Breaking Down Sichuan Hongda Co.,Ltd Financial Health: Key Insights for Investors

Sichuan Hongda Co., Ltd. traces its roots to 1979 and rebranded in 1994, later listing on the Shanghai Stock Exchange as 600331.SS on 20 December 2001; today the vertically integrated miner-smelter-chemical group - employing 2,551 people as of 31 December 2024 - operates zinc smelting, phosphate chemicals and rare-metal recovery while expanding mining via the Duolong project with a designed annual copper capacity of about 300,000 tons; corporate moves in 2025 included a private placement of 609,600,000 shares at 4.68 RMB apiece (raising ~285.29 million RMB), lifting share capital to 2.6416 billion shares and increasing controlling shareholder Shudao Group's stake to 47.17% (post-issuance), part of a strategy to repay debt and shore up working capital under a 36-month lock-up - outcomes reflected in a market capitalization of about 17.94 billion RMB in July 2025 and 28.27 billion RMB by 12 December 2025, alongside first-half 2025 operating revenue of 1.811 billion RMB (up 2.80% year-on-year) but a net loss of 74.9946 million RMB, while the firm continues to monetize zinc ingots, alloys, fertilizers, industrial chemicals, rare metals (molybdenum, indium, germanium) and natural gas chemical products through its integrated mining-to-production model.

Sichuan Hongda Co.,Ltd (600331.SS): Intro

• Founded in 1979 with an initial focus on non-ferrous metal zinc smelting and phosphorus chemical products.
• Rebranded in 1994 as Sichuan Hongda Co.,Ltd to reflect expanded operations and diversified product lines.
• Listed on the Shanghai Stock Exchange on December 20, 2001 (ticker 600331), broadening its capital base and public presence.
• In 2014, expanded mining operations via investment in Tibet Hongda Duolong Mining - a joint venture with a designed annual copper production capacity of ~300,000 tonnes.
• Completed a private placement in 2025 of 609,600,000 shares at RMB 4.68 per share, raising ≈RMB 285.29 million.
• Workforce as of December 31, 2024: 2,551 employees (slight decrease from prior year).

• Publicly traded company on Shanghai Stock Exchange (600331.SS).
• Ownership mix includes institutional investors, retail shareholders, and strategic/controlling shareholders holding larger blocks (typical of listed Chinese industrial groups).
• Group structure includes core smelting & chemicals operations, upstream mining JV (Tibet Hongda Duolong), and supporting logistics and trading entities.

• Corporate mission emphasizes safe, efficient production of non-ferrous metals and phosphorus chemicals while pursuing sustainable mining and downstream integration.
• Values center on safety, environmental compliance, technological upgrading, and value creation for shareholders and local communities.
• See detailed corporate framing and forward-looking statements in the company's published materials: Mission Statement, Vision, & Core Values (2026) of Sichuan Hongda Co.,Ltd.

• Upstream: mining investments and ore procurement (including JV in Tibet) supply raw materials for smelting operations.
• Midstream: smelting and refining - primary activities produce zinc, copper products, and phosphorus chemical intermediates.
• Downstream: sale of refined metals, chemical products, and byproducts to industrial customers and trading channels.
• Vertical integration and trading enhance margins by capturing value across mining → smelting → sales.

• Primary revenue drivers: sales of refined non-ferrous metals (zinc, copper) and phosphorus chemical products.
• Margin drivers: raw material sourcing costs, smelting/refining yields, byproduct recovery, and commodity price cycles.
• Capital strategies: equity financing (IPO 2001; private placement 2025) and joint ventures to expand supply and capacity (e.g., Tibet JV).
• Cost and efficiency focus: technological upgrades, energy consumption management, and logistics optimization to protect margins.

Sichuan Hongda Co.,Ltd (600331.SS): History

• Market capitalization (Jul 2025): ~17.94 billion RMB
• Total shares outstanding (post-issuance): 2,641,600,000 shares
• New shares issued: 609,600,000 (raising total from 2,032,000,000 to 2,641,600,000)
• Controlling shareholder Shudao Group subscribed to all new shares
• Shudao Group shareholding: rose from 31.31% to 47.17% post-issuance
• Primary use of proceeds: debt repayment and working capital supplementation

• Regulatory context: issuance approved by CSRC and relevant exchanges, meeting compliance requirements for a non-public placement.
• Financial intent: proceeds targeted at deleveraging (specific debt paydown) and replenishing working capital to improve liquidity ratios and operational flexibility.

Sichuan Hongda Co.,Ltd (600331.SS): Ownership Structure

• Primary business: zinc smelting, zinc oxide, phosphorus chemicals, recovery of indium and germanium from residues.
• Mission focus: quality metals for agriculture, manufacturing and technology sectors; environmental stewardship via by‑product recovery.
• Vertical integration: control across mining supply, smelting, refining, and downstream chemical processing to optimize margins and quality control.
• Values: safety, integrity, innovation, sustainable growth and stakeholder responsibility.

• Primary zinc concentrate smelting and refined zinc sales (bulk of revenue and margins).
• Zinc oxide and other downstream chemical products sold into industrial and agricultural markets.
• Value recovery from waste streams: sale of indium, germanium and other minor metals - higher-margin specialty revenues.
• By-product sales and chemical intermediates (phosphorus compounds) to domestic and export customers.

• Invest in cleaner production and recovery tech to reduce emissions and increase rare-metal yields.
• CapEx allocation toward process automation and downstream product diversification.
• Maintain vertical supply control to protect margins from raw-material price swings.

