Zangge Mining: Shareholder Structure Continues to Optimize, Over CNY 7.429 Billion Distributed in Dividends in the Past Three Years

Source: NetEase News – Dazhong Securities Daily

Author: Gong Sixuan

Zangge Mining, October 28, 2024, 10:51, Qinghai

The content of this article does not constitute any investment advice. Disclosure information is subject to company announcements. Investors operate at their own risk.

On the evening of October 25, Zangge Mining (000408.SZ) released its third-quarter report. The company achieved revenue of CNY 2.324 billion and net profit of CNY 1.868 billion in the first three quarters. The average sales cost of lithium carbonate during the period was CNY 39,800 per ton, further decreasing compared to the first half of the year.

Copper and Lithium Performance Both Strong

Benefiting from rising volume and price of copper products, the company’s investment income in the first three quarters reached CNY 1.363 billion, accounting for 72.96% of net profit, an increase of 33.88% year-on-year.

Zangge Mining’s lithium carbonate segment achieved strong production and sales performance—producing 9,277.5 tons, up 12.84% YoY, and selling 10,210 tons, up 31.56% YoY. This performance is notable against the backdrop of imbalanced supply-demand and declining external prices in the lithium industry.

As a benchmark in domestic salt lake lithium extraction, Zangge Mining continues to consolidate its cost advantage through process optimization and innovation. During the reporting period, the average sales cost of lithium carbonate fell 4% compared to the first half of the year.

Meanwhile, Jilong Copper achieved significant exploration breakthroughs, adding 14.726 million tons of copper resources, laying a solid foundation for future growth in the copper segment. Key project progress includes the simultaneous advancement of the Mami Cuo project approval and permits, acquisition and registration of 39% equity in Guoneng Mining, and securing potassium mining rights in Laos.

According to publicly available information, Guoneng Mining holds mining rights for the Ali Longmucuo and Jieze Chaka salt lakes in Tibet, with total lithium carbonate reserves of 3.9 million tons—among the world’s largest. Production capacity plans for these salt lakes are 60,000 tons and 70,000 tons of lithium salts per year, respectively. Once operational, Zangge Mining’s equity lithium carbonate production capacity will significantly increase, further consolidating its leading position in salt lake lithium extraction.

Shareholder Structure Optimizing, Concentration Increasing

Zangge Mining’s top ten circulating shareholders indicate that, by the end of Q3, new circulating shareholders included Huatai-PineBridge CSI 300 ETF holding 14.53 million shares (0.92% of free float), and Zijin Mining Investment (Shanghai) Co., Ltd. holding 13.45 million shares (0.85% of free float).

The number of shareholders has steadily declined: from 36,309 on July 10 to 33,467 on September 30. Analysts note that fewer shareholders indicate higher concentration of shares, which often favors short-term trading opportunities led by major shareholders.

It is noteworthy that Zijin Mining’s investment arm entered the top ten circulating shareholders through secondary market stock accumulation, sparking investor discussion. The motivation may be linked to Jilong Copper, a joint investment between the two listed companies. In Q3, Jilong Copper, 30.78% owned by Zangge Mining, achieved revenue of CNY 9.272 billion and net profit of CNY 4.428 billion, with key events supporting capacity expansion, leading to expectations of robust future growth.

Active Share Repurchase and Dividends Exceeding CNY 7.429 Billion in Three Years

Following directives from the Central Financial Work Conference to improve listed company quality, and the Shenzhen Stock Exchange’s “Quality and Return Double Improvement” initiative in early 2024, Zangge Mining actively repurchased shares this year.

On August 10, the company announced a repurchase plan of CNY 150–300 million, with prices not exceeding CNY 35.64 per share, for 4.208–8.417 million shares, to be canceled and reduce registered capital. Within a month of the first repurchase, Zangge Mining had repurchased 3.03 million shares, using CNY 71.546 million (0.19% of total share capital), all to be canceled, protecting investor interests and enhancing confidence.

Regarding dividends, Wind data show that Zangge Mining has distributed a total of CNY 8.06 billion since A-share listing, with CNY 7.429 billion distributed in the past three years. Cash dividend ratios for 2022–2023 were 80% and 73%, respectively, and the company continued dividends in the 2024 interim report. The current debt-to-asset ratio is only 5.2%, supporting the sustainability of high dividend policies.

Zangge Mining’s three major businesses—potassium, lithium, and copper—show significant growth potential. Lithium carbonate enjoys a strong cost advantage, and the Jilong Copper Phase II–III expansion projects create further growth space. Net profits attributable to shareholders are projected at CNY 2.43 billion, 2.48 billion, and 4.36 billion for 2024–2026, maintaining a “Recommended” rating.

Editor: Yuan Chengying