Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 20% compared to the benchmark index within six months [6][11]. Core Views - The company is projected to achieve a net profit attributable to shareholders of between 5.6 billion to 6.5 billion yuan for the first half of 2025, representing a year-on-year increase of 50.97% to 75.23% [3]. - The company has transitioned from primarily a lead-zinc smelting business to a resource-oriented company focused on mining profitability, with over 85% of total net profit coming from mining operations [5]. - The recovery of zinc smelting processing fees, which have risen from a historical low of 1200 yuan/ton to 3800 yuan/ton, is expected to significantly enhance the company's performance in 2025 [4]. Company Overview - The latest closing price of the company's stock is 11.49 yuan, with a total market capitalization of 123 billion yuan and a circulating market value of 86 billion yuan [2]. - The company has a total share capital of 1.073 billion shares, with a debt-to-asset ratio of 50.8% and a price-to-earnings ratio of 17.41 [2]. Financial Performance - The company reported a net profit of 6.73 billion yuan for Water Mouth Mountain Nonferrous in 2024, a 64% increase from 4.11 billion yuan in 2023 [5]. - The projected net profits for the company from 2025 to 2027 are 12.89 billion yuan, 13.52 billion yuan, and 14.59 billion yuan, respectively, with year-on-year growth rates of 63.83%, 4.93%, and 7.92% [7]. - The company's earnings per share (EPS) are expected to rise from 0.73 yuan in 2024 to 1.36 yuan in 2027, reflecting a strong growth trajectory [9][10].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Report's Core View - For lead, due to no expected increase in lead concentrate imports, stable increase in primary lead production, and high costs and low production in the secondary lead sector, along with the transition from the off - season to the peak season in demand, lead prices are expected to oscillate upwards but with limited upside due to inventory accumulation risks [1]. - For zinc, with sufficient raw material reserves in smelters, improved supply of zinc concentrates, and weak downstream demand, zinc prices have rebounded recently but the upside is limited. Attention should be paid to short - selling opportunities after the disappearance of positive factors [1]. 3. Summary by Relevant Catalogs a. Price and Market Data - **Lead**: SMM1 lead ingot average price was 16,975 yuan/ton, down 0.29%; futures main contract closing price was 17,210 yuan/ton, down 0.49%; LME3 - month lead futures closing price was 2,057 dollars/ton; the ratio of Shanghai - London lead prices was 8.37, down 0.49% [1]. - **Zinc**: SMM1 zinc ingot average price was 22,200 yuan/ton, down 0.63%; futures main contract closing price was 22,090 yuan/ton, down 1.43%; LME3 - month zinc futures closing price was 2,735.5 dollars/ton; the ratio of Shanghai - London zinc prices was 8.08, down 1.43% [1]. b. Inventory - **Lead**: As of July 7, SMM lead ingot five - location inventory was 5.79 million tons, up 0.15 million tons from June 30 and 0.1 million tons from July 3 [1]. - **Zinc**: As of July 7, SMM zinc ingot seven - location inventory was 8.91 million tons, up 0.85 million tons from June 30 and 0.67 million tons from July 3 [1]. c. Production News - The Xinjiang Huoshaoyun 600,000 - ton lead - zinc smelting project, built by China Wuye Group, has been put into production. After reaching full capacity, it can process 2.5 million tons of lead - zinc ore annually, producing 560,000 tons of zinc ingots and 110,000 tons of lead ingots [1]. d. Market Analysis - **Lead**: Lead concentrate imports have no expected increase, processing fees are likely to rise, primary lead production is stable, and secondary lead production is limited by high costs. Demand is transitioning from the off - season to the peak season [1]. - **Zinc**: Zinc smelters have sufficient raw materials, zinc concentrate supply has improved, and downstream demand is weak, mainly for just - in - time replenishment [1].

