Sinomine(SZ:002738)2025-08-01 10:55Part I Important Notice, Table of Contents, and Definitions This section provides essential disclaimers from management, outlines the report's structure, and defines key terms for clarity 1.1 Important Notice The company's board, supervisory board, and all senior executives guarantee the truthfulness, accuracy, and completeness of this annual report, free from false records, misleading statements, or major omissions, with all directors attending the board meeting reviewing this report - Company management ensures the truthfulness, accuracy, and completeness of the annual report and assumes corresponding legal responsibilities4 - The company's 2024 profit distribution plan is to distribute a cash dividend of 5.00 Yuan (tax included) per 10 shares to all shareholders based on the total share capital as of December 31, 2024, with no bonus shares or capital increase from the capital reserve4 1.2 Definitions This section defines abbreviations for key company entities, related parties, and professional terms used in the report, such as "Bikita" for Bikita Minerals (Private) Limited, "Tanco" for Tanco Mining Corporation of Canada, and "LCE" for Lithium Carbonate Equivalent, providing a basis for understanding the report content - The report clarifies abbreviations for the company and its major domestic and overseas subsidiaries, such as Bikita Mine and Tanco Mine, facilitating investor understanding of the company's complex equity structure and business entities12 Part II Company Profile and Key Financial Indicators The company's business has diversified from mineral exploration to lithium new energy and rare light metals, with 2024 financial performance showing significant declines in revenue and net profit due to market conditions 2.1 Company Information and Main Business Changes Sinomine Resource Group Co., Ltd. (stock code: 002738) has transformed its main business since its 2014 listing from solely solid mineral exploration services to three core segments: lithium new energy raw materials, rare light metal (cesium, rubidium) resource development and utilization, and traditional solid mineral exploration and mining rights development, through a series of acquisitions - The company's main business has expanded through multiple acquisitions from initial mineral exploration services to three major segments: lithium new energy raw materials, rare light metal resource development and utilization, and solid mineral exploration and mining rights development18 2.2 Key Accounting Data and Financial Indicators In 2024, the company's performance significantly declined due to market conditions, with operating revenue down 10.80% to 5.36 billion Yuan and net profit attributable to shareholders down 65.72% to 757 million Yuan, while total assets grew by 8.23% | Indicator | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 5,363,854,702.53 | 6,013,324,070.79 | -10.80% | | Net Profit Attributable to Shareholders (Yuan) | 756,974,637.04 | 2,208,162,354.73 | -65.72% | | Net Profit Attributable to Shareholders Excluding Non-Recurring Gains and Losses (Yuan) | 602,573,892.31 | 2,130,116,103.05 | -71.71% | | Net Cash Flow from Operating Activities (Yuan) | 500,018,302.86 | 3,002,095,050.03 | -83.34% | | Basic Earnings Per Share (Yuan/share) | 1.0498 | 3.1506 | -66.68% | | Weighted Average Return on Net Assets | 6.25% | 20.95% | -14.70% | | Total Assets (Yuan) | 17,192,842,452.12 | 15,884,832,497.44 | 8.23% | | Net Assets Attributable to Shareholders (Yuan) | 12,181,272,440.60 | 12,177,935,356.68 | 0.03% | 2.3 Quarterly Key Financial Indicators The company's 2024 performance showed a front-loaded to back-loaded trend, with Q4 revenue significantly increasing sequentially, but net profit fluctuating, and operating cash flow turning positive in Q4 after being negative in the first three quarters | Indicator (Yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,126,629,911.71 | 1,295,102,034.28 | 1,147,617,368.97 | 1,794,505,387.57 | | Net Profit Attributable to Shareholders | 256,150,429.61 | 216,841,155.72 | 72,762,533.07 | 211,220,518.64 | | Net Profit Attributable to Shareholders Excluding Non-Recurring Gains and Losses | 228,330,766.83 | 216,584,641.72 | -29,515,754.45 | 187,174,238.21 | | Net Cash Flow from Operating Activities | -105,936,459.82 | -1,224,234.93 | -61,128,450.22 | 668,307,447.83 | 2.4 Non-Recurring Gains and Losses Items and Amounts In 2024, the company's non-recurring gains and losses