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The chairman has just completed the purchase of shares, and Jinshi Resources (603505) is about to repurchase again.

Securities Times e-company reporter found that in recent years, Jinshi Resources, the domestic fluorite leader, has repurchased or increased its holdings many times.The repurchase plan shows that the company's repurchase price cap is nearly 70% higher than the current market price; it is also higher than the highest stock price since the company went public.

Planned repurchase of 50 million to 100 million yuan

On the evening of July 16, Jinshi Resources announced that the company intends to use its own funds to repurchase shares through centralized bidding transactions, with the repurchase amount not less than 50 million yuan (inclusive) and not more than 100 million yuan (inclusive). The repurchase period is within 6 months from the date when the board of directors deliberates and approves the repurchase plan. The repurchase price this time does not exceed 43 yuan per share (inclusive).

It is worth mentioning that since its listing in 2017, Jinshi Resources' highest price of 36.73 yuan per share was set in November 2022. The secondary market shows that the company has been in a downward trend in the past two months. As of July 16, the company closed at 25.3 yuan per share. In other words, the company'sThe upper limit of the repurchase price is nearly 70% higher than the current market price and 20% higher than the highest price in the company's history since its listing.

Jinshi Resources' repurchase is based on its confidence in the company's future development and recognition of its value, in order to further establish and improve the company's long-term incentive mechanism, fully mobilize the enthusiasm of the company's employees, effectively safeguard the interests of the majority of shareholders, enhance investor confidence, and effectively combine the interests of shareholders, the company and employees.

The purpose of the repurchased shares is to be used as a source of shares for the company's employee stock ownership plan or equity incentive plan. However, the announcement pointed out that if the company fails or fails to fully implement the above purposes, the unused portion will be cancelled according to law.

Repurchase and increase of holdings

Securities Times e-company reporter found that since January this year, several senior executives of Jinshi Resources have proposed plans to increase their holdings. The company's independent directors also increased their holdings in the secondary market in July this year.

The announcement showed that in January this year, Wang Jinhua, the actual controller and chairman of Jinshi Resources, planned to increase his shareholding by no less than 50 million yuan and no more than 80 million yuan within 6 months from January 23, 2024. The announcement on the evening of July 16 showed that Wang Jinhua's above-mentioned share purchase plan had been implemented.

As of July 16, Wang Jinhua has increased his holdings of the company's shares by 2.0576 million shares through the Shanghai Stock Exchange system through centralized bidding transactions, with a cumulative increase of 50.9921 million yuan, exceeding the lower limit of the planned increase. Based on this calculation, Wang Jinhua's average price for this year's increase is about 24.78 yuan per share.

From May to October 2023, Wang Jinhua also carried out a round of share purchases. At that time, Wang Jinhua increased his holdings of the company's shares by a total of 1.2643 million shares, with a cumulative increase of 30.5004 million yuan.

In addition, Jinshi Resources also carried out two repurchases in 2020 and 2022. Among them, the funds used for repurchase in 2020 were 1.104 billion yuan, and 4.3193 million shares were repurchased; in 2022, the funds used for repurchase were 93.5954 million yuan, and 2.9697 million shares were repurchased.

Fluorite off-season prices are at a historical high

Jinshi Resources is an industrial group specializing in fluorite mine investment and development, as well as fluorite product production and sales. The company is currently the largest enterprise in China's fluorite industry in terms of resource reserves, mining, production and processing.

Behind the repurchase and increase in holdings is the fact that Jinshi Resources has shown a rapid growth trend in recent years.

Financial report data shows that in the past seven years, Jinshi Resources' revenue compound growth rate has exceeded 31%, and its net profit compound growth rate has been close to 32%. Among them, the year-on-year growth rate of net profit for three consecutive years from 2017 to 2019 exceeded 50%.

It is reported that fluorite, also known as "fluorspar", as an important mineral raw material for modern industry, has been listed as a key mineral species that needs to be protected by developed countries such as Europe and the United States. my country has also included fluorite in the "Strategic Mineral Catalogue" in the "National Mineral Resources Plan (2016-2020)", which is a world-class scarce resource similar to rare earths.

"In recent years, with the country's increasingly strict supervision of mining, and the natural depletion of resources in small mines due to years of mining, the supply has decreased year by year." On July 16, Jinshi Resources disclosed an institutional research record showing that "Next, with the increase in our projects in Baotou and future Mongolian projects, I believe that the market concentration will increase in the future, and the small and scattered pattern will change."

It is reported that in March this year, the State Administration of Work Safety issued the "Notice on Carrying out Special Remediation of Fluorite Mine Safety". In order to effectively solve the outstanding problems in fluorite mine safety production and effectively prevent and control major safety risks, the State Administration of Work Safety decided to carry out special remediation of fluorite mine safety production across the country.

The "Notice" requires that areas such as Hebei, Inner Mongolia, and Zhejiang, where there are many fluorite mining enterprises and prominent problems and hidden dangers, should formulate a "three batches" work list of closing and withdrawing a batch, integrating and reorganizing a batch, and transforming and upgrading a batch, and continue to tackle tough problems, so as to vigorously promote the stable and positive development of the safety production order of fluorite mines.

Jinshi Resources said that the demand for fluorite, especially the downstream demand for fluorite concentrate, is seasonal. June and July are usually the off-season of the year, and the peak season will generally come after September and October. The off-season price this year can generally be maintained at a unit price of about 3,500 yuan to 3,700 yuan per ton, and the overall price is still relatively strong. This also confirms from one side that the supply of fluorite is still tight under the continuous high pressure of safety and environmental protection inspections.

What does the current unit price of fluorite of around 3,500 to 3,700 yuan per ton mean? Available data show that since June 2020, domestic fluorite prices have fluctuated upward, with the bottom continuously rising, and the price range is 2,547.22 to 3,781.25 yuan per ton. Among them, 3,781.25 yuan per ton is the highest price reached in October last year. In other words, the price in this year's off-season is also at a historical high for fluorite prices in recent years.

Editor: Peng Bo

Proofreading: Zhu Tianting