Market Performance - The company reported a market share of over 30.0% in the tantalum and niobium wet process products for four consecutive years[8]. - The company continues to expand its production capacity to meet growing market demand for tantalum and niobium products[8]. - Revenue for the six months ended June 30, 2022, was RMB 469.7 million, an increase of 35.6% compared to RMB 346.5 million in the same period last year[22]. - Total revenue increased by approximately RMB 123.2 million or 35.6% to about RMB 469.7 million for the six months ended June 30, 2022, compared to RMB 346.5 million for the same period in 2021[31]. - Revenue from customer contracts for the six months ended June 30, 2022, was RMB 469,719,000, up from RMB 346,501,000 in the same period of 2021, representing a growth of approximately 35.4%[133]. Financial Performance - Gross profit reached RMB 163.5 million, representing a significant increase of 108.7% from RMB 78.3 million year-on-year, with a gross margin of 34.8%[22]. - Gross profit rose by approximately RMB 85.2 million or 108.7% to about RMB 163.5 million, with the gross profit margin increasing from 22.6% to 34.8%[34]. - The company achieved a net profit of approximately RMB 62.7 million, up 27.6% from RMB 49.1 million in the previous year[22]. - Net profit for the period was approximately RMB 62.7 million, an increase of about RMB 13.6 million or 27.6% compared to RMB 49.1 million for the same period in 2021[42]. - Basic earnings per share for the period was RMB 0.21, compared to RMB 0.16 in the same period last year, reflecting a 31.3% increase[101]. Research and Development - The company has maintained a strong focus on research and development, with several high-tech products recognized at the provincial level[8]. - The company introduced 21 new patents and 6 software copyrights during the reporting period, with 66 additional patents pending[25]. - Research and development expenses for the first half of 2022 were RMB 18,840,000, up from RMB 12,492,000 in the same period of 2021, indicating a growth of approximately 50.9%[138]. Strategic Initiatives - The company has successfully launched two pyrometallurgical projects in Guangdong and Guizhou, contributing to the sales of tantalum powder, bars, and ingots[8]. - The company has invested in vertical integration strategies to enhance its product offerings in the tantalum and niobium sectors[8]. - A strategic partnership was formed with Jiangxi Ganfeng Lithium Co., Ltd., resulting in a financing of HKD 240 million, making Ganfeng Lithium the second-largest shareholder with a 16.7% stake[28]. - The company plans to establish a subsidiary in Leizhou, China, to implement a new investment project with an annual production capacity of 3,000 tons of high-performance tantalum niobium oxide[95]. Financial Position - The current ratio decreased to 1.73 from 1.78, reflecting a 2.8% decline, while the quick ratio fell by 17.1% to 0.97[22][19]. - The capital debt ratio increased significantly to 47.7%, up 19.6 percentage points from 28.1%[22][20]. - The total debt of the company as of June 30, 2022, was approximately RMB 503.2 million, up from RMB 345.1 million as of December 31, 2021[48]. - The company's debt-to-equity ratio increased to approximately 47.7% as of June 30, 2022, compared to 28.1% as of December 31, 2021, primarily due to an increase in interest-bearing bank loans[49]. - The company reported a net cash outflow of approximately RMB 23.0 million during the reporting period, with net cash used in operating activities amounting to RMB 166.9 million[47]. Employee and Management - The company employed a total of 474 employees as of June 30, 2022, with total employee compensation amounting to approximately RMB 36.7 million for the reporting period[64]. - The total remuneration paid to key management personnel for the six months ended June 30, 2022, was RMB 2,455,000, an increase of 8.6% compared to RMB 2,262,000 for the same period in 2021[161]. - Ms. Wu Shan-dan resigned as an executive director and chief financial officer effective April 15, 2022, to focus on other matters[83]. Corporate Governance - The company has established a foreign exchange risk management system to mitigate potential risks associated with currency fluctuations[53]. - The company did not declare any interim dividend for the six months ended June 30, 2022, similar to the previous year[65]. - The company confirms that at least 25% of its issued shares are held by public shareholders as per the listing rules[80]. Capital Expenditures - Capital expenditures for the reporting period were approximately RMB 56.7 million, compared to RMB 25.0 million for the same period last year[52]. - The allocation of net proceeds includes 28.9% for constructing new production facilities for tantalum powder and rods, with RMB 26.8 million already used[85]. - The company invested RMB 56,660,000 in property, plant, and equipment during the six months ended June 30, 2022, compared to RMB 24,963,000 in the same period of 2021[119].

