Jinshi Resources: Layout of fluorine-containing new energy materials to open up growth space

During the reporting period, Jinshi Resources achieved revenue of 1.043 billion yuan, an increase of 18.64% year-on-year; net profit attributable to shareholders of the listed company of 245 million yuan, an increase of 2.93% year-on-year; and earnings per share of 0.79 yuan, an increase of 3.95% year-on-year.

Jinshi Resources indicated that the growth of operating income in 2021 was mainly due to the growth of product sales volume. 2021, the sales volume of Jinshi Resources' own acid grade fluorspar concentrate was 303,600 tons, an increase of 12.99% year-on-year, and the sales unit price increased slightly; high-grade fluorspar lump ore achieved sales volume of 170,100 tons, an increase of 39.77% year-on-year; the sales volume and unit price of metallurgical grade fluorspar concentrate decreased significantly The sales volume and unit price of metallurgical grade fluorspar concentrate decreased significantly.

Jinshi Resources indicated that the increase of 31.12% in the production of high-grade fluorite lump ore was mainly due to the increase in production after the release of production capacity when Lanxi Jinchang came into operation in the second half of 2020; meanwhile, the production of high-grade fluorite lump ore from Xiangzhen Mining also increased. With the increase in production, Jinshi Resources strengthened customer development and the sales volume of high-grade fluorite lump ore increased by 39.77% during the year; metallurgical grade fluorite concentrate was a by-product generated in the process of its production of acid grade fluorite concentrate. 2021, the production volume of metallurgical grade fluorite concentrate produced by Jinshi Resources decreased and its sales volume also decreased accordingly, thus operating income and costs decreased significantly.

While the main business operation is sound, the business layout of Kingstone Resources is also being quietly upgraded, having steadily entered the downstream fluorine chemical and new energy fields from the upstream resource end.

After the layout in 2021, Jinshi Resources has formed a strategic positioning of "resources - fluorine chemical - new energy".

As for the resource side, the scale of the original single fluorite business has been steadily increasing, maintaining its leading competitive advantage; the comprehensive utilization project of associated fluorite resources in cooperation with Baosteel is progressing well, and with the full cooperation of all parties, the progress of reaching the annual production capacity of 800,000 tons of fine powder in 5 years will be greatly advanced, and it is expected that 600,000-800,000 tons/year capacity will be completed by the end of this year.

For the fluorochemical project, Jinshi Resources has chosen a site in the "Green Energy" Industrial Park to be built by the government of Damao Banner, Baotou City, and the relevant environmental assessment, safety assessment and energy assessment procedures are being submitted for approval. The first phase of 120,000 tons of HFC production line is scheduled to be completed by the end of 2023, and the progress of the second and third phases will be accelerated.

In the field of new energy, the first phase of the 6,000-ton lithium hexafluorophosphate project in Jiangshan, Zhejiang province is in full swing with the strong support of the local government and is expected to be ready for trial production by the end of the year. Jinshi Resources has also stepped up negotiations with downstream battery manufacturers in order to reach a long-term strategic partnership based on close collaboration and mutual benefit in the industry chain supply chain.

Jinshi Resources is the leading enterprise in China's fluorspar industry with the largest resource reserves, mining and production processing scale, and the most advanced technology level, and has considerable advantages in laying out fluorine chemical and new energy fields. On the one hand, as the global epidemic eases and the economy gradually recovers, demand for air conditioners, refrigerators, etc. is expected to be boosted, and the basic determination of the quotas for the three generations of refrigerants and the pattern of downstream manufacturers may also bring about a price rebound; on the other hand On the other hand, new energy, new materials, semiconductors and other demand for fluorspar, is also a huge market: global new energy, including lithium hexafluorophosphate, PVDF, graphite anode, photovoltaic panels, etc. need to use a lot of hydrofluoric acid, according to available data estimates, by 2025 new energy demand for fluorspar will reach 1.5 million - 2 million tons, 2030 is likely to exceed 5 million tons. With the current global production of fluorspar at only 7-8 million tons per year, new energy may replace traditional refrigerant demand as the largest demand area for fluorspar. In other words, at some point in the future, fluorspar will experience the same "supply-demand mismatch" as other resources, and the supply may not be able to keep up with the spurt in demand for some time.