Recently, Jinchuan Intl (2362.HK) released its 2024 interim performance and held a roadshow to showcase the company's operating and financial conditions in the first half of this year to the market and investors.

Overall, in the face of the global economic fluctuations and changes in market expectations, Jinchuan Intl achieved a significant improvement in profitability in the first half of the year through optimized operation and cost control.

Net losses turned into profits, and profitability significantly improved.

The financial report shows that the company achieved revenue of 0.283 billion USD in the first half of 2024; with a net profit of approximately 12.78 million USD, successfully turning losses into profits, demonstrating the company's strong risk resistance in the face of market challenges.

This is mainly due to its keen grasp of market dynamics and flexible response strategy. Against the backdrop of a slight decrease in total revenue, the company achieved a significant increase in average selling prices through continuous optimization of production structure and cost control strategy, reflecting not only the high added value of its products, but also its strong market competitiveness.

Jinchuan Intl's turnaround in profitability is mainly attributed to the rise in copper prices, effective cost control, and improved internal management efficiency. The company accurately seized market opportunities, reduced costs significantly, and enhanced profitability by optimizing its product structure and improving production efficiency.

Main business continues to grow, with enormous potential in the new energy sector.

Jinchuan Intl's main business covers the exploration, mining, processing, and sales of new energy upstream materials such as copper and cobalt. With abundant resource reserves and advanced mining technology, the company occupies a significant position in the global nonferrous metals market.

In the first half of the year, the company's mining projects in the Democratic Republic of Congo and Zambia performed exceptionally well. Particularly, core mines such as Kisenda and Luwasi, with their high grade and stable production capacity, provided solid performance support for the company.

In addition, with the rapid development of the global new energy industry, the demand for key raw materials such as copper and cobalt continues to grow. Jinchuan International is keeping up with market trends by increasing research and development investment and capacity expansion in the field of new energy materials, laying a solid foundation for future performance growth.

The company's management team stated that it will continue to expand its presence in the field of new energy materials to meet the growing market demand.

While pursuing economic benefits, Jinchuan International also attaches great importance to environmental protection and social responsibility. The company has made significant progress in ESG (environmental, social, and governance) management, not only enhancing its brand image and market competitiveness, but also laying a solid foundation for the company's sustainable development.

Looking ahead, Jinchuan International will continue to uphold the concept of sustainable development and increase investment and research and development efforts in the field of new energy materials. Through technological innovation and the implementation of an international strategy, the company is expected to play a more important role in the global new energy industry, creating greater value returns for shareholders.

The following is the information from the Q&A session between market investors and the company's management:

Q1: In the first half of 2024, the company achieved a turnaround from loss to profit, mainly due to the rise in copper prices and the reduction in production costs. May I ask if the management believes that this performance growth is sustainable, and how will the company ensure future profitability?

A1:

It is indeed unpredictable to expect continuous performance growth, as market conditions fluctuate. However, the management believes that the development of the new energy industry will greatly drive the demand for copper, especially in the clean energy fields such as electric vehicles, wind power, and photovoltaics. At the same time, the global tight supply of copper mines also supports the expectation of rising copper prices. In terms of cost control, the company reduces costs and improves production efficiency through optimizing mining strategies, reducing production of low-efficiency products, and exploring photovoltaic power generation. These measures will help ensure future profitability.

Q2: Does the company have any other plans for technological innovation and R&D investment to improve production efficiency and reduce costs?

A2:

The company has already taken a series of measures to improve production efficiency and reduce costs, including optimizing mining strategies, adjusting production plans to reduce production of low-efficiency products, and exploring new energy solutions such as photovoltaic power generation to lower electricity costs. In addition, the company has built a 0.6 million-ton magnetic separation plant and flotation plant, which can adopt different processing methods for different types of ores to further enhance resource utilization efficiency and reduce costs. In the future, the company will continue to increase technological innovation and R&D investment to continuously improve competitiveness.

Q3: Does the current progress of the Musonoi project meet the current expectations? When will the project start generating positive income for the company?

A3:

The progress of the Musonoi project is basically in line with expectations. The company originally planned to only carry out Phase I ore selection projects, and is now constructing the deep processing part of Phase II. The project is expected to start production in early next year, bringing significant copper production and revenue to the company. The management is optimistic about the progress of the project and believes that it will start production on time and generate positive income for the company.

Q4: The company did not declare any interim dividends in the first half of 2024. Does the management have plans to increase shareholder returns through dividends or other means in the future?

A4:

The distribution policy of company dividends usually depends on the annual performance. In Hong Kong, most listed companies tend to distribute dividends when the annual performance is announced. As a mining company, the company's dividend policy may not be as stable as some companies that pay dividends continuously. The management has stated that it will consider the dividend policy based on the company's performance and capital needs in the future, but overall, the company has been committed to improving shareholder returns throughout the year.

Q5: What measures did the company take in terms of exchange rate risk management mentioned in the financial report, especially in the case of expectations of interest rate cuts by the Federal Reserve, and how will the company deal with possible exchange rate fluctuations?

A5:

The company mainly adopts a strategy of locking in exchange rates in terms of exchange rate risk management. As the company's product sales and revenue are mainly denominated in US dollars, exchange rate fluctuations have a relatively small impact on the company. However, the company still closely monitors exchange rate movements and takes corresponding measures to reduce exchange rate risk. For example, the company locks in exchange rates through the use of financial instruments to reduce the impact of exchange rate fluctuations on the company's financial performance. In the case of expectations of interest rate cuts by the Federal Reserve, the company will continue to monitor market dynamics and flexibly adjust its exchange rate risk management strategy to deal with possible exchange rate fluctuations.