Report Investment Rating - No investment rating information is provided in the report. Core Viewpoints - For lead, supported by raw materials and the reduced operation rate of secondary lead, the lead price fluctuates upward. However, as the downstream has not entered the peak season, there is still a risk of inventory accumulation, which may limit the continuous upward space of the lead price [1]. - For zinc, due to the warm macro - sentiment and supply - side disturbances, the zinc price has rebounded. But after the rebound, it suppresses the downstream purchasing enthusiasm, leading to inventory accumulation and limited rebound space. Attention should be paid to short - selling opportunities after the elimination of favorable factors [1]. Summary by Relevant Catalogs Lead Market Price and Spread - The average price of SMM1 lead ingots increased by 0.15% to 17,025 yuan/ton, and the closing price of the main futures contract rose by 0.29% to 17,295 yuan/ton. The basis was - 270 yuan/ton, down 25 yuan/ton [1]. - The spread between the near - month and the first - continuous contract of Shanghai lead was - 55 yuan/ton, down 65 yuan/ton; the spread between the first - continuous and the second - continuous contract was - 10 yuan/ton, up 20 yuan/ton; the spread between the second - continuous and the third - continuous contract was 5 yuan/ton, up 5 yuan/ton [1]. Trading Volume and Position - The trading volume of the active futures contract was 24,330 lots, down 29.37%; the open interest was 51,672 lots, down 2.28%; the trading volume to open interest ratio was 0.47, down 27.72% [1]. Inventory - LME lead inventory was 263,275 tons, with no change; Shanghai lead warehouse receipt inventory was 46,439 tons, with no change [1]. Industry Information - From June 28 to July 3, the weekly operation rate of SMM primary lead enterprises was 68.46%, up 2.25 percentage points; that of secondary lead enterprises was 34.8%, up 0.2 percentage points; that of lead - acid battery enterprises was 71.83%, up 3.06 percentage points [1]. - A new 200,000 - ton/year production line of a primary lead smelter in Central China was ignited and put into operation, expected to produce lead ingots next week, with an initial expected daily output increase of 300 tons, and up to 600 tons if raw material supply is guaranteed [1]. Zinc Market Price and Spread - The average price of SMM1 zinc ingots decreased by 0.09% to 22,340 yuan/ton, while the closing price of the main futures contract rose by 0.38% to 22,410 yuan/ton. The basis was - 70 yuan/ton, down 105 yuan/ton [1]. - The spread between the near - month and the first - continuous contract of Shanghai zinc was 30 yuan/ton, down 30 yuan/ton; the spread between the first - continuous and the second - continuous contract was 60 yuan/ton, up 5 yuan/ton; the spread between the second - continuous and the third - continuous contract was 65 yuan/ton, up 5 yuan/ton [1]. Trading Volume and Position - The trading volume of the active futures contract was 153,571 lots, up 15.75%; the open interest was 128,000 lots, up 0.05%; the trading volume to open interest ratio was 1.20, up 15.69% [1]. Inventory - LME zinc inventory was 112,325 tons, with no change; Shanghai zinc warehouse receipt inventory was 7,246 tons, up 9.80% [1]. Industry Information - From June 28 to July 3, the weekly operation rate of galvanizing enterprises was 56.48%, up 0.27 percentage points; that of die - casting zinc alloy enterprises was 49.14%, up 2.6 percentage points; that of zinc oxide enterprises was 56.14%, down 2.58 percentage points [1]. - As of July 3, the zinc ingot inventory in Shanghai Free Trade Zone was 6,000 tons, unchanged from last week [1].

Core Viewpoint - The restructuring of Zhuhai Group has led to significant improvements in its financial performance, with a notable increase in net profit and a diversified business model that now includes precious metals [1][5][4]. Financial Performance - In the first half of 2023, Zhuhai Group expects a net profit attributable to shareholders of between 5.6 billion to 6.5 billion, representing a year-on-year increase of over 50% [1][2]. - The company anticipates a non-recurring net profit of 5.7 billion to 6.6 billion, with a growth rate exceeding 80% compared to the previous year [1][2]. - For the first quarter of 2023, Zhuhai Group reported revenues of 48.03 billion and a net profit of 2.77 billion, reflecting year-on-year growth of 8.5% and 74.07%, respectively [2]. Restructuring Details - The company completed a major asset restructuring costing approximately 39 billion, acquiring 100% of Shuikoushan Co. and 20.83% of Zhuhai Nonferrous Metals [3][4]. - The restructuring has allowed Zhuhai Group to expand its operations beyond zinc and zinc alloy production to include precious metals, enhancing its market position [5][4]. Operational Efficiency - The restructuring has activated the entire industry chain of Zhuhai Group, improving its operational efficiency and cost control [5][6]. - The company has developed a comprehensive industrial chain, including mining, smelting, and sales of non-ferrous metals, with significant production capacities in zinc and lead [6]. Financial Health - The asset-liability ratio of Zhuhai Group has significantly decreased from 84% at the end of 2022 to approximately 52% by the end of the first quarter of 2023 [1][7]. - The net cash flow from operations has shown consistent growth, with projections of 6.36 billion, 6.90 billion, and 11.07 billion for the years 2022 to 2024, respectively [7]. Market Position - Zhuhai Group has established strategic partnerships with major clients such as China Baowu and Shougang Group, positioning itself as a leader in the high-end automotive board industry [6].

