Key takeaway

1. In 2025, the company achieved a net profit attributable to shareholders of the parent company of RMB1.97bn, +36.1% YoY; the company expects to achieve a net profit attributable to shareholders of the parent company of RMB820mn to RMB920mn in 1Q26, an increase of 64.18% to 84.20% YoY.

2. Stable volume and rising prices coupled with a decrease in period expenses led to a significant increase in the company's net profit attributable to shareholders of the parent company in 2025. Benefiting from the sharp rise in tin prices, the company's net profit in 1Q26 increased significantly YoY.

3. Supply and demand resonate, and the tin price center continues to rise. On the supply side, continuous disturbances in Myanmar, the Democratic Republic of the Congo and Indonesia highlight the vulnerability of tin supply. On the demand side, the global semiconductor market recovers well, and semiconductors in fields such as artificial intelligence and electric vehicles have huge growth potential. Under the resonance of supply and demand, the tin price center is expected to continue to shift upward, and the company is expected to fully benefit.

Event

The company releases the 1Q26 performance forecast The company expects to achieve a net profit attributable to shareholders of the parent company of RMB820mn to RMB920mn in 1Q26, an increase of 64.18% to 84.20% YoY.

The company releases the 2025 annual report

In 2025, the company achieved a total operating revenue of RMB43.53bn, +3.7% YoY; it achieved a net profit attributable to shareholders of the parent company of RMB1.97bn, +36.1% YoY. Among them, it achieved a net profit attributable to shareholders of the parent company of RMB220mn in 4Q25, +37.3% YoY. It plans to distribute a cash dividend of RMB2.5 (including tax) for every 10 shares to all shareholders.

Brief analysis

1. Stable volume and rising prices coupled with a decrease in period expenses led to a significant increase in the company's net profit attributable to shareholders of the parent company in 2025

Volume: In 2025, the company's tin product output was 91,200 tons, copper product output was 130,100 tons, zinc product output was 133,400 tons, indium product output was 119 tons, and gold output was 1.26 tons.

Price: In 2025, the average domestic spot price of tin was RMB274,000/ton, an increase of 10% YoY compared to the average price in 2024;

Period expenses: In 2025, the company's administrative expense and financial expense decreased by 2% and 29% YoY respectively, and the selling expense increased by 5% YoY.

2. The tin price in 1Q26 increased by 49% YoY and 28% QoQ, driving a significant increase in the company's first-quarter performance

The average spot price of tin in 1Q26 was RMB387,500/ton, an increase of 49% YoY and 28% QoQ. The company actively seized market opportunities and enhanced the synergistic efficiency of mining, processing and smelting. The output of non-ferrous metal products increased YoY, driving the growth of operating performance in the first quarter compared to the same period last year.

3. The global tin resource depletion problem is prominent

According to the company announcement, the company's tin ore metal production from 2020 to 2025 was 43,200 tons, 35,000 tons, 34,400 tons, 32,000 tons, 31,200 tons, and 31,800 tons respectively. The company's overall tin ore production shows a downward trend. The company's added reserves after tin resource exploration from 2020 to 2025 were 21,000 tons, 34,400 tons, 18,000 tons, 14,000 tons, 17,600 tons, and 13,500 tons respectively. The increment on the reserve side is difficult to make up for the production consumption. Due to perennial over-mining, the grade of major global tin mines has declined. The problem of resource depletion is prominent, and the supply situation is not optimistic.

In the future, the company will continue to increase the efforts of "internal growth and external expansion" of resources. It will further strengthen the resource exploration of the Kafang mining area. It will improve the company's future reserve increase and development and utilization level of tungsten and tin related resources. It will increase the comprehensive utilization level of tailings resources, and continuously improve the company's resource guarantee ability and sustainable development level.

4. Supply and demand resonate, and the tin price center continues to rise

On the supply side, the Wa State region of Myanmar has completely suspended production for more than 2 years since August 1, 2023 (previously Myanmar accounted for about 14% of global tin ore production, and Wa State accounted for about 90% of Myanmar's tin ore production). The recent resumption of work and production is still not very smooth due to the limited supply of explosives. Indonesian President Prabowo Subianto stated on September 29, 2025, that he had ordered the closure of 1,000 illegal tin mines in Bangka Belitung province on Sumatra island and completely blocked smuggling channels. This highlights resource protectionism and the vulnerability of the tin supply system. Superimposed on the relatively low inventory of the domestic tin industry chain at present (low hidden inventory at the mining end, and social inventory of tin ingots has also continued to destock recently), it makes the price more upwardly elastic.

On the demand side, nearly 50% of global tin is used as solder (mainly for electronic and industrial purposes). SIA data shows that the global semiconductor market presents a good recovery trend. In addition to the cyclical recovery in traditional fields, the semiconductor growth potential in fields such as artificial intelligence and electric vehicles is huge. The booming development of digital economy within China's new quality productive forces, alongside national policy incentives for electronic product consumption, positions tin as a foundational material set to gain sustained benefits.

Investment advice:It is estimated that the company's net profit attributable to shareholders of the parent company from 2026 to 2028 will be RMB3.25bn, RMB3.71bn, and RMB4.01bn respectively. The PE corresponding to the current stock price is 16.5, 14.5, and 13.4 times respectively. Considering the company's industry status, growth, and low-cost advantages, we assign a 'Buy' rating.

Risks

(1) Tin price fluctuations. Tin business is the main source of gross profit for the company, and tin prices are affected by factors such as supply and demand and the economic environment, and are also closely related to the development of semiconductors and photovoltaics. Fluctuations in tin prices will have a certain impact on the company's cost control and profitability. According to our calculation, if the tin price falls by 5% compared to our assumed value, the net profit attributable to shareholders of the parent company will decrease by 10% compared to our forecast.

(2) Raw material price increases. If raw material and labor costs rise, it will have a negative impact on the company's profitability.

(3) Tightening of environmental protection policies. If environmental protection policies related to mineral development tighten, it may affect the production of the company's metal products.

(4) Downstream consumption not meeting expectations. If the demand for the company's main products in the downstream market does not meet expectations, it will have a negative impact on the company's product sales.