Investment Rating - The investment rating for the company is "Accumulate" [7] Core Views - The company's performance in the second quarter was significantly impacted by declining lithium prices and ongoing losses at the Tsumeb smelter, but the long-term outlook remains positive [1][4] - The lithium and cesium rubidium segments together account for 62% of the company's revenue, indicating their importance to the overall business [3] - The company is expected to recover in the medium to long term, with anticipated improvements in lithium prices and operational efficiencies at the Tsumeb smelter [4][5] Summary by Sections Performance Overview - In the first half of 2025, the company achieved revenue of 3.267 billion yuan, a year-on-year increase of 34.89%, with Q2 revenue of 1.730 billion yuan, up 33.6% year-on-year and 12.62% quarter-on-quarter [1] - The net profit attributable to shareholders for the first half of 2025 was 89 million yuan, down 81.16% year-on-year, primarily due to the decline in lithium prices and a loss of 205 million yuan from the Tsumeb smelter [1] Production and Sales - The company's lithium salt production capacity is set to increase to 71,000 tons, with lithium concentrate capacity at 4.18 million tons [2] - In the first half of 2025, the company sold 17,869 tons of lithium salt, a 6.37% increase year-on-year, and directly sold 34,834 tons of lithium spodumene concentrate [2] Profitability Analysis - The gross margin for the company in the first half of 2025 was 17.96%, a decrease of 23.66 percentage points year-on-year, mainly due to falling lithium prices and losses from the Tsumeb smelter [4] - The gross margin for the lithium segment was 10.89%, down 24.66 percentage points year-on-year, with lithium carbonate prices dropping to a low of 59,100 yuan [4] Future Outlook - The company maintains a multi-metal platform development strategy, with expectations for net profits of 375 million yuan, 779 million yuan, and 1.027 billion yuan for 2025, 2026, and 2027 respectively [5] - The report suggests a long-term perspective on the company, with a maintained "Accumulate" rating due to potential recovery in the lithium segment and overall market conditions [5]

Performance Summary - In 2024, the company achieved revenue of 5.364 billion yuan, a year-on-year decrease of 10.8%, primarily due to the decline in lithium prices [1] - For Q1 2025, revenue was 1.536 billion yuan, a quarter-on-quarter decrease of 14.38% but a year-on-year increase of 36.37%, driven by significant growth in cesium and rubidium salt business [1] - The net profit attributable to shareholders for 2024 was 757 million yuan, down 65.72% year-on-year; in Q1 2025, the net profit was 135 million yuan, a quarter-on-quarter decrease of 36.19%, with a loss of 100 million yuan from the Tsumeb smelter [1] Lithium and Cesium Sales - In 2024, lithium salt production doubled, with output and sales reaching 43,732 tons and 42,649 tons respectively, up 138% and 145% year-on-year; cesium salt production remained stable at 960 tons, while formic cesium sales decreased by 21% to 2,320 bbl [2] - The average selling price of lithium salt in 2024 was 73,400 yuan/ton, a decrease of 70% year-on-year; the average price of cesium salt was 862,600 yuan/ton, an increase of 22%, with formic cesium averaging 287,500 yuan/bbl, up 102% [2] - In Q1 2025, lithium salt sales were 8,964 tons, a year-on-year increase of 13%, while cesium salt sales surged by 78% to 265 dry tons; the average spot price of lithium carbonate was 75,800 yuan/ton, down 1% year-on-year [2] Business Synergy - The company owns lithium mines in Zimbabwe (Bikita) and Canada (Tanco), with a total processing capacity of 4.18 million tons/year; in 2024, lithium salt sales reached 42,600 tons, with self-sourced mines contributing 39,500 tons, achieving a self-sufficiency rate of 93% [3] - Lithium business generated revenue of 3.1 billion yuan in 2024, accounting for 58% of total revenue, down 13 percentage points year-on-year, with a gross profit of 583 million yuan, representing 33% of total gross profit, down 41 percentage points year-on-year [3] - The cesium and rubidium salt segment, as a global leader, achieved revenue of 1.4 billion yuan in 2024, up 7% year-on-year, accounting for 26% of total revenue, with a gross profit of 1.1 billion yuan, up 40 percentage points year-on-year, and a gross margin of 64% [3] Smelting Business - In Q1 2025, the Tsumeb smelter in Namibia incurred a net profit loss of 100 million yuan, impacting short-term performance; however, the company has implemented cost reduction and efficiency improvement measures to restore profitability [4] - The historical low of lithium prices has positioned the cesium and rubidium business as a stabilizing factor for profitability; in 2024, the overall gross margin was 33%, down 22 percentage points year-on-year, while the cesium and rubidium business gross margin improved to 78%, up 14 percentage points [4] - In Q1 2025, the gross margin was 22%, down 5% quarter-on-quarter, while the cesium and rubidium business achieved a gross margin of 67%, significantly supporting the company's profitability during the lithium price decline [4] Investment Outlook - The company is strategically positioned in cesium, rubidium, lithium, and copper sectors, gradually implementing a multi-metal platform development strategy; this diversified approach is expected to solidify the company's fundamentals and enhance performance elasticity amid declining lithium prices [4] - The company has notable advantages in exploration and management, which are expected to lead to continuous cost reductions; projected net profits for 2025-2027 are 642 million, 1.063 billion, and 1.840 billion yuan respectively [4]