Investment Rating - The investment rating for the company is maintained at "Buy" with a target price of RMB 38.60 [1][4]. Core Views - The company reported a revenue of RMB 1.1 billion for the first half of 2025, representing a year-on-year increase of 31%, while the net profit attributable to shareholders was RMB 440 million, up 0.6% year-on-year [1]. - The average price of titanium ore in the first half of 2025 decreased by 6.8% to RMB 1,944 per ton, impacting the gross margin of the titanium ore business [2]. - The company has completed the acquisition of 100% equity in Panzhihua's titanium ore assets, enhancing its competitive position in the titanium ore sector [3]. Financial Performance - For the first half of 2025, the company achieved a gross profit margin of 60.1%, down 7.8 percentage points year-on-year, with a net profit margin of 50.45% [2][4]. - The forecasted net profit for 2025-2027 is adjusted to RMB 910 million, RMB 1.064 billion, and RMB 1.139 billion respectively, reflecting a downward revision of 11% for 2025 and 2026 [4][8]. - The earnings per share (EPS) for 2025 is projected at RMB 1.93, with a price-to-earnings (P/E) ratio of 17x for 2025 and 20x for 2026 [4][8]. Market Conditions - The demand for titanium ore is currently under pressure, with downstream demand for titanium dioxide also facing challenges [3]. - Despite short-term pressures, the long-term outlook for titanium ore is positive due to a decrease in global exploration capital expenditure and a scarcity of high-grade ore resources [3].

Core Viewpoint - The company is positioned to benefit from the development of the Yarlung Tsangpo River hydropower station, which may positively impact its titanium ore and energy titanium projects [1] Company Insights - The company is located in Panzhihua, an area that is part of the Western Development strategy, indicating potential regional advantages [1] - Titanium materials have a wide range of applications in industries such as petrochemicals, energy, marine engineering, consumer goods, construction, and high-end equipment manufacturing [1] - Vanadium-titanium iron concentrate is a key raw material for vanadium-titanium steel enterprises in the vanadium extraction process [1] Strategic Focus - The company will continue to focus on market expansion for its products and actively seize national strategic opportunities [1]

Investment Rating - The report maintains an "Overweight" rating for the company [7] Core Views - The completion of the acquisition of Jingzhi Minerals for 6.51 billion RMB strengthens the company's position in the titanium ore sector [1][2] - The acquisition includes high-quality titanium iron ore resources, with a total ore resource of 113 million tons and TiO2 content of 10.66 million tons [2] - The company plans to implement a collaborative mining scheme to maximize resource utilization and minimize waste [3] Summary by Sections Acquisition Details - The company has completed the acquisition of 100% equity in Jingzhi Minerals and its subsidiaries for 6.51 billion RMB [2] - Jingzhi Minerals' main asset is the mining rights for the Xiaohongjing titanium iron mine, which has an ore resource of 113 million tons and TiO2 content of 10.66 million tons [2] Resource Assessment - The iron content in the mining area ranges from 15% to 46%, with TiO2 content between 6.4% and 17.4%, indicating a favorable resource endowment [2] - The company currently holds mining rights for 2.6 million tons/year of industrial iron ore and has applied for an additional 2.4 million tons/year of low-grade iron ore mining rights [2] Production Capacity and Synergies - The company’s existing mining operations will benefit from the acquisition, with a total ore resource increasing by 45% post-acquisition [3] - The company aims to utilize existing facilities from Jingzhi Minerals to accelerate production recovery [3] Market Conditions and Price Trends - As of July 21, the average market price for titanium concentrate is 1715 RMB/ton, reflecting a decrease of 13% since the beginning of the year [4] - Despite the price drop, the company’s high-quality titanium iron ore resources are expected to support its profit margins [4] Financial Projections - The company forecasts net profits of 1.03 billion RMB, 1.20 billion RMB, and 1.29 billion RMB for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 20.4%, 17.1%, and 7.6% [5] - The target price for the company is set at 36.89 RMB, reflecting a 17x PE ratio for 2025 [5]