2024 results miss our expectation; 1Q25 results in line

Yunnan Tin announced its 2024 results: Revenue fell 0.9% YoY to Rmb42bn, attributable net profit rose 2.5% YoY to Rmb1.44bn and recurring attributable net profit grew 40% YoY to Rmb1.94bn. In 4Q24, the firm’s revenue rose 47% YoY and 22% QoQ to Rmb12.8bn, attributable net profit fell 49% YoY and 67% QoQ to Rmb0.16bn, and recurring attributable net profit grew 25% YoY and 9% QoQ to Rmb0.49bn. The firm’s 2024 results miss our expectation due to payments related to mining rights transfer and asset impairment losses. The firm also announced its 1Q25 results: Revenue rose 16% YoY and fell 24% QoQ to Rmb9.7bn, and attributable net profit grew 53% YoY and 211% QoQ to Rmb0.5bn. The firm’s 1Q25 results are in line with our expectation.

Rising product prices drove up recurring attributable net profit in 2024; payments related to mining rights transfer and asset impairment losses weighed on earnings.

Production volume: Based on the firm’s corporate filings, the firm's production volumes of tin, zinc and copper raw ore metals fell 2%, 7% and 12% YoY in 2024.

Prices: Based on data from iFinD, average domestic prices of tin, zinc and copper metals rose 17%, 8% and 10% YoY in 2024. Based on its corporate filings, the firm’s Rmb514mn payments related to mining rights transfer were included in its costs, and its asset impairment losses and fixed asset disposal losses totaled Rmb0.44bn in 2024.

Rising prices of major mineral products boosted YoY earnings growth in 1Q25. Based on data from iFinD, domestic ASP of tin, zinc and copper metals rose 20%, 14% and 11% YoY in 1Q25. We estimate the firm's gross margin rose 0.3ppt YoY in 1Q25.

Trends to watch

Signing strategic cooperation agreements to further strengthen leading position in tin industry. Based on its corporate filings, since August 2024, the firm has signed strategic cooperation agreements with PT Timah, the Keshiketeng local government, and Inner Mongolia Xingye Silver & Tin Mining to work with partners on resources, businesses, and technologies. Meanwhile, the firm has been a global market leader as measured by tin production and sales volume since 2005, and its domestic market share and global market share for tin metals were 48% and 25% in 2024.

Meeting on production resumption in Myanmar postponed; waiting for improving demand to boost tin prices. Based on data from International Tin Association (ITA), a meeting on the resumption of production at a mine in Myanmar (scheduled for April 1) was postponed to April 23, and ITA expects to take at least two months to fully resume normal mining production in the Wa mining area of Myanmar. Customs data indicates that China's imports of tin ore concentrates from Myanmar fell 87% YoY and 15% MoM in March. We believe the AI boom will boost demand for tin soldering materials, and tariffs may cause global macro policy easing by triggering recession expectations. We suggest waiting for possible demand improvement’s boost to tin prices. Based on the firm’s corporate filings, tin products are the firm’s largest profit contributor and accounted for 43% of its gross profit in 2024. We are upbeat on the firm’s profit growth driven by rising tin prices.

Financials and valuation

We keep our 2025 and 2026 earnings forecasts largely unchanged. The stock is trading at 9.7x 2025e and 9.4x 2026e P/E. We maintain OUTPERFORM rating. As demand concerns caused by tariffs may temporarily weigh on valuation, we cut our TP by 17% to Rmb17.87, implying 12.5x 2025e and 12.1x 2026e P/E and offering 29% upside.

Risks

Disappointing semiconductor demand; higher-than-expected supply in overseas markets; larger-than-expected impact from tariffs.