Eastern Tantalum: Continuous Optimization of Product Structure and Capacity Release from Fundraising Projects, 2024 Net Profit up 13.94% YoY

The 2024 performance express report released by Orient Tantalum on the evening of March 21 shows: In 2024, the company is expected to achieve operating revenue of 1.28 billion yuan, an increase of 172.55 million yuan, up 15.57% YoY; it is expected to achieve operating costs of 1.04 billion yuan, an increase of 130.15 million yuan, up 14.30% YoY. The net profit attributable to the parent company's owners is expected to be 213.22 million yuan, an increase of 26.09 million yuan, up 13.94% YoY; the net profit attributable to the parent company's owners after deducting non-recurring gains and losses is expected to be 192.79 million yuan, an increase of 34.67 million yuan, up 21.92% YoY.

Regarding the main factors affecting performance, Orient Tantalum stated: In 2024, in the face of a complex and changing external environment and arduous development tasks, the company actively expanded market space, continuously consolidated the "dual circulation" market pattern; actively adjusted the product structure, increased the sales share of high-value-added products, continuously optimized the product structure, and released the capacity of fundraising projects, leading to a YoY increase in operating revenue and steady growth in operating profits, with the quality of the company's operations continuously improving.

Orient Tantalum's investor relations activity record announced on March 12 shows:

What is the company's outlook for the future market?

Orient Tantalum responded: In terms of tantalum capacitors. The traditional fields, such as the automotive electronics industry, industrial, and consumer applications, with the continuous improvement of electrification, cannot ignore the driving effect on tantalum capacitors; in emerging application areas, with the gradual improvement of China's electronic industry chain and the development of high-frequency communication technology in the civilian market, market demand is expected to grow.

In terms of superalloys. Gas turbines and aero engines are the primary application areas for superalloys, both belonging to high-end core equipment. With the maturation of China's technology, domestic substitution will promote the rapid growth of tantalum and niobium products in the domestic superalloy field.

In terms of sputtering targets. The expansion of the semiconductor and consumer electronics market size provides broad development space for the sputtering target market. Tantalum and niobium targets, as important components of semiconductor sputtering targets and flat panel display targets, will see rapid development against the backdrop of industry growth and domestic substitution.

In terms of chemical corrosion resistance. Due to their excellent metallic properties, tantalum and niobium sheet and strip products are the preferred choice for high-end corrosion-resistant equipment in the environmental protection sector, gradually moving towards large-scale applications in aerospace, marine engineering, chemical and pharmaceutical, and biomedical fields.

In terms of niobium superconducting cavities. The issuer's superconducting material products and niobium superconducting cavities, as core components of particle accelerators, are widely used in large scientific facilities such as synchrotron radiation sources, free electron lasers, and spallation neutron sources. With the construction of major international and domestic scientific facilities, the demand for superconducting material products and niobium superconducting cavities is showing a rapid growth trend.

In summary, under the combined influence of policies, markets, and other factors, the company believes that the downstream product market has broad prospects for development.

Compared to peers, what competitive advantages does the company have?

Orient Tantalum responded: The company has a complete industry chain integrating hydrometallurgy of tantalum and niobium ores, pyrometallurgy of tantalum and niobium metals, and processing of tantalum and niobium products. Focusing on the R&D and production of special tantalum and niobium metal materials, the company continuously achieves the transformation of high-tech products such as high-voltage, high-capacity tantalum powder for capacitors, high-purity niobium materials and superconducting cavities for RF superconductivity, and high-temperature oxidation-resistant alloys and coatings for aerospace.

After nearly six decades of development and accumulation, the company has established stable cooperative relationships with many enterprises. It has a good reputation, stable supply, sales channels, and a sales service system, giving it a significant brand advantage in the industry.

The company has long adhered to placing technological progress at the forefront, combining production and research, establishing and improving talent development channels, providing a development platform for scientific and technical personnel, and possessing a research team with rich practical experience, capable of independent research, development, and design.

Orient Tantalum's investor relations activity record announced on March 11 shows:

1. What impact do the development of new industries such as artificial intelligence (AI) have on the company?

Orient Tantalum responded: The company always closely monitors national policy orientations and market development trends, adhering to R&D and innovation. Through continuous R&D investment and technological upgrades, it continuously enhances its core competitiveness. In recent years, with the expansion of the semiconductor and consumer electronics market, the sputtering target market has been provided with broad development space. Tantalum and niobium targets, as important components of semiconductor sputtering targets and flat panel display targets, will see rapid development against the backdrop of industry growth and domestic substitution. In traditional fields, with the continuous improvement of electrification in the automotive electronics industry, industrial, and consumer applications, the driving effect on tantalum capacitors cannot be ignored; in emerging application areas, with the gradual improvement of China's electronic industry chain and the development of high-frequency communication technology in the civilian market, market demand is expected to grow.

2. What semiconductor products does the company produce?

Orient Tantalum responded: The company's large-size, high-purity tantalum sputtering target blanks are mainly used in the semiconductor chip manufacturing, semiconductor coating, and optical coating industries. In recent years, with the expansion of the semiconductor and consumer electronics market, the sputtering target market has been provided with broad development space. Tantalum and niobium targets, as important components of semiconductor sputtering targets and flat panel display targets, will see rapid development against the backdrop of industry growth and domestic substitution. The company's semiconductor-grade tantalum sputtering target blanks, which are key products in recent years, are being enhanced in competitiveness through improved internal management, strengthened R&D capabilities, increased production, and improved product quality, continuously increasing market share.

