Punai Co., Ltd.: The magnesium metal demonstration line continues to progress normally after optimization and adjustment, with plans to achieve both revenue and profit growth in 2025

On June 25, Punai Co., Ltd.'s stock price rose. By the close of trading on the 25th, Punai Co., Ltd. was up 3.09%, closing at 5.01 yuan per share.

When asked, "A wise decision-maker excels at making strategic moves during industry downturns. Does your company have any new plans for the magnesium metal demonstration line project?" Punai Co., Ltd. stated on the investor interaction platform on June 24 that the company's magnesium metal demonstration line is continuing to progress normally after optimization and adjustment, with no new plans at present.

In response to the questions "1. What is the current capacity and market share of your company's hydrometallurgical magnesium oxide? Are there any plans for capacity expansion in the next step? 2. What is the current status of your company's magnesium metal demonstration line project? Are there any specific plans for future advancement?" Punai Co., Ltd. stated on the investor interaction platform on June 23 that the company's high-activity magnesium oxide products for the hydrometallurgical industry began large-scale supply this year, with capacity continuously increasing. It is expected to reach an annual production capacity of 110,000 mt in the second half of this year, and further expansion will continue next year. Additionally, the company's magnesium metal demonstration line is continuing to progress normally after optimization and adjustment.

Punai Co., Ltd.'s previously disclosed 2025 Q1 report shows that in the first quarter of this year, the company achieved a total operating revenue of 1.34 billion yuan, up 3.17% YoY; net profit attributable to shareholders of the publicly listed firm was 54.8708 million yuan, down 15.91% YoY.

Punai Co., Ltd.'s 2024 annual report shows that in 2024, the world economy recovered slowly, and geopolitical tensions continued to escalate. Under the influence of various complex factors, both national and global steel production declined slightly compared to the previous year, and the supply-demand relationship remained "weak on both sides." The downstream sector, especially the steel industry, still focused on cost reduction and production cuts, and industry competition became increasingly fierce. Under the leadership of the board of directors and management, and with the efforts of all employees, the company actively faced various risks and difficulties, striving to narrow the decline in operating performance. In 2024, the company achieved an operating revenue of 5.1919565 billion yuan, down 5.13% YoY, and a net profit attributable to shareholders of the publicly listed firm of 135.0563 million yuan, down 45.48% YoY. Among them, the Steel Business Division achieved an operating revenue of 4.4326937 billion yuan, down 7.77% YoY; the Environmental Protection Materials Business Division achieved an operating revenue of 380.1793 million yuan, down 23.49% YoY; and the Raw Materials Business Division (renamed the New Materials Business Division in 2025) achieved an operating revenue of 816.6533 million yuan, up 40.30% YoY. (The above divisional operating revenue data is presented to maintain consistency and comparability, without excluding inter-divisional transaction revenue.)

In its 2024 annual report, Punai Co., Ltd. introduced that in 2024, the Raw Materials Business Division (renamed the New Materials Business Division in 2025) focused on expanding the market for efficient precipitants for nickel and cobalt extraction in hydrometallurgy while maintaining its existing magnesium-based raw materials and corundum-based products. The company's R&D team relied on resource advantages to focus on tackling a series of technical challenges and underwent a rigorous series of processes, including client-side pilot tests. In the second half of 2024, the company's efficient precipitant products successfully qualified as suppliers for multiple clients and gained recognition from multiple hydrometallurgical clients, including GEM. Currently, the company has achieved large-scale supply of efficient precipitant products.

Regarding the 2025 operational plan, Puyang Refractories Group outlined in its 2024 annual report: (1) The company's key tasks and arrangements for 2025 will focus on the group's budget targets, with revenue growth, cost reduction, expense control, and efficiency improvement as operational dimensions. It will enhance market competitiveness through data management, prioritize four key tasks, coordinate weak areas for improvement, strengthen enforcement and self-drive capabilities, efficiently achieve all objectives, and continuously improve operational quality. Specific management efforts include: 1. Continuously strengthen technological innovation, product innovation, process innovation, and efficient collaborative innovation to achieve strategic goals. 2. Enhance market competitiveness through technological breakthroughs and smart manufacturing while actively expanding domestic and overseas markets to achieve quality-driven scale growth and ensure operational targets. 3. Implement lean management and centralized coordination to comprehensively reduce costs and improve efficiency. 4. Deepen group-wide control and enhance organizational effectiveness. 5. Strengthen accounts receivable collection through various measures to minimize loss risks and financial costs while improving cash flow. 6. Optimize financing methods and channels to ensure normal capital turnover for production, operations, and investments. 7. Focus on practical operations, ensure management effectiveness, guarantee task implementation, and achieve budget targets. 8. Strengthen high-quality talent cultivation and team building to provide strong human resources for corporate development. (2) Key operational indicators for 2025

Southwest Securities issued a research report on April 26, recommending a "buy" rating for Puyang Refractories Group. Key reasons include: 1) Optimized product structure with prominent integrated service advantages; 2) Slight decline in gross margin but significant R&D investment increase; 3) Stable traditional business and promising new ventures. Risk warnings: Macroeconomic volatility risks; slower-than-expected business expansion; tariff policy changes.

On June 24, Puyang Refractories Group stated on the investor interaction platform that its magnesium metal demonstration line continues normal progress after optimization adjustments. On February 28, the company mentioned in response to investor concerns: Recent low magnesium metal prices have slowed down the optimization process.

Reviewing the H1 2025 magnesium price trend shows an overall pattern of initially low, then high, jumping initially and then pulling back, followed by bottom fluctuations. In H1, prolonged concentrated shutdowns of magnesium plants quietly reversed the supply-demand imbalance. Tight spot supply and low inventory created favorable conditions for periodic price increases, while market sentiment fluctuated frequently due to factors like "solid waste slag burial," "dolomite mine shutdowns in Wutai," and "environmental protection checks."As of June 25, the average price of 99.90% magnesium ingot (Fugu, Shenmu) reached its year-to-date high of 17,450 yuan/mt on May 13 and May 14. The year-to-date low was 15,050 yuan/mt on March 6 and March 7. The price spread between the year-to-date high and low was 2,400 yuan/mt, indicating significant volatility.

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According to the latest quotes from SMM, on June 25, the average price of 99.90% magnesium ingot (Fugu, Shenmu) was reported at 16,150 yuan/mt, up 0.62% from the previous trading day. According to SMM, the increase in magnesium prices on June 25 was mainly supported by low inventory and limited market supply. Additionally, domestic trade participants entering the market to purchase goods boosted the confidence of magnesium producers, leading to a rebound in magnesium prices. Furthermore, some speculative funds in the market were bullish on the future outlook, prompting some customers with orders to panic-buy, which also contributed to the rise in magnesium prices. It is worth mentioning that the average price of 16,150 yuan/mt only increased slightly by 50 yuan/mt compared to the average price of 16,000 yuan/mt on December 31, 2024.