Financial Performance - The company's revenue for the year ended December 31, 2021, was RMB 763.725 million, representing a 26.9% increase from RMB 601.652 million in 2020[12] - Gross profit for the same period was RMB 205.520 million, up 19.0% from RMB 172.650 million in 2020[12] - The annual profit increased by 45.2% to RMB 102.065 million compared to RMB 70.309 million in the previous year[12] - The company's revenue for 2021 was approximately RMB 763.7 million, representing a year-on-year increase of 26.9%, while net profit was approximately RMB 102.1 million, up 45.2% year-on-year[21] - Total revenue increased by approximately RMB 162.0 million or 26.9% to RMB 763.7 million for the year ended December 31, 2021, compared to RMB 601.7 million for the previous year[33] - Annual profit increased by approximately RMB 31.8 million or 45.2% to RMB 102.1 million, with net profit margins of 13.4% compared to 11.7% in the previous year[59] Market Position and Share - The company maintained a market share of over 30.0% in the tantalum and niobium wet metallurgy products for three consecutive years from 2019 to 2021[4] - Overseas sales reached approximately RMB 107.9 million in 2021, marking a year-on-year growth of 41.6%, which accounted for 14.1% of total revenue[24] - The company plans to strengthen its sales network in overseas markets to expand its customer base and increase market share[114] Production and Sales - In 2021, the total production of the company's main products, tantalum pentoxide and potassium fluotantalate, was 1,684 tons, with total sales of approximately 1,686 tons[21] - Revenue from potassium tantalate increased by approximately RMB 75.0 million or 76.9% to RMB 172.5 million, driven by increased sales volume[35] - Revenue from recycled products rose from approximately RMB 20.6 million to RMB 76.7 million, attributed to higher sales of tin hydroxide, potassium fluorosilicate, and tungsten acid[38] - Revenue from other products increased by approximately RMB 40.6 million or 66.6% to RMB 101.6 million, compared to RMB 61.0 million in the previous year[39] - Processing service revenue surged by approximately RMB 73.3 million or 1,263.8% to RMB 79.1 million, due to a significant increase in customer orders[40] Cost and Expenses - Total cost of sales increased by approximately RMB 129.2 million or 30.1% to RMB 558.2 million, primarily due to increased sales volume and higher average procurement prices for tantalum and niobium ores[43] - Sales and distribution expenses increased by approximately RMB 4.3 million or 51.2% to RMB 12.7 million, with employee costs rising by RMB 3.8 million[49] - Administrative expenses rose by approximately RMB 11.0 million or 15.1% to RMB 83.7 million, driven by an increase in employee costs and other administrative expenses[53] - Research and development expenses amounted to RMB 29.8 million, up from RMB 24.0 million, focusing on improving the purity levels of tantalum and niobium oxides[53] Financial Ratios and Capital Structure - The current ratio decreased to 1.78 from 2.40, a decline of 25.8%[12] - The quick ratio also fell to 1.17 from 1.50, a decrease of 22.0%[12] - The capital debt ratio increased to 28.1% from 15.2%, an increase of 12.9 percentage points[12] - The debt-to-equity ratio as of December 31, 2021, was approximately 28.1%, up from 15.2% as of December 31, 2020, primarily due to a decrease in cash and cash equivalents[94] Research and Development - The company has obtained 12 patents and developed three new tantalum and niobium salt products, indicating ongoing innovation efforts[28] - Continuous investment in R&D for new product projects and innovative production methods is a priority for the group to enhance capacity and product purity[111] Governance and Management - The company has a strong management team with expertise in metallurgy and project management, including Mr. Zhong Yuelian, who has over 27 years of experience in tantalum and niobium metallurgy[134] - The company has been expanding its board with experienced professionals to enhance governance and oversight[127] - The company emphasizes the importance of corporate governance and compliance in its operations[128] - The company has a clear division of responsibilities between the board and senior management, ensuring effective oversight[145] Risk Management and Compliance - The internal control and risk management systems were reviewed and deemed effective, ensuring the management of significant risks associated with the business environment[183] - The company has established a risk management framework that includes identifying significant risks, assessing their impact, and implementing necessary measures to manage those risks[183] Investor Relations - The company has established an investor relations policy to ensure timely and fair access to information for investors[198] - The company has maintained effective communication with investors to enhance transparency and understanding of its business and development[198]

Financial Performance - For the six months ended June 30, 2021, the total revenue was RMB 346.5 million, an increase of 9.2% compared to RMB 317.4 million in the same period last year[21]. - The net profit for the period was approximately RMB 49.1 million, representing a 39.3% increase from RMB 35.3 million in the previous year[21]. - Revenue increased by approximately RMB 29.1 million or 9.2% to about RMB 346.5 million, driven mainly by increased sales of potassium fluotantalate[33]. - Sales of potassium fluotantalate generated revenue of approximately RMB 104.3 million, an increase of 109.9% compared to RMB 49.7 million in the same period last year[36]. - Sales of high-purity niobium oxide reached approximately 133.3 tons, a year-on-year increase of 66.9%[31]. - The gross profit decreased by approximately RMB 16.2 million or 17.1% to about RMB 78.3 million, primarily due to a decline in gross profit margin[40]. - The gross profit margin decreased to 22.6%, down 7.2 percentage points from 29.8% in the previous year[21]. - Basic earnings per share for the period was RMB 0.16, up from RMB 0.13 in 2020[105]. - Total comprehensive income for the period was RMB 48,875 thousand, compared to RMB 36,181 thousand in the same period last