imported a total of 10,218.63 tons of refined tin, a year-on-year decrease of 33.0%.

The leader in the tin industry is expected to benefit from the boom in the industry. Since 2005, the company has consistently ranked first in the world in tin production and sales, and has the largest share of the global tin market. According to the company's own production and sales volume and relevant data published by industry associations, the company's domestic market share of tin metals in 2023 was 47.92%, up 0.14 percentage points from 2022, and the global market share was 22.92%, up 0.38 percentage points from 2022. According to the International Tin Industry Association, the company ranked first among the top ten fine tin producers in 2023. The company has a leading position in the production of tin products. Currently, the supply of tin metal is limited, and the company is expected to continue to benefit.

Investment advice. Tin prices rose significantly in the first half of the year. As supply continues to be tight, tin prices are expected to remain strong. Maintain the company's 2024-2026 net profit forecast of 1.9, 2.3, and 2.5 billion yuan. Maintain a “buy” rating.

Risk warning: Product production falls short of expectations, product prices fluctuate greatly, and overseas policies change drastically.