Core Viewpoint - The company reported a decline in performance for the first half of 2025, with revenue and net profit falling significantly compared to the previous year, primarily due to fluctuations in natural uranium prices and increased operational costs [1][2]. Company Performance - In the first half of 2025, the company achieved a revenue of HKD 1.709 billion, a year-on-year decrease of 58% [1]. - The net profit attributable to shareholders was a loss of HKD 68 million, representing a year-on-year decline of 160% [1]. - The main reasons for the loss included high unit sales costs in the natural uranium sales business and a decrease in investment income due to falling uranium prices [1]. Operational Costs - The operational costs for mining significantly increased, with raw material prices, such as sulfur, rising by 24% year-on-year [1]. - The underground resource usage tax in Kazakhstan increased from 6% to 9%, contributing to higher unit costs [1]. - The company's mining sales costs rose by 6% year-on-year, reaching USD 27.9 per pound due to inflation and a 5% increase in labor costs [1]. Market Trends - The global natural uranium market continued to show volatility, with an increase in procurement willingness among nuclear power owners, raising their share of total spot trading volume from 16% in 2024 to approximately 35% [2]. - The long-term trading market faced slow contract signing due to macroeconomic uncertainties and trade policy adjustments [2]. - The supply-demand relationship remained tight in the first half of 2025, influenced by production changes and procurement rhythms, while long-term support is expected from nuclear power expansion and global energy transition [2]. Industry Developments - Kazatomprom announced a production reduction strategy for 2026, planning to cut its nominal production by about 10%, which is expected to support uranium prices [2][3]. - The upcoming World Nuclear Association (WNA) conference in September is anticipated to be a significant catalyst for the industry, potentially refocusing attention on the strategic role of nuclear energy in the energy transition [3]. Profit Forecast - The company, as the only pure uranium listed company in East Asia backed by China General Nuclear Power Group, has revised its net profit forecasts for 2025, 2026, and 2027 to HKD 382 million, HKD 939 million, and HKD 1.181 billion, respectively, reflecting year-on-year growth of 11.7%, 145.9%, and 25.7% [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The report highlights that the uranium market experienced increased volatility in the first half of 2025, with rising costs and low-price contract deliveries suppressing the company's performance [5][7] - The company reported a significant decline in revenue and net profit for the first half of 2025, primarily due to fluctuations in international uranium trade contract prices and increased operational costs [7] - The report anticipates a recovery in uranium prices driven by production cuts from leading companies and upcoming industry events that may refocus attention on the strategic role of nuclear energy in the energy transition [7] Financial Performance and Forecast - The company achieved a revenue of 7,363.12 million HKD in 2023, with a projected increase to 9,112.95 million HKD in 2025, reflecting a growth rate of 5.7% [6] - The net profit forecast for 2025 is adjusted to 381.94 million HKD, with a year-on-year growth of 11.7% [6][7] - The earnings per share (EPS) is expected to remain stable at 0.05 HKD for 2025, with a projected increase to 0.12 HKD by 2026 [6][7] - The report indicates a return on equity (ROE) of 8.9% for 2025, improving to 17.9% by 2026 [6] Market Dynamics - The global uranium market is characterized by a tight supply-demand balance, with increased procurement activity from nuclear power owners leading to a 24% growth in spot trading volume [7] - The report notes that major nuclear countries are accelerating their nuclear energy supply chain strategies, which may support long-term uranium price stability [7] - The upcoming World Nuclear Association conference is expected to act as a catalyst for the industry, emphasizing the importance of uranium resources in the next decade [7]