year[108]. Production and Sales - The total production of main products was approximately 749.2 tons, a decrease of 17.5% year-on-year[25]. - The company aims to enhance high-purity product output while transitioning production lines[25]. - The company developed nearly 20 new qualified customers during the reporting period, enhancing customer structure and reserves[31]. - The company achieved external sales amounting to approximately RMB 42.1 million, a year-on-year increase of 32.4%[31]. - Sales costs increased by approximately RMB 45.3 million or 20.3% to about RMB 268.2 million, mainly due to increased raw material purchase volume and prices[39]. Research and Development - The company holds 35 patents, reflecting its commitment to research and development[3]. - The company obtained 7 new patent authorizations and applied for 2 invention patents during the reporting period[28]. - Research and development expenses for the current period were approximately RMB 12.5 million, compared to RMB 12.3 million for the six months ended June 30, 2020, focusing on improving production processes[45]. - The company will increase R&D investment to develop new products that meet market demands and enhance production processes[70]. Financial Position - The company maintained a current ratio of 2.4, indicating stable liquidity[21]. - The quick ratio improved by 13.3% to 1.7 compared to 1.5 in the previous year[21]. - The capital debt ratio decreased to 8.8%, down 6.4 percentage points from 15.2%[21]. - Total debt as of June 30, 2021, was approximately RMB 230.4 million, down from RMB 265.9 million as of December 31, 2020[54]. - The company's net asset value increased to RMB 570,637 thousand as of June 30, 2021, compared to RMB 521,762 thousand at the end of 2020[113]. - The carrying amount of interest-bearing bank loans as of June 30, 2021, was RMB 230,374,000, a decrease from RMB 265,930,000 as of December 31, 2020, indicating a reduction of 13.3%[158]. Corporate Governance - The board of directors decided not to declare any interim dividend for the six months ended June 30, 2021[74]. - The board of directors is committed to maintaining high standards of corporate governance and has implemented measures to enhance internal control systems[96]. - The company has complied with all applicable provisions of the corporate governance code, except for a deviation regarding the separation of the roles of chairman and CEO[97]. Future Outlook - The company anticipates continued demand for tantalum and niobium materials driven by the rapid development of industries such as new energy vehicles and superconducting materials[67]. - The company plans to expand the production capacity of wet-process products and enhance processing capabilities for complex raw materials to maintain industry leadership[69]. - The company aims to increase the output of high-value-added products, such as high-purity niobium and tantalum oxides, and will invest more in overseas marketing resources[70]. - The company is committed to completing two ongoing pyrometallurgical projects, which will enhance its product line and overall competitiveness[71]. Employee and Management - As of June 30, 2021, the company had a total of 261 employees and provides regular training programs to enhance their skills and knowledge[73]. - Total remuneration for key management personnel was RMB 2,262,000 for the six months ended June 30, 2021, up from RMB 1,823,000 in the same period of 2020, reflecting a growth of 24.1%[155]. - The company’s short-term employee benefits increased to RMB 2,133,000 for the six months ended June 30, 2021, compared to RMB 1,782,000 in the same period of 2020, marking an increase of 19.7%[155]. Cash Flow and Investments - For the six months ended June 30, 2021, the company reported a net cash inflow from operating activities of RMB 62,508 thousand, a significant improvement compared to a net outflow of RMB 83,410 thousand in the same period of 2020[118]. - The company incurred a net cash outflow from investing activities of RMB 28,718 thousand for the six months ended June 30, 2021, compared to RMB 7,374 thousand in the same period of 2020[118]. - The company’s financing activities resulted in a net cash outflow of RMB 40,189 thousand for the six months ended June 30, 2021, compared to a net inflow of RMB 225,216 thousand in the same period of 2020[118].

Financial Performance - For the year ended December 31, 2020, the total revenue was RMB 601,652,000, representing a slight increase of 0.2% from RMB 600,644,000 in 2019[12] - The gross profit for the same period was RMB 172,650,000, which is an increase of 8.6% compared to RMB 159,004,000 in 2019[12] - The annual profit for 2020 was RMB 70,309,000, reflecting a 0.9% increase from RMB 69,652,000 in 2019[12] - The group's revenue for the year was approximately RMB 601.7 million, a slight increase of 0.2% compared to the previous year[31] - Net profit for the year was approximately RMB 70.3 million, representing a year-on-year growth of 0.9%[32] - Revenue from the sale of pentoxide products was approximately RMB 422.5 million, a decrease of RMB 63.0 million or 13.0% from RMB 485.5 million in 2019[39] - Revenue from potassium fluotantalate sales increased to approximately RMB 97.5 million, up RMB 46.8 million or 92.3% from RMB 50.7 million in 2019[40] - The sales revenue of industrial-grade niobium oxide increased by approximately RMB 42.6 million, a year-on-year growth of 20.9%[31] - The sales revenue of potassium fluotantalate rose by approximately RMB 46.8 million or 92.3% compared to the previous year[31] Production and Sales - The total production of pentoxide and potassium fluotantalate was approximately 1,781.1 tons, with total sales reaching about 1,868.9 tons for the year[2] - The total production of the main products, pentoxide and potassium fluotantalate, reached 1,781.1 tons, an increase of 21.7% year-on-year[27] - The total sales of pentoxide and potassium fluotantalate amounted to 1,868.9 tons, reflecting a year-on-year increase of 17.9%[28] - The company achieved a significant increase in by-product fluorine salt production, exceeding 2,000 tons, a year-on-year growth of 52.6%[27] - The export business saw significant growth, with export revenue exceeding