3. What layout and technological reserves does the company have in the semiconductor field?

Orient Tantalum responded: In high-end chips, the company's high-purity metallurgical-grade tantalum powder and tantalum sputtering targets are key raw materials in the semiconductor manufacturing process. The sales of ultra-high-purity metallurgical-grade tantalum powder for semiconductor sputtering targets have seen "leapfrog" growth, filling the gap in this area in China and changing the situation where China's integrated circuit materials were entirely dependent on imports. The company is fully advancing the R&D and certification evaluation work for 12-inch tantalum sputtering target blanks, having completed test sample evaluations and achieved bulk sales, creating a new economic growth point. Through the implementation of key investment projects such as pyrometallurgy and product projects, the company will address issues such as aging production equipment, logistics bottlenecks, and insufficient capacity in semiconductor-related product lines, while increasing the supply of semiconductor and other products, optimizing the company's product structure.

4. How will the company carry out market capitalization management?

Orient Tantalum responded: The company will continue to strengthen its core business, focus on industrial upgrading and technological innovation, and actively achieve high-quality development through the capital market. The company firmly believes that high-quality development is the foundation of market capitalization management. While focusing on the development of the core business and continuously enhancing the company's intrinsic value, it will comprehensively improve its market capitalization management capabilities. The company will enhance transparency through multiple channels such as information disclosure, surveys, earnings briefings, the Shenzhen Stock Exchange Interactive Easy Platform, and investor hotlines, fully protecting investors' rights and interests, building a multi-level interactive mechanism, allowing the market to fully understand the company's production and operations, and recognizing its development potential and intrinsic value. This will enhance the company's positive image in the capital market, thereby promoting the long-term and stable development of the listed company.

5. As a company with both ends outside, will exchange rate fluctuations have a significant impact on the company?

Orient Tantalum responded: Some of the company's product sales and raw material purchases are settled in foreign currencies. The company actively monitors changes in the international market exchange rates and has established a complete foreign exchange risk warning and monitoring mechanism, closely following the impact of international situations and monetary policy changes on exchange rates, reducing the risks brought about by exchange rate fluctuations.

6. What are the downstream applications of the company's superconducting niobium?

Orient Tantalum responded: Niobium, due to its high critical temperature, is the preferred element in the low-temperature superconductivity field. Niobium RF superconducting cavities are key components in the new generation of particle accelerators. Particle accelerators using niobium superconducting cavities have the characteristics of stable operation, high average current, high acceleration gradient, low loss, and low operating costs. They are mainly applied in national large-scale scientific facilities such as high-energy synchrotron light sources (HEPS), accelerator-driven transmutation research facilities (CiADS), hard X-ray free electron laser devices (SHINE), and high-intensity heavy ion accelerator facilities (HIAF), which are key industries supported by the state. The R&D, production, and export of superconducting niobium materials and RF superconducting niobium cavities for accelerators by Orient Tantalum have filled the gap in this field in China, making China one of the countries capable of independently producing superconducting niobium materials and various types of RF superconducting niobium cavities. Winning the bid for the European Free Electron Laser project, the company has contributed to the development of international colliders and other large-scale scientific projects.

In its 2024 semi-annual report, Orient Tantalum introduced: The company is mainly engaged in the R&D, production, sales, and import and export of rare metals such as tantalum, niobium, and their alloys. It has formed a series of products including tantalum metal and alloy products, niobium metal and alloy products. These products are widely used in electronics, communications, aviation, aerospace, metallurgy, petroleum, chemicals, lighting, atomic energy, and solar energy fields.

Tantalum ore prices exhibit strong cyclical patterns, influenced by a variety of factors. At the beginning of 2024, the escalation of conflicts between the "M23" armed group and the DRC army in North Kivu Province, a major supplier of tantalum raw materials, led to an increase in tantalum ore prices.

》Click to view SMM metal tantalum spot price

》Click to view SMM metal spot historical price trend

This can also be seen from the average price trend of SMM tantalum pentoxide (Ta2O5 ≥ 99.95%): The average price of SMM tantalum pentoxide (Ta2O5 ≥ 99.95%) on December 29, 2023, was 1,900 yuan/kg. Affected by the rise in raw material prices, the average price rose to 2,000 yuan/kg in early March 2024. This price level was maintained for more than two months in 2024 before pulling back, with the average price on December 31, 2024, being 1,850 yuan/kg, a decrease of 50 yuan/kg, down 2.63%. Entering 2025, the conflict between the M23 armed group and the DRC escalated again, and the obstruction of tantalum ore supply led to an increase in tantalum ore prices. The average price of SMM tantalum pentoxide (Ta2O5 ≥ 99.95%) also rose in early March, with the average price on March 21, 2025, being 1,950 yuan/kg, an increase of 100 yuan/kg, up 5.41% compared to December 31, 2024..

Since M23 controls the Rubaya mining area and the border region between North Kivu and South Kivu (the border region between North Kivu and South Kivu is a coltan-rich area), with the Rubaya tantalum mine being one of the largest in the DRC, accounting for 15-20% of global coltan production. Due to the inability to export overseas tantalum mines, the current price of overseas tantalum ore remains higher than that of domestic tantalum ore. Considering the existing price difference between domestic and overseas tantalum ore, to narrow the price gap, it is expected that the price of domestic tantalum ore will continue to rise in the short term. Future attention should be paid to when the conflict in the DRC will ease and when the supply of tantalum ore will return to normal.