Zangge Mining Company (000408) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 1.76 billion, down 37% year-over-year, with net profit attributable to shareholders at RMB 1.30 billion, down 36%.

• Declines driven by lower potassium chloride and lithium carbonate prices and reduced potassium chloride sales volume.

• Potassium chloride and lithium carbonate remain core businesses, with ongoing resource development and project advancement.

• Cash dividend of RMB 2.60 per 10 shares proposed, totaling RMB 408 million.

Financial highlights

• Operating income: RMB 1.76 billion, down 37% year-over-year.

• Net profit attributable to shareholders: RMB 1.30 billion, down 36% year-over-year.

• Basic and diluted EPS: RMB 0.8258, down 36% year-over-year.

• Operating cash flow: RMB 352 million, down 73% year-over-year.

• Gross margin: 49% for manufacturing, potassium chloride margin 48.28%, lithium carbonate margin 50.28%.

Outlook and guidance

• Potassium chloride contract price for 2024 set at $273/ton, providing price floor for H2.

• Potassium chloride demand expected to rise in autumn/winter, supporting prices.

• Lithium carbonate market remains oversupplied, but demand from EV and energy storage sectors is expected to drive long-term growth.

• Company will continue to focus on resource development and cost control.