totaled 154 million Yuan, a significant increase from 78.05 million Yuan in 2023, primarily from government subsidies, reversal of impairment provisions for receivables, and other items | Item | 2024 Amount (Yuan) | 2023 Amount (Yuan) | | :--- | :--- | :--- | | Government subsidies recognized in current profit or loss | 51,653,592.78 | 73,340,380.52 | | Reversal of impairment provisions for receivables subject to separate impairment testing | 43,744,694.31 | - | | Other profit and loss items meeting the definition of non-recurring gains and losses | 49,355,434.43 | 2,113,101.52 | | Total | 154,400,744.73 | 78,046,251.68 | Part III Management Discussion and Analysis This section provides an in-depth analysis of the company's industry, main operations, core competencies, financial performance, asset and liability status, investment activities, and future development outlook 3.1 Industry Overview During the Reporting Period The company operates in industries facing both opportunities and challenges, with the lithium new energy sector benefiting from global decarbonization but experiencing price volatility, rare light metals gaining strategic value, and solid mineral exploration supported by national resource security policies - The lithium battery industry benefits from new energy vehicle penetration exceeding 50% and the expansion of the energy storage market, showing strong growth resilience, but lithium salt market price fluctuations have intensified293038 | Product Name | 2023 Production Volume (10,000 tons) | 2024 Production Volume (10,000 tons) | YoY Change | | :--- | :--- | :--- | :--- | | Lithium Carbonate | 51.79 | 70.1 | 35.35% | | Lithium Hydroxide | 31.96 | 41.4 | 29.54% | | Total | 85.5 | 113.9 | 33.22% | - Cesium and rubidium are indispensable critical minerals for strategic emerging industries, with scarce global resources, and the company's controlled Canadian Tanco Mine is the world's only existing producing pollucite primary mine, possessing significant resource advantages57 - National policies emphasize energy and resource security, encouraging increased exploration and development of strategic mineral resources, providing a favorable policy environment for the company's solid mineral exploration business65 3.2 Main Businesses During the Reporting Period The company operates three main businesses: lithium new energy raw material development, rare light metal (cesium, rubidium) resource development, and solid mineral exploration and mining rights development, covering a full value chain from mining to processing with significant resource holdings and production capacities - The company is an integrated lithium new energy raw material enterprise, with products including battery-grade lithium carbonate, lithium hydroxide, and lithium fluoride, where lithium fluoride has entered the Tesla supply chain6869 - Zimbabwe's Bikita Mine has undergone three reserve increases, with LCE resources now reaching 2.8847 million tons, and new projects have reached production capacity, significantly increasing raw material self-sufficiency; the company collectively possesses 66,000 tons/year of battery-grade lithium salt production capacity7073 - The company is a global leader in cesium and rubidium salt fine chemicals, possessing two major high-quality cesium resources at Canada's Tanco and Zimbabwe's Bikita mines, with cesium formate products holding an absolute market share in the global high-temperature and high-pressure oil and gas well market8485 - The company holds 73 mining rights, including 15 mining permits and 44 exploration permits, with rich resource reserves covering various metals such as lithium, cesium, copper, germanium, gallium, and zinc6696 3.3 Core Competitiveness Analysis The company's core competitiveness stems from synergistic advantages across its three business segments, including significant resource and production capacity in lithium, global leadership in rare light metals, and extensive overseas exploration experience in mineral prospecting - Lithium battery business: Possesses two major mine resources in Zimbabwe's Bikita and Canada's Tanco, with a combined beneficiation capacity of 4.18 million tons/year and battery-grade lithium salt capacity of 66,000 tons/year, ensuring high raw material self-sufficiency107108 - Rare light metal business: Controls major high-quality cesium mineral resources globally (Canada's Tanco Mine), possessing significant resource advantages and global pricing power