Summary of Chihong Zn & Ge Co., Ltd. Conference Call Company Overview - Chihong Zn & Ge reported a revenue of 10.58 billion yuan for the first half of 2025, a year-on-year increase of 7.67% [1] - Net profit attributable to shareholders was 932 million yuan, up 3.27% year-on-year [1] - Operating cash flow reached 2.158 billion yuan, reflecting a significant increase of 34.73% [1] - The company's debt-to-asset ratio decreased to 26.44%, positioning it among the leaders in the non-ferrous metal industry [1] Production Capacity and Mining Operations - The company operates six active mines with a total lead-zinc metal production capacity of 420,000 tons per year and smelting capacity of 630,000 tons per year [2] - The lead-zinc resource reserves exceed 32 million tons [2] - The company plans to increase zinc alloy production capacity to 220,000 tons per year starting from the end of 2024 [2] - The company has invested in technological upgrades, increasing the smelting capacity in Hohhot to 300,000 tons [1][4] Financial Performance - The company achieved a mining recovery rate improvement, with smelting costs for new products decreasing by 27.85% year-on-year [1][10] - Four smelting enterprises under the company reported profitability in the first half of 2025 [10] - The company implemented a dividend of 657 million yuan for 2024 and announced a mid-year dividend plan for 2025, distributing 0.3 yuan per share [1][15] Strategic Initiatives - Chihong Zn & Ge is focusing on digital and green transformation, investing 281 million yuan in safety and environmental protection [1][14] - The company has established a joint venture with Chalco and others to create a high-value rare metal industry chain platform [4][33] - The company is committed to high shareholder returns, with a total dividend payout ratio of 68.19% [15] Technological and Environmental Innovations - The company has developed a comprehensive resource utilization and technological innovation strategy, focusing on clean production and recycling [5] - The ESG report has been rated A for four consecutive years, reflecting the company's commitment to environmental, social, and governance standards [14] Future Outlook and Expansion Plans - The company does not plan to build new smelting facilities but will enhance existing production processes based on market demand [16] - The focus will be on increasing the production ratio of zinc alloys, which contribute higher profits compared to traditional zinc products [17] - The company aims to optimize its mining operations and enhance production efficiency through smart mining initiatives [32] Challenges and Market Conditions - The company faced a decline in new product output due to maintenance activities, with a 6.98% year-on-year decrease in emerging product production [10] - Mining costs have slightly increased due to project construction and reduced high-grade ore production [26] Share Buyback and Market Management - In July 2025, the company completed a share buyback of 5.091 million shares, representing 1% of total shares [3][27] - The company has a dividend policy aiming for an average payout ratio of no less than 40% over the next three years [28] Conclusion Chihong Zn & Ge Co., Ltd. is positioned for steady growth with a focus on operational efficiency, shareholder returns, and sustainable practices. The company is leveraging technological advancements and strategic partnerships to enhance its market position in the non-ferrous metal industry.