RMB 76 million, a year-on-year increase of 20%[28] Research and Development - The company holds 29 patents and has been recognized as a national high-tech enterprise, indicating a strong focus on R&D[2] - The company obtained 4 new invention patents during the year, contributing to its R&D efforts[33] - The company aims to enhance its research and development efforts for new products and innovative production methods, focusing on high-purity tantalum powder and lithium battery materials[122] - The company plans to continue enhancing operational management and R&D innovation to solidify its leading position in the industry[16] Financial Position and Liquidity - The company maintained a current ratio of 2.41 and a quick ratio of 1.51 as of December 31, 2020, indicating strong liquidity[12] - The capital debt ratio improved to 15.2% from 26.4% in 2019, showing a significant reduction in leverage[12] - Cash and cash equivalents increased to approximately RMB 186.4 million as of December 31, 2020, compared to approximately RMB 58.5 million as of December 31, 2019[97] - The total debt as of December 31, 2020, was approximately RMB 265.9 million, up from approximately RMB 143.3 million as of December 31, 2019[100] - The capital debt ratio as of December 31, 2020, was approximately 15.2%, down from 26.4% as of December 31, 2019, primarily due to a decrease in cash and cash equivalents[101] Expenses and Costs - Total sales costs decreased to approximately RMB 429.0 million, down RMB 12.6 million or 2.9% from RMB 441.6 million in 2019[46] - Administrative expenses increased from approximately RMB 56.8 million in 2019 to approximately RMB 72.7 million in 2020, reflecting a growth of 28.0%[58] - Research and development expenses remained stable at approximately RMB 24.0 million for both 2019 and 2020, focusing on improving the purity levels of tantalum and niobium oxides[58] - Employee costs in sales and distribution decreased from RMB 3.3 million in 2019 to RMB 2.6 million in 2020, while consultancy fees increased significantly[54] Corporate Governance - The company is committed to high standards of corporate governance and has adopted measures to enhance internal control systems and ongoing professional training for directors[153] - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a balance of power and independent oversight[158] - The company has complied with all applicable provisions of the corporate governance code during the review year, except for a deviation regarding the roles of the chairman and CEO[155] - The company has established a clear division of responsibilities between the board and senior management, with the board providing guidance and effective supervision[158] Future Plans and Market Strategy - The company aims to strengthen its market position and expand its capital base following its successful listing on the Hong Kong Stock Exchange in March 2020[3] - The company plans to continue investing in expanding its production and sales into downstream products, particularly tantalum powder and rods, to meet growing market demand[121] - The company plans to strengthen its sales network in overseas markets to expand its customer base and increase market share[125] - The company is exploring potential acquisitions to bolster its market position, with a budget of $G million set aside for strategic investments[140] Shareholder Engagement - Shareholders holding more than 10% of the voting shares have the right to request a special general meeting within two months of submitting a request[199] - Shareholders can submit inquiries to the board in writing, which must be sent to the company's main office in Hong Kong[200]

Revenue and Profitability - Revenue for the six months ended June 30, 2020, was RMB 317,396,000, representing a 4.6% increase from RMB 303,487,000 in 2019[14] - The company achieved a net profit of RMB 35,253,000, a decrease of 13.2% from RMB 40,607,000 in 2019[14] - Adjusted net profit, excluding listing expenses, was RMB 46,721,000, reflecting a 4.1% increase from RMB 44,867,000 in the previous year[14] - Profit for the period decreased by approximately RMB 5.3 million to about RMB 35.8 million, with net profit margin decreasing from 13.4% to 11.1%[49] - Basic earnings per share decreased to RMB 0.13 from RMB 0.18, a decline of 27.8%[112] Gross Profit and Margins - Gross profit increased by 13.0% to RMB 94,520,000, with a gross margin of 29.8%, up from 27.6% in the previous year[14] - Gross profit increased by approximately RMB 10.9 million or 13.0% to about RMB 94.5 million, driven by revenue growth, with gross margin rising from 27.6% to 29.8%[39] Sales and Production - Sales volume of tantalum pentoxide products reached 866.1 tons, a 27.1% increase compared to 681.6 tons in 2019[14] - Production of tantalum pentoxide products was 820.1 tons, up 31.8% from 622.3 tons in the previous year[14] - In the first half of 2020, the total production of the company's main products, including pentoxide and super acid potassium, reached approximately 907.9 tons, an increase of about 33.3% compared to the same period in 2019[19] - The total sales volume of pentoxide and super acid potassium was approximately 945.4 tons, representing a year-on-year increase of about 28.6%[27] - The sales volume of industrial-grade silver oxide reached approximately 689.6 tons, an increase of about 53.5% compared to the same period in 2019[27] Financial Position and Ratios - The current ratio remained stable at 2.5, while the quick ratio improved by 5.9% to 1.8[14] - The capital debt ratio decreased significantly to 9.6% from 26.4% in the previous year, indicating improved financial stability[14] - Total debt amounted to approximately RMB 240.9 million as of June 30, 2020, up from RMB 143.3 million as of December 31, 2019[54] - The debt-to-equity ratio decreased to approximately 9.6% as of June 30, 2020, down from 26.4% as of December 31, 2019, due to increased cash and equity[55] Research and Development - The company holds 27 patents and has been recognized as a national high-tech enterprise, reflecting its commitment to R&D[3] - Research and development expenses for the period amounted to approximately RMB 12.3 million, accounting for about 3.9% of total revenue, with a