in the cesium salt business111 - Mineral exploration business: As one of China's first "going out" commercial comprehensive geological exploration technical service enterprises, it possesses rich overseas experience, cross-border resource integration capabilities, and technological advantages, demonstrating a clear first-mover advantage in overseas exploration115116117 3.4 Main Business Analysis In 2024, operating revenue decreased by 10.80% to 5.36 billion Yuan and net profit by 65.72% to 757 million Yuan, primarily due to the lithium battery segment's decline, while rare light metals showed strong growth and high profitability, driving the company's multi-metal transformation | Indicator | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (10,000 Yuan) | 536,385.47 | 601,332.41 | -10.80% | | Net Profit Attributable to Shareholders (10,000 Yuan) | 75,697.46 | 220,816.24 | -65.72% | | Total Assets (10,000 Yuan) | 1,719,284.25 | 1,588,483.25 | 8.23% | | By Segment | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin | YoY Operating Revenue Change | YoY Operating Cost Change | YoY Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lithium New Energy | 3,129,280,435.76 | 2,546,472,667.11 | 18.62% | -26.25% | 42.14% | -39.15% | | Rare Light Metals | 1,395,246,555.55 | 302,849,168.05 | 78.29% | 24.16% | -24.33% | 13.91% | - The company's geological exploration advantages facilitate mining rights development, with the acquisition of 65% equity in Zambia's Kitumba Copper Mine project and 98% equity in Namibia's Tsumeb project in 2024, officially entering the strategic metals of copper, germanium, and gallium126129 - The company actively rewards shareholders through dividends and share repurchases and cancellations, distributing 722 million Yuan in cash for 2023 and completing 302 million Yuan in share repurchases and cancellations134135 - Net cash flow from operating activities significantly decreased by 83.34%, primarily due to the price correction of lithium battery materials; cash inflow from investing activities significantly increased by 237.44%, mainly due to the recovery of time deposits; cash inflow from financing activities significantly decreased by 61.95%, mainly because of non-public offering fundraising in the prior year172 3.5 Analysis of Assets and Liabilities As of year-end 2024, total assets reached 17.19 billion Yuan, growing by 8.23%, with increased proportions of fixed and intangible assets due to project capitalization and acquisitions, while monetary funds decreased and short-term borrowings rose | Item | Amount at 2024 Year-End (Yuan) | % of Total Assets | Amount at 2024 Year-Start (Yuan) | % of Total Assets | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 4,084,374,474.63 | 23.76% | 4,915,300,196.12 | 30.94% | -7.18% | | Inventories | 2,142,235,084.28 | 12.46% | 1,444,864,790.98 | 9.10% | 3.36% | | Fixed Assets | 3,133,336,602.85 | 18.22% | 2,177,955,358.83 | 13.71% | 4.51% | | Intangible Assets | 2,430,567,716.12 | 14.14% | 1,852,634,132.41 | 11.66% | 2.48% | | Short-term Borrowings | 1,485,883,353.05 | 8.64% | 913,668,144.58 | 5.75% | 2.89% | - The company has a high proportion of overseas assets, primarily held through Hong Kong subsidiaries, accounting for over 79% of the company's net assets, with no significant impairment risk175 3.6 Investment Status Analysis Total investments in the reporting period were 1.301 billion Yuan, down 24.74%, including strategic equity acquisitions in copper, germanium, and gallium, and significant non-equity investments in lithium salt and lithium mine projects, with hedging activities to mitigate price risks - Major equity investments during the reporting period primarily involved the acquisition of Namibia's Tsumeb Smelter and Zambia's Kitumba Copper Mine, totaling approximately 605 million Yuan, aimed at expanding the multi-metal business layout182 - Major non-equity investment projects, such as Chunpeng Lithium's 35,000 tons/year high-purity lithium salt project, Bikita Lithium Mine's 2 million tons/year construction project, and 1.2 million tons/year expansion project, are progressing as planned, but due to lithium battery market fluctuations, they did not achieve expected returns during the reporting period183185 - The company uses lithium carbonate futures for hedging to mitigate product market price fluctuation risks, incurring an actual loss of 7.7883 million Yuan during the reporting period190 - In 2023, 2.974 billion Yuan was raised through