Facing the mining industry's winter, “ The first stock in the geology and mining sector ” Shandong Geological & Mineral Resources Co., Ltd. (hereinafter referred to as “the Company”) “ Shandong Geological and Mineral Resources ”，000409.SZ ) was also not spared.

　　8 Moon 28 Shandong Land & Mineral Resources Co., Ltd. released its interim report, stating that the company achieved operating revenue in the first half of the year. 1.45 100 million yuan, a decrease compared to the same period last year. 24.5% 。

　　To seek new profit opportunities, 9 Moon 1 On [date], DiKuang Huitong, a joint venture established with equal investment by Shandong DiKuang’s wholly-owned subsidiary, Ludi Investment, and Shandong Huitong, acquired Shandong Huitong, thereby expanding into new business areas.

Earlier, 8 Moon 7 On [date], Shandong Land & Mineral Resources issued an announcement stating that Ludizhong Investment and Shandong Huitong have signed a cooperation agreement to jointly establish a joint venture company named Shandong Land & Mineral Resources Huitong Special Tire Co., Ltd. in the Laicheng Industrial Zone of Laiwu City, with the aim of developing the tire industry.

　 　New profit opportunity

　　9 Moon 1 On [date], Shandong Land & Mineral Resources announced that its wholly-owned subsidiary, Donglu Land Mining Investment Co., Ltd. (hereinafter referred to as...), “ Lu Di Investment ” ) and Shandong Huitong Tire Co., Ltd. (hereinafter referred to as “ Shandong Huitong ” ) Shandong DiKuang Huitong Special Tire Co., Ltd., established through joint investment (hereinafter referred to as “ Geological and Mining Huitong ” ) Acquired Shandong Huitong, thereby expanding into new areas.

　　It’s worth noting that this is less than a month after Dikuang Huitong was established.

　　Shandong Huitong primarily manufactures various solid tires, truck tires, industrial tires, and engineering tires, with an annual production capacity of: 200 10,000 standard sets, with a market share ranking among the top in Shandong Province; its products 80% The above is for export.

　　8 Moon 7 On the same day, Shandong Land & Mineral Resources announced that Ludi Investment, its wholly-owned subsidiary, would, during that month... 6 On [date], we signed a cooperation agreement with Shandong Huitong to jointly establish a joint venture company in the Laicheng Industrial Zone of Laiwu City. The company will be named DiKuang Huitong.

　　It is understood that Dikuang Huitong’s registered capital amounts to as much as 3 100 million yuan, of which Lu Di Investment will contribute. 2.1 Holding shares worth 100 million yuan 70% And Shandong Huitong will provide funding. 0.9 Holding shares worth 100 million yuan 30% After its establishment, Dikui Huitong has primarily engaged in the production and sales of tires and rubber products.

　　Xu Yongbo, an analyst at Yide Futures, stated that the cooperation between Shandong Land & Mineral Resources and Shandong Huitong is quite evident—its ultimate goal is to acquire all tire production capacity of Shandong Huitong and its affiliated company, Yantai Hongye.

　　As the country’s first listed mining company, Shandong Land & Mineral Resources has not been uncommon in shifting its focus to other sectors amid the downturn in the mining industry. Transitioning and investing in other fields have become a widespread practice within the industry.

　　8 Moon 28 On [date], Shandong Land & Mineral Resources disclosed its semiannual report, stating that it achieved operating revenue in the first half of the year. 1.45 100 million yuan, a year-on-year decrease. 24.50% Losses in performance 4728.32 10,000 yuan, compared to last year's profit 2679.39 Compared to the performance of 10,000 yuan, the company has shifted from profit to loss year-on-year, with a loss per share. 0.10 Yuan. Meanwhile, net profit attributable to shareholders of the listed company was negative. 4728.32 Ten thousand yuan, a decrease compared to the same period last year. 276.47% 。

　　Regarding the losses, Shandong Land & Mineral Resources stated that in the first half of the year, domestic iron ore prices, already in a prolonged slump, suffered another sharp drop. As a result, domestic iron ore production was significantly reduced, and profit margins shrank dramatically.

　　He Hangsheng, a steel analyst at Shengyi Society, was not surprised by the losses reported by Shandong Land & Mineral Resources. He pointed out that mining companies’ production and operations have been hit by the decline in iron ore prices, leading to a drop in the gross profit margin on sales of iron concentrate powder. At the same time, companies have seen an increase in loan financing, resulting in a significant rise in financial expenses, which inevitably will lead to financial losses.