Sichuan Hongda Co.,Ltd (600331.SS): Mission and Values

• Mining: Direct mining of zinc and manganese ores in Sichuan Province provides primary feedstock for downstream smelting and chemical processes.
• Smelting and refining: On-site smelting converts concentrates into zinc ingots, zinc alloys and intermediate metal products used in industrial and construction markets.
• Chemical production: Integrated acid and phosphate-based chemical plants produce phosphoric acid, ammonium phosphate varieties (including mono ammonium phosphate), calcium hydrogen phosphate and industrial sulfuric acid for both agricultural and industrial customers.
• By‑product recovery: Metallurgical tailings and acidulation residues are treated to extract molybdenum, indium and germanium, improving resource efficiency and reducing environmental burden.
• Sales & distribution: Finished metals and fertilizers are sold domestically and exported via trading channels, with logistics coordinated to serve agricultural seasons and industrial demand cycles.

• Metal sales: Zinc ingots, zinc alloys and other refined metals generate stable commodity revenues tied to LME/benchmark prices and smelting margins.
• Fertilizer & chemical sales: Phosphorus-based fertilizers and industrial acids supply agricultural and manufacturing customers - typically higher-margin, value-added products.
• By‑product extraction: Recovery and sale of molybdenum, indium and germanium provide ancillary revenue and improve overall margin on ore processed.
• Service & processing fees: Toll smelting and custom processing contracts for third parties add diversified income streams.

• Metal products: Zinc ingots, zinc alloys, other refined metals for galvanizing, die casting and alloy manufacture.
• Agricultural chemicals: Mono ammonium phosphate (MAP), ammonium phosphate blends, calcium hydrogen phosphate, phosphoric acid for fertilizers and feed additives.
• Industrial chemicals: Industrial sulfuric acid, technical-grade phosphates and intermediates for chemical manufacturing.
• Rare metals: Recovered molybdenum, indium and germanium sold into specialty metals and electronics supply chains.

• Publicly listed entity with a mix of institutional and retail shareholders; key controlling or large shareholders typically include state‑related enterprises and strategic investors (shareholding proportions can vary over time).
• Board and management prioritize vertical integration, resource security, and upgrading product mix toward higher‑value chemical and specialty metal outputs.
• Capital allocation focuses on environmental compliance, recovery technology and capacity optimization to protect margins in volatile commodity markets.

• Commodity prices: Zinc price movements directly affect smelting margins and revenue; fertilizer spreads determine chemical profitability.
• Feedstock grade & availability: Ore grade and mining continuity influence unit costs; successful recovery of by‑products enhances per‑tonne returns.
• Regulatory & environmental costs: Emissions controls, tailings management and sulfuric acid handling impact capex and operating expense.
• Seasonality & logistics: Fertilizer demand peaks tied to planting seasons, requiring inventory and distribution planning.

Sichuan Hongda Co.,Ltd (600331.SS) How It Works

• Primary revenue streams: zinc metal and alloys, zinc products from waste residues, phosphate fertilizers (including mono‑ammonium phosphate), sulfuric acid and other industrial chemicals.
• Supplementary revenue: recovered rare metals (molybdenum, indium, germanium) and natural gas chemical products (synthetic ammonia, liquid ammonia).
• Integration strategy: feedstock recovery from residues and co‑product valorization reduce raw material cost and improve overall gross margin.

• Mining & residues: extraction and collection of non‑ferrous concentrates and metal‑bearing residues that are processed into saleable metal products.
• Smelting/refining: conversion of concentrates/residues into zinc ingots, zinc alloys and other metal intermediates sold on domestic and export markets.
• Chemical synthesis: use of sulfuric acid, phosphoric acid and ammonia to produce fertilizers (MAP/DAP), industrial chemicals and downstream nitrogen products.
• Metals recovery: separation and sale of strategic rare metals (molybdenum, indium, germanium) recovered during processing - typically high‑margin, lower‑volume sales.
• Gas chemicals: production and sale of synthetic ammonia and liquid ammonia derived from natural gas feedstock to industrial customers.

• Vertical integration: converting low‑value residues into salable metal and chemical products reduces feedstock purchase and disposal costs.
• Product mix optimisation: shifting output toward higher‑margin specialty chemicals and rare‑metal recovery when commodity prices fall.
• Cost control: energy efficiency in smelting and acid/amine recovery to lower per‑ton production cost (energy is a major input for smelting and ammonia synthesis).
• Market exposure management: sales into both domestic agriculture/industry and export metal markets to capture favorable price cycles.

• Domestic agricultural cycles and fertilizer subsidies drive MAP demand and pricing.
• Global non‑ferrous metal cycles (zinc price, supply tightness) determine major revenue swings for metal products.
• Increasing recovery of critical metals (indium, germanium) supports long‑term profitability amid rising demand for electronics and specialty alloys.
• Natural gas price and availability directly impact synthetic ammonia margins.

Sichuan Hongda Co.,Ltd (600331.SS): How It Makes Money

• Core revenue streams: copper concentrate and refined copper products, by-products from smelting, and equipment/industrial services.
• Vertical integration: from Duolong Copper Mine development to processing and sales improves margin capture.
• Capital operations: debt refinancing and equity fundraising to support mine expansion and working capital.

• Market position: a significant industrial/mining player with a market cap of 28.27 billion RMB as of Dec 12, 2025.
• Short-term performance: modest revenue growth in H1 2025 (+2.80%) but a H1 net loss (-74.9946M RMB) indicating profitability pressures.
• Growth catalysts: Duolong Copper Mine investment to boost mining capacity and product diversification; successful ramp-up could improve margins and revenue mix.
• Balance sheet strategy: prioritizing debt reduction and capital raising to stabilize finances and fund expansion.