non-public offerings, with 2.798 billion Yuan cumulatively used, reaching a utilization rate of 93.27%, primarily for lithium salt and lithium mine project construction194 3.7 Outlook on Company's Future Development The company's future strategy focuses on "main business foundation, global expansion, multi-polar growth" to build a multi-driven industrial structure encompassing new energy metals, bulk metals, and rare strategic metals, while enhancing competitiveness through innovation and ESG | Business Segment | Strategic Goal | | :--- | :--- | | Lithium New Energy | Maintain industry-leading costs, complete 30,000 tons/year lithium sulfate capacity layout in Africa by 2026 | | Copper Mineral Resources | Complete Kitumba Copper Mine's 60,000 tons/year integrated construction by 2026, achieving over 100,000 tons/year copper capacity within 5 years | | Rare Strategic Metals | Complete Tsumeb multi-metal recovery project's pyrometallurgical construction and Bikita cesium beneficiation plant construction by 2025 | | Mineral Exploration | Actively promote the value conversion of proprietary mining rights, acquiring high-quality resources such as copper, gold, cesium, lithium, and germanium globally | - The company will continue to strengthen technological innovation, promoting the industrial chain towards high-end and green development, currently holding a total of 142 valid patents, including 78 invention patents207208 - The company will optimize and improve its ESG system, establish an ESG Management Department, and has released its first ESG report, firmly committing to a green development path209210 - The company faces major risks including exchange rate fluctuations, market and price volatility, increased environmental protection costs, and geopolitical changes; countermeasures include using stable currency settlements, signing long-term agreements, futures hedging, enhancing environmental standards, and purchasing policy-based credit insurance213214215 Part IV Corporate Governance The company continuously improves its corporate governance structure and internal control system, ensuring compliance with regulations, achieving high ratings for information disclosure, and actively managing investor relations 4.1 Basic Status of Corporate Governance The company adheres to laws and regulations, continuously improving its corporate governance structure and internal control system, with 12 revised or new internal management policies implemented to enhance operational efficiency and compliance, earning an A-grade for information disclosure - During the reporting period, the company revised or added 12 internal policies, including the "Articles of Association," "Working Rules for Independent Directors' Special Meetings," and "Market Value Management System," to adapt to new regulatory requirements and enhance governance levels221 - The company's information disclosure work is standardized, earning an A-grade evaluation for information disclosure from the Shenzhen Stock Exchange for the 2023-2024 period229 - The company actively manages investor relations, organizing 4 earnings calls and publishing 8 investor activity records during the reporting period, covering over 1,000 domestic and international investment institutions230 4.2 Directors, Supervisors, and Senior Management This section details the basic information, tenure, shareholding changes, and compensation of the company's directors, supervisors, and senior management, highlighting their industry expertise and the link between compensation and performance | Name | Position | Total Pre-tax Compensation from Company (10,000 Yuan) | Whether compensated by company's related parties | | :--- | :--- | :--- | :--- | | Wang Pingwei | Chairman, President | 208.00 | No | | Zhang Jinwei | Director, Vice President & Board Secretary | 139.00 | No | | Zhang Xueshu | Vice President | 126.00 | No | | Wang Zhenhua | Vice President | 133.00 | No | | Jiang Yanlong | CFO & Senior Manager of Financial Management Dept. | 105.00 | No | - During the reporting period, Board Secretary Mr. Zhang Jinwei increased his holdings by 10,000 shares, and Vice President Mr. Wang Zhenhua and CFO Mr. Jiang Yanlong increased their shares by 120,000 shares and 156,800 shares respectively through option exercise237238 4.3 Internal Control System Construction and Implementation The company continuously improved its internal control system and strengthened internal audit supervision, maintaining effective internal