Zoogal High-tech: Tungsten ore mining subject to rigid constraints from national extraction quotas

Securities Star News: Zhongtung High-tech (000657) responded to investor questions on March 10th on the Investor Relations platform.

Investor: What percentage of the company’s raw materials are purchased externally? The government controls the total tungsten supply. For the company, if downstream products are in short supply, can they purchase tungsten concentrate without restrictions or are there limited quotas?

Zhongtung High-tech Secretary: Currently, the company owns two mines through its equity holdings: Shizhu Garden and Yuanjing Tungsten. Based on the company’s equity scope, self-sufficiency is about 30%. Additionally, the company manages three tungsten mines—Xianglushan, Xintianling, and Yaogangxian—through entrusted management. Tungsten mining is strictly constrained by national mining quotas.

Investor: After merging with Yuanjing Tungsten, what is the self-sufficiency rate of tungsten mines at the equity level? Are the mineral trading prices for entrusted mines based on long-term agreements or market prices?

Zhongtung High-tech Secretary: Currently, the company owns two mines—Shizhu Garden and Yuanjing Tungsten—with a self-sufficiency rate of about 30% based on equity. Transactions with entrusted enterprises are related-party transactions, strictly following related-party pricing principles.

Investor: Tungsten prices have risen rapidly. How are the prices of the company’s terminal products? How is the pass-through to tools and PCB drill bits? Does this affect gross profit margins? Other tungsten companies have issued price adjustment notices or announcements; why hasn’t the company?

Zhongtung High-tech Secretary: Since 2025, the company has issued multiple rounds of price adjustment notices for terminal products to customers. The company’s cemented carbide products are diverse, with varying raw material proportions and sensitivities to raw material costs. The company continuously enhances product added value through technological innovation and structural optimization, overcoming the impact of raw material price fluctuations, and maintaining or improving gross profit margins. Overall, the rise and sustained high levels of tungsten prices are beneficial to the company’s performance.

The above content is compiled from publicly available information by Securities Star and generated by AI algorithms (Net Xin Suan Bei 310104345710301240019). It does not constitute investment advice.