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On October 24th, Caishen News (Reporter Liang Xiangcai) reported that due to the rise in lead and zinc prices, Jin Hui Shares (603132.SH) achieved a net income growth of more than 40% in the first three quarters of this year. At the same time, after reducing nearly half of the raised funds for the IPO investment project, it will be delayed for one year to reach the designated usable state.

After the market closed today, Jin Hui Shares announced that in the first three quarters of this year, the company achieved revenue of 1.102 billion yuan, a year-on-year growth of 30.64%; net income attributable to shareholders of the listed company was 0.35 billion yuan, a year-on-year increase of 43.15%; continuing the good momentum of a net income growth of over 40% in the first half of the year.

Regarding the reasons for the performance growth, Jin Hui Shares mentioned in the third quarter report that it was mainly influenced by the rise in lead and zinc prices.

Since the beginning of this year, the rise in lead and zinc prices has been triggered by factors such as the tightening of supply at the upstream mining end, leading to a continuous decline in the smelting cost TC at the lead and zinc smelting end, causing losses at the smelting plants (excluding by-products), and the upstream mining end has cut off the largest 'cake' in the industrial chain.

Of note, today Jin Hui Shares also disclosed that its IPO investment project, the 'Jin Hui Mining Co., Ltd. Huixian Guojia Gou Lead-Zinc Mine Green Mine Upgrade Project' (referred to as Guojia Gou project), will be delayed by one year to achieve the designated usable state.

The company stated that as of September 30, 2024, the Guojia Gou project has completed the main upgrade and renovation work. However, affected by various factors, some project construction progress has been delayed compared to the original plan, and the target usable state (or the use of funds) has been postponed from December 2024 to December 2025.

The company stated that, in order to ensure that production operations are not affected, some underground lifting transformation projects need to be constructed during shutdown maintenance; some intelligent upgrading projects are limited by the progress of industrial internet infrastructure construction and also need to be customized according to the mine's production process, operation flow, and control mode, requiring a long period for the development, optimization, and training of management software and platforms.

In fact, there were signs that the Guojia Gou project did not progress as expected. In November 2023, the company announced a reduction of the planned investment for the project from 0.471 billion yuan to 0.241 billion yuan.

As for the reason for the reduction of the investment capital, the company stated at the time that the intelligent mining construction standards in Gansu Province had not been introduced, and due to limitations such as underground 5G construction based on the overall plan, combined with the actual production operation situation to organize the implementation of foundational special network construction, other intelligent constructions could only be in the trial phase, unable to achieve safe and reliable operation underground. Continuing the implementation would not achieve the economic benefits of the investment projects, making it difficult to create greater value for shareholders.

In February 2022, Jin Hui Co., Ltd. mentioned in its prospectus that the Guojia Gou project had a total planned investment of approximately 0.606 billion yuan (including about 0.471 billion yuan of funds to be raised). After the implementation of the project, by increasing the metal recovery rate, there would be an annual additional amount of 2075.89 tons of zinc metal, 524.19 tons of lead metal, and 639.9 kilograms of silver metal. Calculations show that after the implementation of the project, the average annual revenue would increase by 33.8287 million yuan, cost decrease by 29.9212 million yuan, and average annual net income increase by 53.0532 million yuan.