controls over financial reporting in all material aspects as of December 31, 2024, with no material weaknesses identified, and receiving a standard unqualified audit opinion - The company's internal control evaluation report concluded that as of December 31, 2024, the company maintained effective internal controls over financial reporting in all material aspects, with no material weaknesses identified270272 - Ernst & Young Hua Ming LLP issued a standard unqualified audit report on the effectiveness of the company's internal controls over financial reporting as of December 31, 2024275 Part V Environmental and Social Responsibility The company, including its key subsidiaries, is designated as a major polluter, adhering strictly to environmental regulations, implementing energy-saving and carbon reduction measures, and addressing environmental incidents promptly 5.1 Major Environmental Issues The company and its subsidiaries are designated as key polluting units, strictly complying with environmental laws, with one instance of a 30,000 Yuan fine for a monitoring equipment malfunction, and actively implementing energy-saving and carbon reduction initiatives - The company's domestic subsidiaries Jiangxi Sinomine New Materials and Jiangxi Sinomine Lithium, as well as overseas subsidiaries Bikita, Tanco, and Tsumeb Smelter, are all identified as key polluting units278 - During the reporting period, Jiangxi Sinomine New Materials was fined RMB 30,000 for the abnormal operation of its atmospheric pollutant automatic monitoring equipment; the company immediately replaced the equipment and restored normal operation294 - The company actively implements energy-saving and carbon reduction measures, including establishing a photovoltaic energy storage structure at Bikita Mine, optimizing tailings management at Tanco Mine, and installing energy-saving drive devices at Tsumeb Smelter292293294 Part VI Significant Matters The company completed two major strategic acquisitions in copper, germanium, and gallium, actively returned value to shareholders through dividends and share repurchases, and engaged in significant related-party transactions for transportation services 6.1 Major Asset and Equity Acquisitions During the reporting period, the company completed two major strategic acquisitions: 65% equity in Zambia's Kitumba copper mine for $58.5 million and 98% equity in Namibia's Tsumeb smelter, marking its entry into copper, germanium, and gallium - The company acquired 65% equity in Zambia's Kitumba Copper Mine project for $58.5 million, with plans to invest $563 million in an integrated project to produce 60,000 tons/year of cathode copper334 - The company acquired 98% equity in Namibia's Tsumeb Smelter, gaining tailings resources containing 746.21 tons of germanium, 409.6 tons of gallium, and 209,500 tons of zinc, with plans to invest $223 million in a multi-metal comprehensive recycling project336 6.2 Share Repurchase and Profit Distribution The company actively returned value to shareholders by completing the 2023 profit distribution of 722 million Yuan in cash dividends and canceling 8.32 million repurchased shares totaling 302 million Yuan - Completed 2023 equity distribution, distributing 10 Yuan per 10 shares, totaling 722 million Yuan in cash dividends333 - Completed share repurchase plan, cumulatively repurchasing 8,319,817 shares for a total of 302 million Yuan, all of which were canceled on October 21, 2024337 6.3 Significant Related-Party Transactions Significant related-party transactions during the reporting period primarily involved the procurement of lithium concentrate transportation services from S&S Resources International Co., Limited for 301 million Yuan and Beijing Xiangda Logistics Co., Ltd. for 72.06 million Yuan, both within approved annual limits | Related Party | Related Transaction Content | Amount Incurred This Period (10,000 Yuan) | Approved Transaction Limit (10,000 Yuan) | Exceeded Transaction Limit | | :--- | :--- | :--- | :--- | :--- | | S&S Resources International Co., Limited | Lithium Concentrate Transportation Services | 30,056.13 | 36,250.00 | No | | Beijing Xiangda Logistics Co., Ltd. | Lithium Concentrate Transportation Services | 7,205.90 | 15,000.00 | No | Part VII Share Changes and Shareholder Information The company's total share capital decreased from 728 million to 721 million shares due to share repurchases and cancellations, partially offset by equity incentive exercises, with detailed