On March 24, Huaxi Nonferrous's stock price declined. As of 11:24 am on March 24, Huaxi Nonferrous fell by 1.27%, trading at 24.82 yuan per share.
Huaxi Nonferrous announced in the evening of March 21 that to accelerate the company's tin resource chain strengthening development strategy, enhance core competitiveness and sustainable development capabilities, Peak Company plans to invest in the construction of a deep mining project for the 100+105 ore bodies, increasing ore capacity from 330,000 mt/year to 450,000 mt/year. According to the "Feasibility Study Report on the Deep Mining Project of the 100+105 Ore Bodies of Guangxi Peak Mining Co., Ltd." issued by Tongling Nonferrous Design and Research Institute Co., Ltd., the total planned investment for the project is 941,700,000 yuan, utilizing existing assets and working capital of 462,685,000 yuan, with an additional 628,256,700 yuan required, sourced from own funds and self-raised funds. The construction includes a mixed hoisting shaft, ventilation shaft, ramp, underground blind shaft, track transportation, and sludge discharge systems, among other works.
Regarding the impact of this project on the company, Huaxi Nonferrous stated:This project is a significant manifestation of the company's implementation of the "Three-Year Action Plan (2024-2026) for Enhancing the Core Competitiveness of Specialty Metal Industries and Building a First-Class Enterprise" of Guangxi Huaxi Nonferrous Metals Co., Ltd. It will further increase the production of tin, antimony, indium, lead, zinc, and silver, enhancing the company's profitability,strengthening market competitiveness and overall benefits, aligning with the long-term interests of the company and all shareholders. Peak Company will proceed with the project as planned, which is not expected to have a significant adverse effect on the company's financial and operational conditions, and there are no circumstances that would harm the interests of the company and its shareholders, especially small and medium-sized shareholders.
Huaxi Nonferrous also highlighted potential risks in the announcement: (1) Project Approval Risk: The construction of this project requires obtaining relevant permits from national ministries and local governments, and there may be a risk of not being able to implement it on schedule. To address this, the company has prioritized the acquisition of construction permits and other approval requirements, accelerating the related approval processes to strive for timely completion and commencement. (2) Safety Construction Risk: There may be various safety risks during the construction and operation of the project. In response, Peak Company has commissioned a safety pre-assessment unit to conduct a safety pre-assessment, identifying the safety risks present in the project, and implementing corresponding safety management and response measures, such as setting up a safety production management organization, enhancing employee safety training, establishing a safety risk grading control and hidden danger investigation and governance system, and a dual prevention mechanism for mines, to reduce these risks.
In its 2024 annual performance forecast, Huaxi Nonferrous previously announced that the company expects the net profit attributable to the parent company for 2024 to be between 610,000,000 yuan and 680,000,000 yuan, representing an increase of 83.91% to 105.02% compared to the same period of the previous year (after restatement).
Note: During the reporting period, the company completed the acquisition of 100% equity in Foson Company, which was included in the company's consolidated financial statements. According to the relevant provisions of the "Enterprise Accounting Standards," the company retrospectively adjusted the 2023 annual financial data disclosed, where the net profit after deducting non-recurring gains and losses for the same period of the previous year had to exclude the entire net profit of Foson Company for the same period in 2023.
For the main reasons behind the projected increase in performance, Huaxi Nonferrous announced: During the reporting period, the company achieved a substantial improvement in performance compared to the same period of the previous year, mainly due to: (1) Strengthening safety management, ensuring safe production throughout the year, laying a solid foundation for stable and high production. (2) Optimizing production processes, enhancing the balance of three-level ore volumes, improving the recovery rate of mineral processing, and boosting comprehensive utilization levels, resulting in a significant increase in production. (3)Accurately seizing the opportunity of the recovery of the nonferrous metals market, promptly adjusting business strategies, actively expanding the market, improving product quality, and achieving a rise in selling prices compared to the same period. (4) Continuously conducting special actions such as repairing and reusing old materials, and saving costs, comprehensively enhancing fine management levels, effectively improving operational efficiency and cost control capabilities. (5) Compared to the same period of the previous year (legally disclosed data), the company completed the cash acquisition of 100% equity in Foson Company during the reporting period, making Foson Company a wholly-owned subsidiary within the company's consolidated financial statements, leading to a certain degree of growth in the company's asset scale, sales revenue, and operating performance.
