Investment Rating - The investment rating for the company is "Outperform the Market" [3][5][31] Core Views - The company achieved a slight year-on-year increase of 3.3% in net profit attributable to shareholders in H1 2025, with total revenue reaching 10.6 billion yuan, up 7.7% [1][6] - The company is the largest producer of germanium globally, with a production capacity of 60 tons per year, which accounts for one-fourth of global output and one-third of domestic output. If germanium prices remain high, the company will benefit significantly [2][7] - The company plans to optimize production organization in the second half of the year to ensure stable and efficient production of its smelting systems [1][6] Financial Performance - In H1 2025, the company reported a net profit of 930 million yuan, with a net cash flow from operating activities of 2.16 billion yuan, reflecting a 34.7% increase [1][6] - The company’s lead and zinc concentrate production was 151,600 tons, a year-on-year increase of 2.29%, while smelting production decreased by 6.98% to 329,200 tons due to annual maintenance [1][6] - The forecast for net profit attributable to shareholders for 2025-2027 is 1.754 billion, 1.921 billion, and 2.003 billion yuan, respectively, with expected growth rates of 35.7%, 9.5%, and 4.2% [3][29] Price and Cost Factors - The zinc price in H1 2025 was 23,312 yuan per ton, an increase of 1,092 yuan per ton year-on-year, contributing approximately 270 million yuan to profits [2][7] - The processing fee for zinc smelting decreased by 352 yuan per ton year-on-year, leading to a reduction in profits by about 100 million yuan [2][7] Valuation Metrics - The current price-to-earnings (P/E) ratio is projected to be 17.4, 15.9, and 15.3 for the years 2025, 2026, and 2027, respectively [3][29] - The estimated earnings per share (EPS) for 2025, 2026, and 2027 are 0.34, 0.38, and 0.39 yuan, respectively [3][29]