information on shareholders and actual controllers 7.1 Share Change Status During the reporting period, the company's total share capital decreased from 728 million shares to 721 million shares, primarily due to the cancellation of repurchased shares, partially offset by equity incentive exercises - The company's total share capital changed from 728,431,054 shares at the beginning of the period to 721,491,877 shares at the end, a net decrease of 6,939,177 shares, due to share repurchases and cancellations and equity incentive exercises343344 - Share changes primarily resulted from the cancellation of 8,319,817 repurchased shares and an increase of 1,380,640 shares from stock option exercises344345 7.2 Shareholders and Actual Controllers As of the end of the reporting period, the company had 59,504 common shareholders, with Sinomine Mining Group Co., Ltd. as the controlling shareholder (14.13%), and the actual controllers being seven natural persons acting in concert | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at Period End | | :--- | :--- | :--- | :--- | | Sinomine Mining Group Co., Ltd. | Domestic Non-State-Owned Legal Person | 14.13% | 101,920,000 | | Wei Wei | Domestic Natural Person | 4.23% | 30,522,322 | | HKSCC Nominees Limited | Overseas Legal Person | 1.82% | 13,135,492 | | Sun Meichun | Domestic Natural Person | 1.72% | 12,374,368 | | Postal Savings Bank of China - Oriental New Energy Vehicle Theme Mixed Fund | Other | 1.67% | 12,027,472 | - The company's actual controllers are seven natural persons: Liu Xinguo, Wang Pingwei, Ou Xuegang, Wang Fangmiao, Wei Yunfeng, Wu Zhihua, and Chen Haizhou, who control the company through concerted action359 Part X Financial Report The financial report includes an unqualified audit opinion from Ernst & Young Hua Ming LLP, detailing the company's balance sheet, income statement, and cash flow statement, reflecting asset growth, profit decline, and changes in cash flows 10.1 Audit Report Ernst & Young Hua Ming LLP issued a standard unqualified audit opinion on the company's 2024 financial statements, confirming fair presentation in accordance with accounting standards, with key audit matters being "goodwill impairment" and "revenue recognition" - The audit opinion is a standard unqualified opinion, issued by Ernst & Young Hua Ming LLP369 - Key audit matters are goodwill impairment and revenue recognition; auditors have performed relevant procedures and consider management's treatment reasonable372374 10.2 Financial Statements The financial statements for 2024 show total assets growing to 17.19 billion Yuan, but a decline in net profit to 754 million Yuan, with significant increases in fixed assets, intangible assets, and inventories, and shifts in cash flow activities Consolidated Balance Sheet Key Items (Unit: Yuan) | Item | Period-End Balance | Period-Start Balance | | :--- | :--- | :--- | | Monetary Funds | 4,084,374,474.63 | 4,915,300,196.12 | | Accounts Receivable | 776,364,988.13 | 373,636,622.90 | | Inventories | 2,142,235,084.28 | 1,444,864,790.98 | | Fixed Assets | 3,133,336,602.85 | 2,177,955,358.83 | | Construction in Progress | 588,638,341.78 | 796,606,675.74 | | Intangible Assets | 2,430,567,716.12 | 1,852,634,132.41 | | Goodwill | 1,226,538,018.74 | 1,226,538,018.74 | | Short-term Borrowings | 1,485,883,353.05 | 913,668,144.58 | | Long-term Borrowings | 341,913,530.71 | 553,183,000.00 | | Total Assets | 17,192,842,452.12 | 15,884,832,497.44 | | Total Liabilities | 4,704,787,109.12 | 3,661,359,349.19 | | Total Owners' Equity | 12,488,055,343.00 | 12,223,473,148.25 | Consolidated Income Statement Key Items (Unit: Yuan) | Item | 2024 Annual | 2023 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 5,363,854,702.53 | 6,013,324,070.79 | | Total Operating Cost | 4,519,931,446.61 | 3,650,464,334.49 | | R&D Expenses | 113,351,521.80 | 172,111,720.94 | | Total Profit | 960,252,790.32 | 2,420,200,697.67 | | Net Profit | 753,812,491.93 | 2,202,291,386.32 | | Net Profit Attributable to Parent Company Shareholders | 756,974,637.04 | 2,208,162,354.73 | Consolidated Cash Flow Statement Key Items (Unit: Yuan) | Item | 2024 Annual | 2023 Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 500,018,302.86 | 3,002,095,050.03 | | Net Cash Flow from Investing Activities | -881,033,129.74 | -2,660,735,481.53 | | Net Cash Flow from Financing Activities | -356,944,626.80 | 1,813,003,173.67 | | Net Increase in Cash and Cash Equivalents | -726,686,695.82 | 2,145,535,699.42 |