year-on-year increase of about 2.5%[26] - The company received 2 invention patents and 1 utility model patent during the reporting period, enhancing its research and development capabilities[26] - The company aims to enhance product quality by investing in R&D and collaborating with research institutions to improve purity levels[69] Market and Expansion Plans - The company plans to leverage its capital platform post-IPO to strengthen its market leadership in tantalum and niobium metallurgy[3] - The company plans to expand production capacity for its main product, pentoxide, and explore downstream product manufacturing[68] - Plans to establish offices in the UK and Brazil to expand market reach and secure stable raw material supply[70] Corporate Governance and Compliance - The company is committed to high standards of corporate governance and has complied with all applicable provisions of the corporate governance code since its listing[102] - The audit committee has reviewed the unaudited financial reports for the six months ending June 30, 2020, and agreed with the accounting policies adopted by the company[106] Cash Flow and Financial Resources - Cash and cash equivalents increased to approximately RMB 193.8 million as of June 30, 2020, compared to RMB 58.5 million as of December 31, 2019[52] - The company reported a net cash inflow from financing activities of RMB 225,216 thousand for the six months ended June 30, 2020, compared to a net outflow of RMB (49,821) thousand in 2019[124] - The total cash and cash equivalents at the end of June 30, 2020, increased to RMB 193,824 thousand from RMB 84,859 thousand at the end of June 30, 2019, marking a growth of 128.5%[124] Shareholder Information - Major shareholders include Jiawei Resources Seychelles with 157,500,000 shares (52.50%) and MACRO-LINK International Mining Limited with 67,500,000 shares (22.50%)[87] - The company holds a 52.50% equity interest in Jiawei Resources Seychelles, which is fully owned by Mr. Wu[78] Employee and Labor Relations - The company has established a union to protect employees' rights and assist in achieving economic goals[80] - Employee salaries are determined based on position, job nature, and annual performance evaluations[80] - The company provides regular training programs for employees to enhance their skills and knowledge[80] Dividend Policy - The company did not declare any interim dividend for the six months ended June 30, 2020, consistent with the previous year[75] - The company did not declare or propose any dividends during the reporting period, consistent with the previous year[143]

[Company Overview](index=2&type=section&id=Company%20Profile) [Company Profile and Information](index=2&type=section&id=Company%20Profile) Ximei Resources, China's largest tantalum-niobium hydrometallurgical product producer from 2016-2018, listed on HKEX in March 2020, provides key corporate and board information - The Group is a leading producer of tantalum-niobium metallurgical products in China, primarily offering tantalum oxide, niobium oxide, and potassium fluotantalate, along with related processing services[2](index=2&type=chunk) - The Group was China's largest producer of tantalum-niobium hydrometallurgical products by total annual sales volume for fiscal years 2016, 2017, and 2018[2](index=2&type=chunk)[19](index=19&type=chunk) - The company's shares were successfully listed on the Main Board of the Hong Kong Stock Exchange on **March 12, 2020**, with stock code **9936**[19](index=19&type=chunk)[12](index=12&type=chunk) - The company's Board of Directors comprises Executive Directors Mr. Wu Lijiao (Chairman) and Ms. Wu Shandan, Non-Executive Director Mr. Zeng Min, and three Independent Non-Executive Directors Mr. Liu Guohui, Mr. Zhong Hui, and Mr. Yin Fusheng[11](index=11&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) In FY2019, revenue grew **16.7%** to **RMB 601 million**, but gross profit and net profit declined due to increased cost of sales and listing expenses, with net profit attributable to owners decreasing **9.6%** to **RMB 69.65 million**, while liquidity and solvency ratios improved Key Financial Performance (RMB thousand) | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 600,644 | 514,718 | 16.7% | | Gross Profit | 159,004 | 165,233 | (3.8)% | | Profit Before Tax | 83,941 | 90,094 | (6.8)% | | Profit Attributable to Owners of the Company | 69,652 | 77,071 | (9.6)% | | Basic Earnings Per Share (RMB) | 0.31 | 0.34 | (8.8)% | Key Financial Ratios | Metric | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 2.45 | 2.20 | 11.4% | | Quick Ratio | 1.65 | 1.20 | 37.5% | | Gearing Ratio | 26.4% | 19.4% | Increase of 7.0 percentage points | [Chairman's Statement](index=7&type=section&id=Chairman%27s%20Statement) [Chairman's Statement](index=7&type=section&id=Chairman%27s%20Statement) Chairman Mr. Wu Lijiao highlighted the Group's strong operational performance in 2019 despite trade tensions and price declines, with record production and sales of key products driving **16.7%** revenue growth, while profit decline was mainly due to listing expenses, and future strategy focuses on downstream expansion, R&D, and global market reach - The company's successful listing on the Main Board of the Stock Exchange on **March 12, 2020**, marks a new milestone for the Group's development[19](index=19&type=chunk) - In 2019, both production and sales volumes of niobium oxide and tantalum oxide reached historical highs, with production volumes increasing by **49.0%** year-on-year, and sales volumes growing by approximately **42.7%** and **138.7%** respectively[19](index=19&type=chunk) - Revenue in 2019 reached approximately **RMB 600.6 million**, a **16.7%** year-on-year increase, while profit was approximately **RMB 69.7 million**, a **9.6%** year-on-year decrease, primarily due to a significant increase in listing expenses[19](index=19&type=chunk) - Future strategy aims to consolidate industry leadership, extend into downstream products, continuously invest in R&D, strengthen overseas sales networks, and ensure raw material supply[24](index=24&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) [Market and Industry Overview](index=9&type=section&id=Market%20and%20Industry%20Overview) The