The company focuses on the two main industries of gold and antimony, and its performance is expected to benefit from the central rise in gold and antimony prices. It covered for the first time, and gave it a “highly recommended” investment rating.

The company focuses on the two main industries of gold and antimony, and has a full industrial chain layout including mining, selection, metallurgy, refining, and deep processing.

The company has a complete industrial chain integrating exploration, mining, beneficiation, smelting, refining, deep processing and sales of gold, antimony, tungsten, etc. The gold business contributed mainly to revenue. 24H1 was 13.89 billion yuan, accounting for 91.8% of revenue. Antimony accounted for 7.5% of revenue during the same period. The profit contribution of gold and antimony was basically the same. 24H1 gold and antimony gross profit accounted for 52.5% and 44.8% respectively.

The company has sufficient gold resources, and the Gansu Jiaxin Project helps grow. By the end of 2023, the company had 141.76 tons of gold resources, which have generally stabilized in recent years. The Wangu Mining Area, which was nurtured by the controlling shareholder, plans to inject it into a listed company in the future. After the project matures, the company will enjoy priority purchasing rights. The overall scale of the company's own gold production remained around 5 tons, with the exception of a decline in the past two years due to the shutdown of the mine. The Gansu Jiaxin Yidinan mining area project has been implemented. The capital construction period is expected to be 2 years, and the procurement design scale is 0.5 million tons/year. An increase in self-production can be expected in the future.

The world's leading antimony, rich in resources. The company's antimony resource reserves exceed 0.3 million tons, and the annual production of antimony products is more than 0.03 million tons. It is one of the world's leaders. Self-produced antimony production is relatively stable. The annual output is about 0.018 million tons, and the antimony self-sufficiency rate is over 50%.

First coverage, giving a “Highly Recommended” investment rating. In 2024-2026, the company's net profit to mother is estimated to be 1.1, 1.5, and 1.8 billion yuan, respectively, and the corresponding PE is 17, 12, and 10 times, respectively.

Risk warning: risk of mine safety accidents, progress of commissioning projects falling short of expectations, falling gold and antimony prices, falling interest rate cuts by the Federal Reserve falling short of expectations, demand for antimony falling short of expectations, supply of antimony ore exceeding expectations, policy risks, etc.