　　 “ In the first half of this year, iron ore prices fell compared to the same period last year. 11% , especially 4 The month once dropped to 20% It is inevitable that mining companies will see a decline in performance in the mining sector. Currently, domestic mining companies are experiencing a continuous drop in daily production and operating rates, and enterprises are using their dwindling inventories as a strategy to curb falling prices. ” He Hangsheng stated.

“ Apart from reducing output and lowering operating rates, there’s currently no effective way to stem the decline in prices—this is a common practice across various industries domestically. ” He Hangsheng said.

　　 The future remains uncertain.

　　2012 Year 12 Last month, Shandong Land & Mineral Resources, a company whose primary business is ore mining, took over Tai Fu Industrial Co., Ltd. (hereinafter referred to as...). “ Tai Fu Industrial ” ) Successfully listed, making it the first publicly listed company in the national geological and mining sector.

　　It is understood that, 2012 At the end of the year, Tai Fu Industrial implemented a restructuring, targeting Shandong Geological Mining Group and others. 8 Targeted Share Issuance to Companies and Natural Persons 3.01 The company acquired hundreds of millions of shares in assets and sold its original equity stake in Fengtai Bio to external parties. Following the completion of the restructuring, the Shandong Bureau of Geological and Mineral Resources became the company’s de facto controlling shareholder, and the company’s core business shifted to iron ore mining, processing, and the sale of iron concentrate powder.

　　In the same year, Shandong Land & Mineral Resources issued shares to eight specific investors to acquire Shandong Ludi Mining Investment Co., Ltd. 100% Equity, Huaibei Xulou Mining Co., Ltd. 49% Equity and Loufan County Ludi Mining Co., Ltd. 40% Equity: Shandong Geological Mining issued shares to eight specific investors in total. 301335197 Stock.

　　In the aforementioned restructuring, the eight subscribers signed a “Profit Forecast Compensation Agreement” with Shandong Land & Mineral Resources. The company commits that the assets to be acquired will... 2013–2015 The total amount of actual net profit, after deducting non-recurring gains and losses, accumulated through the end of the current period over three fiscal years is: 49975.11 Ten thousand yuan.

　　Due to 2014 The annual consolidated net profit of assets acquired by Shandong Land & Mineral Resources in the year is: -1249 Ten thousand yuan, non-recurring gains and losses are -49.84 10,000 yuan; the consolidated net profit after deducting non-recurring gains and losses is -1199 Ten thousand yuan—the eight parties involved in the restructuring and additional issuance are required to provide compensation this year. 101323895 Stock.

　　This year marks the final year of the performance commitments made by Shandong Land & Mineral Resources since its backdoor listing. If the loss situation in the first half of this year cannot be brought under control, the eight shareholders who made the performance commitments will once again be required to compensate other shareholders after the annual report is released.

　　In fact, in 2014 In its annual report, Shandong Land & Mineral Resources made a pessimistic forecast, stating that... 2015 The iron ore market will continue to be characterized by oversupply this year, and iron ore prices may fall further.

　　Xu Yongbo stated that the global mining situation is grim. Various mineral products, including iron ore, have been on a downward trend. Meanwhile, major international mining giants such as Vale, Rio Tinto, and BHP continue to expand their production capacities, delivering a significant shock to the domestic iron ore market. Coupled with the recent slowdown in economic growth and the country's vigorous efforts to restructure and upgrade industries such as steel—by phasing out outdated capacity—iron ore prices are finding it extremely difficult to rebound.

　　Given this, it’s not surprising that Shandong Land & Mineral Resources has acquired Shandong Huitong. However, whether the company can turn a profit in the second half of the year remains uncertain at this point.

　　He Hangsheng stated that Shandong Land & Mineral Resources currently needs not only to increase revenue sources but also to cut expenditures. While expanding into new areas is certainly important, ensuring the continued growth of revenue from the mining sector is an immediate priority.

　　It is foreseeable that if Shandong Huitong continues to see rising profitability, expands its business scope in the Shandong geological and mining sector, and enhances its competitiveness and profitability, Shandong Geological and Mining might finally breathe a sigh of relief.