tantalum-niobium hydrometallurgical product market benefits from growing demand in high-tech downstream industries, with continued growth in sales volume projected by Frost & Sullivan, driven by increased demand, technological upgrades, and stable raw material supply, despite a slight average price decrease in 2019 due to stable upstream supply, indicating a positive long-term outlook - Market growth is primarily driven by demand from downstream industries, including special alloys, chemical products, electronic ceramics, aerospace, high-end consumer electronics, defense, and cemented carbides[28](index=28&type=chunk) - Frost & Sullivan's report forecasts that the market size of China's cemented carbide, aerospace equipment manufacturing, and corrosion-resistant equipment industries will grow at CAGRs of **8.6%**, **28.6%**, and **9.8%** respectively between 2018 and 2023, thereby driving demand for tantalum-niobium metallurgical products[28](index=28&type=chunk) - The average market price of tantalum-niobium hydrometallurgical products in China is expected to have decreased in 2019, primarily due to stable supply of upstream tantalum and niobium ores[27](index=27&type=chunk) [Business Review](index=10&type=section&id=Business%20Review) In 2019, the company achieved significant milestones in production, sales, and R&D, including monthly product output exceeding **150 tonnes**, **98.9%** growth in electronic-grade tantalum-niobium metallurgical product sales, and the successful implementation of new extraction and water recycling technologies, reducing costs and environmental impact Production Volume by Product (tonnes) | Product | 2019 Production Volume (tonnes) | Year-on-Year Change | | :--- | :--- | :--- | | Industrial Grade Niobium Oxide | 176.6 | +49.0% | | Industrial Grade Tantalum Oxide | 944.4 | +19.3% | | High Purity Tantalum Oxide | 240.3 | +19.2% | | Potassium Fluotantalate | 100.9 | -49.4% | Sales Volume by Product (tonnes) | Product | 2019 Sales Volume (tonnes) | Year-on-Year Change | | :--- | :--- | :--- | | Industrial Grade Niobium Oxide | 194.8 | +42.7% | | High Purity Niobium Oxide | 6.2 | +138.7% | | Industrial Grade Tantalum Oxide | 1,072.4 | -4.6% | | High Purity Tantalum Oxide | 228.4 | -47.5% | - Significant progress was made in R&D, with the successful application of industry-leading new extraction processes and achieving a wash water recycling rate of **75%**, a first in the industry[37](index=37&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) This section details the company's financial performance, with **16.7%** total revenue growth in 2019 driven by a **38.7%** increase in pentoxide product sales, but gross margin declined from **32.1%** to **26.5%** due to lower average selling prices and higher-cost inventory, with increased expenses, particularly R&D and listing-related legal fees, leading to a **9.6%** year-on-year profit decrease [Future Outlook](index=27&type=section&id=Future%20Outlook) The company is optimistic about future growth driven by industry upgrades, increased demand for high-purity products, and expanding downstream applications, planning to extend its value chain, boost R&D in new processes and products like high-purity tantalum powder for semiconductor targets, and implement a global strategy with new offices in the UK and Brazil for market expansion and raw material sourcing - Plans to commence construction of a tantalum powder production line with an annual capacity of **100 tonnes** in 2020 to meet the growing demand for tantalum powder and tantalum bar products from downstream customers[128](index=128&type=chunk) - Accelerate R&D for new processes and products, focusing on high-purity tantalum powder for semiconductor sputtering targets and niobium oxide production processes for lithium battery materials[128](index=128&type=chunk) - Plans to establish offices in the UK to strengthen sales efforts in the European market and in Brazil to enhance cooperation with local mineral suppliers, ensuring raw material supply[128](index=128&type=chunk) [Human Resources and Training](index=28&type=section&id=Human%20Resources%20and%20Training) As of end-2019, the Group had **220** employees, emphasizing staff development through regular training, with total employee costs significantly increasing to **RMB 39.1 million** in 2019 from **RMB 24.9 million** in 2018, and statutory social insurance and housing provident fund contributions made for Chinese employees Human Resources Metrics | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Total Employees (Year-end) | 220 | - | | Total Employee Costs (RMB million) | 39.1 | 24.9 | [Dividends](index=28&type=section&id=Dividends) The Board of Directors did not propose any final dividend for the year ended **December 31, 2019** - The Board of Directors did not propose a final dividend for the **2019** fiscal year[132](index=132&type=chunk) [Comparison of Business Objectives and Actual Progress](index=29&type=section&id=Comparison%20of%20Business%20Objectives%20and%20Actual%20Progress) [Comparison of Business Objectives and Actual Progress](index=29&type=section&id=Comparison%20of%20Business%20Objectives%20and%20Actual%20Progress) The company outlined four key business objectives: downstream expansion into tantalum powder and bars, continuous R&D investment, strengthening overseas sales, and securing raw material supply, with approximately **RMB 109.5 million** in net proceeds from its March 2020 listing remaining unused as of end-2019, primarily earmarked for new production facilities and working capital to support these goals - The company's core business objectives are: (1) expanding production to downstream products such as tantalum powder and tantalum bars; (2) continuous investment in R&D; (3) strengthening overseas sales networks; and (4) ensuring raw material supply[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[140](index=140&type=chunk) - The company was listed on **March 12, 2020**, with net proceeds of approximately **RMB 109.5 million**, which remained unutilized during 2019[141](index=141&type=chunk) Planned Use of Proceeds | Planned Use of Proceeds | Allocation Ratio | Amount (approx. RMB million) | | :--- | :--- | :--- | | Construction of new production