Summary of Key Points Core Viewpoint - The company, Henan Yuguang Gold Lead Co., Ltd., is providing guarantees to its controlling shareholder, Henan Yuguang Gold Lead Group Co., Ltd., as part of a mutual guarantee framework to support financing needs and enhance overall financing efficiency [1][6]. Group 1: Guarantee Overview - The mutual guarantee framework agreement allows Yuguang Group and its subsidiaries to provide guarantees totaling 8 billion yuan to the company, while the company will provide guarantees of 2.5 billion yuan to Yuguang Group [1]. - The specific guarantee for Yuguang Group's credit business at Huaxia Bank is set at 50 million yuan [1]. Group 2: Internal Decision-Making Process - The company’s board of directors held a special meeting to review the guarantee, with all independent directors agreeing that the risks are controllable and do not harm the interests of the company and its shareholders [2]. - The board approved the guarantee with a vote of 4 in favor and no opposition, and the matter will be submitted to the upcoming extraordinary general meeting of shareholders for further approval [2][6]. Group 3: Financial and Corporate Information - As of March 31, 2025, the company reported total assets of approximately 30.28 billion yuan and net assets of approximately 6.33 billion yuan [4]. - The company’s total revenue for the first quarter of 2025 was approximately 15.13 billion yuan, with a net profit of approximately 248.69 million yuan [5]. Group 4: Necessity and Reasonableness of the Guarantee - The guarantee is deemed necessary and reasonable as it enhances the company's financing capabilities and efficiency, with Yuguang Group having a good credit status and no significant overdue debts [5][6]. Group 5: Regulatory Compliance - The guarantee has undergone necessary internal approval processes and complies with relevant laws and regulations, ensuring no harm to the interests of shareholders, particularly minority shareholders [7].

Group 1 - The company, Henan Yuguang Gold Lead Co., Ltd., is issuing convertible bonds to unspecified investors, with a total issuance scale of RMB 710 million [4][6] - The bonds, named "Yuguang Convertible Bonds" (code: 110096), have a maturity period of 6 years, from August 12, 2024, to August 11, 2030 [2][4] - The interest rates for the bonds are set at 0.10% for the first year, 0.30% for the second year, and 0.60% for the third year, with annual interest payments [3][4] Group 2 - The initial conversion price for the bonds is set at RMB 6.17 per share, which will be adjusted to RMB 5.95 per share due to a cash dividend distribution of RMB 0.225 per share [6][9] - The conversion period for the bonds will start on February 16, 2025, and end on August 11, 2030 [5][11] - The company has received a credit rating of AA for the bonds, with a stable outlook [6][7] Group 3 - The company has approved a profit distribution plan for 2024, amounting to RMB 245.31 million, which will impact the bond conversion price [6][7] - The company has decided to cancel its supervisory board and amend its articles of association to enhance corporate governance [7][8]

Core Points - The independent directors of Henan Yuguang Gold Lead Co., Ltd. held their fourth special meeting of the ninth board on July 3, 2025, via communication methods, with all three independent directors present, confirming the meeting's legality and compliance with relevant regulations [1] - The company plans to sign purchase contracts for lead slag and copper slag with the related party Gansu Baohui Industrial Group Co., Ltd., which is deemed necessary for normal production operations and compliant with national laws and regulations [1] - The independent directors reviewed the related transactions, confirming they adhere to principles of fairness and market pricing, ensuring no harm to the company or shareholders, particularly minority shareholders [1] - The independent directors agreed to submit the related party transactions to the board for approval, with related directors required to abstain from voting [1] - The independent directors also approved a related guarantee for the controlling shareholder, stating that the risk is controllable and does not harm the interests of the company or its shareholders, and agreed to submit this matter to the board for review [2]