facilities (tantalum powder and bars) | 68.3% | 74.8 | | Working capital for new production facilities | 18.4% | 20.1 | | Strengthening European sales network and Brazilian procurement channels | 3.5% | 3.8 | | General working capital and corporate purposes | 9.8% | 10.7 | [Profiles of Directors and Senior Management](index=32&type=section&id=Profiles%20of%20Directors%20and%20Senior%20Management) [Profiles of Directors and Senior Management](index=32&type=section&id=Profiles%20of%20Directors%20and%20Senior%20Management) This section provides detailed profiles of the company's Board of Directors and senior management team, including Group founder, Chairman, and CEO Mr. Wu Lijiao with over **30 years** of experience in tantalum-niobium metallurgy, Executive Director and CFO Ms. Wu Shandan with over **10 years** of financial management experience, and other key non-executive, independent non-executive directors, and senior executives with extensive professional backgrounds - Mr. Wu Lijiao, **56** years old, is the Group's founder, Chairman of the Board, Executive Director, Chief Executive Officer, and a controlling shareholder, possessing over **30 years** of experience in the tantalum-niobium metallurgical industry[146](index=146&type=chunk)[147](index=147&type=chunk) - Ms. Wu Shandan, **37** years old, is an Executive Director and Chief Financial Officer, primarily responsible for the Group's financial matters, with over **10 years** of financial management experience[149](index=149&type=chunk)[151](index=151&type=chunk) - Independent Non-Executive Directors Mr. Liu Guohui, Mr. Zhong Hui, and Mr. Yin Fusheng possess extensive professional experience in accounting, materials engineering, and financial investment, respectively[153](index=153&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - Senior management includes Vice President Mr. Zhong Tielian and R&D Technology Center Director Mr. Shi Bo, among others, all with over **20 years** of extensive experience in the industry[162](index=162&type=chunk)[163](index=163&type=chunk) [Corporate Governance Report](index=37&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Report](index=37&type=section&id=Corporate%20Governance%20Report) The company maintains high corporate governance standards, adhering to listing rules since its March 2020 listing, with the sole deviation being the combined roles of Chairman and CEO held by Mr. Wu Lijiao, deemed in the Group's best interest, and the report details board composition, responsibilities, committee functions, diversity policy, internal controls, shareholder rights, and investor relations practices - The company has complied with the Corporate Governance Code since its listing, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Wu Lijiao[171](index=171&type=chunk)[172](index=172&type=chunk) - The Board of Directors comprises six directors, including two Executive Directors, one Non-Executive Director, and three Independent Non-Executive Directors, meeting the Listing Rules' requirements[177](index=177&type=chunk) - The company has established an Audit Committee, Remuneration Committee, and Nomination Committee, with clearly defined terms of reference and membership for each[183](index=183&type=chunk)[184](index=184&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - The Board confirmed that it has reviewed the effectiveness of the Group's internal control and risk management systems, deeming them effective and adequate in all material aspects[214](index=214&type=chunk) [Directors' Report](index=48&type=section&id=Directors%27%20Report) [Directors' Report](index=48&type=section&id=Directors%27%20Report) This report outlines the company's principal activities, performance, and financial position for FY2019, primarily engaged in non-ferrous metal product manufacturing and sales, with no final dividend proposed, and discloses key risks, post-listing shareholding structure, adopted share option scheme, customer and supplier concentration, related party transactions, share capital movements, and post-reporting period events - The Board of Directors did not propose a final dividend for the year ended **December 31, 2019**[238](index=238&type=chunk) - On **February 19, 2020**, the company conditionally adopted a share option scheme, with a maximum number of **30,000,000** shares that may be granted, representing **10%** of the total issued shares at the time of listing[272](index=272&type=chunk)[279](index=279&type=chunk) - As of the listing date, controlling shareholder Mr. Wu Lijiao held **52.5%** of the company's shares through his wholly-owned Jiawei Resources Seychelles[298](index=298&type=chunk)[301](index=301&type=chunk) - In 2019, sales to the top five customers accounted for **51.9%** of total revenue, with the largest customer accounting for **25.2%**; purchases from the top five suppliers accounted for **65.3%** of total cost of sales, with the largest supplier accounting for **22.5%**[317](index=317&type=chunk) - Post-reporting period events include the company's successful listing on **March 12, 2020**, and an assessment of the potential impact of the COVID-19 pandemic, with directors confirming no material adverse changes as of the report date[326](index=326&type=chunk)[669](index=669&type=chunk) [Independent Auditor's Report](index=64&type=section&id=Independent%20Auditor%27s%20Report) [Independent Auditor's Report](index=64&type=section&id=Independent%20Auditor%27s%20Report) Independent auditor Ernst & Young issued an unmodified opinion on Ximei Resources' 2019 consolidated financial statements, affirming their fair presentation of the Group's financial position, performance, and cash flows in compliance with HKFRS and the Companies Ordinance, highlighting key audit matters regarding inventory net realizable value and trade receivables expected credit loss provisions - Auditor Ernst & Young issued an unmodified opinion on the consolidated financial statements, deeming them to present fairly the Group's financial position and performance[330](index=330&type=chunk) - Key audit matters include: 1. **Net Realizable Value of Inventories**: Significant management judgment and estimation are involved in determining provisions for excess and obsolete inventories 2. **Expected