Meeting Information - The third extraordinary general meeting of shareholders for 2025 will be held on July 23, 2025, at 14:30 [1][3] - The meeting will take place at the conference room 510 of Henan Yuguang Gold Lead Co., Ltd. located in Jiyuan City, Henan Province [1] - Voting will be conducted through a combination of on-site and online methods using the Shanghai Stock Exchange's online voting system [1][3] Voting Procedures - Shareholders can vote via the Shanghai Stock Exchange's online voting system from 9:15 to 15:00 on the day of the meeting [1][3] - Specific voting times include trading hours: 9:15-9:25, 9:30-11:30, and 13:00-15:00 [1] - Shareholders holding multiple accounts can exercise voting rights across all accounts, but repeated votes will be counted based on the first submission [4][2] Meeting Agenda - The meeting will review non-cumulative voting proposals that have been approved by the company's ninth board of directors [2] - The related party that must abstain from voting is Henan Yuguang Gold Lead Group Co., Ltd. [2] Attendance Requirements - Shareholders registered by the close of trading on the equity registration date of July 17, 2025, are eligible to attend the meeting [4] - Attendance can be in person or by proxy, with specific documentation required for both shareholders and their proxies [4][5] Registration Process - Shareholders must register for the meeting in advance, either in person or via fax, on July 22, 2025 [4][5] - Required documents include personal identification and shareholder account information [4][5]

Core Points - The company is established as a joint-stock company in accordance with the Company Law and other relevant regulations [2][3] - The company aims to promote the development of the lead smelting industry and contribute to social prosperity and stability [5] - The company has a registered capital of RMB 1,090,242,634 [3][4] Chapter Summaries Chapter 1: General Provisions - The company is committed to protecting the legal rights of shareholders, employees, and creditors [1] - The company is a permanent joint-stock company [4] Chapter 2: Business Objectives and Scope - The company's business objectives include ensuring the safety and appreciation of shareholder investments [5] - The company engages in various activities including non-ferrous metal smelting, chemical product sales, and technology services [5] Chapter 3: Party Building Work - The company has established a Communist Party organization to strengthen party leadership and construction [7] - The party organization plays a core leadership role within the company [3] Chapter 4: Shares - The company issues ordinary shares, with all shares having equal rights [11] - The total number of shares issued by the company is 1,090,242,634 [11] Chapter 5: Shareholders and Shareholders' Meeting - Shareholders have rights to dividends, voting, and supervision of company operations [17] - The company must hold annual and temporary shareholders' meetings as required [26][27]

Core Points - The company has established a management system for accountability regarding significant errors in annual report information disclosure to enhance operational standards and improve the quality and transparency of disclosures [2][3] - The system outlines the responsibilities of personnel involved in the annual report process, emphasizing adherence to accounting standards and internal controls to ensure accurate financial reporting [2][3] - The criteria for identifying significant errors in annual report disclosures include major accounting errors, significant omissions, and discrepancies between performance forecasts and actual results [4][5] Summary by Sections General Principles - The purpose of the system is to increase accountability for annual report disclosures and ensure the authenticity, accuracy, completeness, and timeliness of information [2] - Relevant personnel must comply with accounting standards and internal controls to ensure fair representation of the company's financial status [2][3] Identification and Handling of Significant Accounting Errors - Significant accounting errors are defined by specific thresholds, such as errors affecting total assets, net assets, revenue, and profit by more than 5% or exceeding certain absolute amounts [4] - Corrections to previously published financial reports require auditing by qualified accounting firms [4][5] Identification and Handling of Other Significant Disclosure Errors - Other significant errors include omissions of major accounting policies, guarantees provided to shareholders, and significant lawsuits or contracts affecting net assets by over 10% [5][6] - Discrepancies in performance forecasts and actual results are also considered significant errors if they exceed 50% of the expected range [6] Accountability for Disclosure Errors - The system stipulates that directors and senior management are accountable for providing false or incomplete information, with penalties ranging from reprimands to termination based on the severity of the error [7][8] - The company’s financial department must provide accurate financial data and cooperate with audits to prevent significant disclosure errors [7][8] Additional Provisions - The system allows for varying degrees of penalties based on the circumstances of the error, including potential economic penalties determined by the board [8][9] - The board is responsible for interpreting and revising the system, which takes effect upon approval [9]