Credit Loss Provision for Trade Receivables**: Significant judgment is required in measuring expected credit losses (ECL), and the amounts involved are material[332](index=332&type=chunk)[338](index=338&type=chunk)[343](index=343&type=chunk) [Consolidated Financial Statements](index=69&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=69&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In FY2019, the company's revenue increased **16.7%** to **RMB 600.6 million** from **RMB 514.7 million** in 2018, but gross profit slightly decreased to **RMB 159.0 million** from **RMB 165.2 million** due to a rise in cost of sales from **RMB 349.5 million** to **RMB 441.6 million**, resulting in an annual profit of **RMB 69.65 million**, down from **RMB 77.07 million** in 2018, after accounting for selling, administrative, and listing expenses Consolidated Statement of Profit or Loss (RMB thousand) | Item (RMB thousand) | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 600,644 | 514,718 | | Cost of sales | (441,640) | (349,485) | | **Gross Profit** | **159,004** | **165,233** | | Profit Before Tax | 83,941 | 90,094 | | Income tax expense | (14,289) | (13,023) | | **Profit for the Year** | **69,652** | **77,071** | [Consolidated Statement of Financial Position](index=71&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of **December 31, 2019**, the company reported total assets of **RMB 527.2 million**, total liabilities of **RMB 206.6 million**, and total equity of **RMB 320.6 million**, with net current assets of **RMB 236.6 million** and a current ratio of **2.45**, while key assets included trade and bills receivables (**RMB 169.2 million**), inventories (**RMB 129.9 million**), and property, plant and equipment (**RMB 89.53 million**), and the primary liability was interest-bearing bank borrowings (**RMB 143.3 million**) Consolidated Statement of Financial Position (RMB thousand) | Item (RMB thousand) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Non-current assets** | **127,514** | **107,819** | | **Current assets** | **399,710** | **365,263** | | *Of which: Inventories* | *129,879* | *162,722* | | *Of which: Trade and bills receivables* | *169,158* | *68,684* | | *Of which: Cash and cash equivalents* | *58,475* | *99,224* | | **Current liabilities** | **163,080** | **169,341** | | **Non-current liabilities** | **43,544** | **52,219** | | **Net Assets** | **320,600** | **251,522** | | **Total Equity** | **320,600** | **251,522** | [Consolidated Statement of Cash Flows](index=74&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In FY2019, the company's cash and cash equivalents decreased by **RMB 40.75 million**, with net cash outflow from operating activities of **RMB 4.73 million** primarily due to a significant increase in trade receivables, net cash outflow from investing activities of **RMB 24.99 million** mainly for property, plant, and equipment purchases, and net cash outflow from financing activities of **RMB 10.30 million** reflecting slightly higher loan repayments than new borrowings, ending the year with **RMB 58.48 million** in cash and cash equivalents Consolidated Statement of Cash Flows (RMB thousand) | Item (RMB thousand) | 2019 | 2018 | | :--- | :--- | :--- | | Net cash (used in)/from operating activities | (4,731) | 50,001 | | Net cash used in investing activities | (24,993) | (32,916) | | Net cash (used in)/from financing activities | (10,296) | 42,508 | | **Net (decrease)/increase in cash and cash equivalents** | **(40,020)** | **59,593** | | Cash and cash equivalents at beginning of year | 99,224 | 37,570 | | **Cash and cash equivalents at end of year** | **58,475** | **99,224** | [Notes to the Consolidated Financial Statements (Selected)](index=76&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and supplementary information for financial statement items, highlighting that the company primarily operates through its Chinese subsidiary Guangdong Zhiyuan New Material Co., Ltd., revenue recognition follows HKFRS 15, total director and executive remuneration increased, trade receivables significantly grew, most bank borrowings were personally guaranteed by shareholders (released pre-listing), and financial risk management policies are detailed - Note 5: Revenue in 2019 primarily derived from sales of products (**RMB 595.8 million**) and provision of processing services (**RMB 4.84 million**)[506](index=506&type=chunk) - Note 10: Total remuneration for directors and key executives in 2019 was **RMB 1.068 million**, higher than **RMB 0.91 million** in 2018[533](index=533&type=chunk) - Note 21: As of end-2019, total interest-bearing bank borrowings amounted to **RMB 143.3 million**, with some loans personally guaranteed by controlling shareholder Mr. Wu Lijiao and his spouse, which guarantees were released prior to the listing in **March 2020**[582](index=582&type=chunk)[586](index=586&type=chunk) - Note 27: Related party transactions during the year primarily involved a loan guarantee fee of **RMB 0.095 million** paid to shareholder Xinhua Lian Holdings Co., Ltd., which guarantee was released during the year[606](index=606&type=chunk) [Financial Summary](index=130&type=section&id=Financial%20Summary) [Financial Summary](index=130&type=section&id=Financial%20Summary) This section provides a summary of the Group's key financial data for four consecutive fiscal years from 2016 to 2019, showing a consistent growth trend in revenue, gross profit, profit before tax, and total assets, reflecting the company's steady business expansion Consolidated Results (RMB thousand) | Consolidated Results (RMB thousand) | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 600,644 | 514,718 | 307,360 | 217,441 | | Gross Profit | 159,004 | 165,233 | 87,344 | 51,757 | | Profit Before Tax | 83,941 | 90,094 | 46,634 | 28,920 | | Profit Attributable to Owners of the Company | 69,652 | 77,071 | 38,584 | 23,877 | Consolidated Assets and Liabilities (RMB thousand) | Consolidated Assets and Liabilities (RMB thousand) | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 527,224 | 473,082 | 329,667 | 232,317 | | Total Liabilities | (206,624) | (221,560) | (154,703) | (96,291) | | Equity Attributable to Owners of the Company | 320,600 | 251,522 | 174,964 | 136,026 |