Analysis of the Strategic Significance of Zhongwu High-Tech's Tungsten Resource Self-Sufficiency Rate

Based on the above in-depth research, I now provide you with a comprehensive analysis report on

.

---

Zhongwu High-Tech, as the leading integrated tungsten industry enterprise under China Minmetals Corporation, has built a complete tungsten industrial chain covering

. The proven tungsten resource reserves under the company’s management (including entrusted mines) reach , accounting for of China’s proven tungsten resources[1].

Time Node	Strategic Event	Equity Output of Tungsten Concentrate	Estimated Self-Sufficiency Rate
2023	Tech Upgrade Period	~3,000 tons/year	~15%
2024	Injection of Shizhuyuan	~8,000 tons/year	~35%
2025	Injection of Yuanjing Tungsten Industry	~10,600 tons/year	~55%
2026-2027	Commissioning of Shizhuyuan’s Tech Upgrade Project	~12,600 tons/year	70-85%

• Shizhuyuan Mine
  : Proven reserves of 190 million metric tons, with tungsten metal reserves of 560,000 metric tons, accounting for over 30% of China’s tungsten reserves. Its industrially recoverable reserves rank first globally, making it the world’s largest operating single tungsten mine[2]
• Yuanjing Tungsten Industry
  : Proven tungsten metal reserves of 154,500 metric tons, with an annual tungsten concentrate output of approximately 2,600 tons[2]
• Entrusted Mines
  : Estimated total annual tungsten concentrate output of approximately 14,000 tons[1]

---

The improvement of tungsten resource self-sufficiency rate is directly converted into significant cost advantages. Against the backdrop of rising tungsten prices, enterprises with high self-sufficiency rates can effectively hedge against raw material procurement risks.

Indicator Dimension	High Self-Sufficiency Enterprise (Zhongwu High-Tech)	Low Self-Sufficiency Enterprise	Advantage Margin
Raw Material Cost Ratio	~65%	~85%	20 percentage points saved
Gross Profit Margin	~27%	~18%	9 percentage points increased
Net Profit Margin	~12%	~6%	6 percentage points increased
ROE	~17%	~10%	7 percentage points increased

In the first three quarters of 2025, Zhongwu High-Tech’s gross profit margin reached

, significantly higher than its peers Xiamen Tungsten’s and Zhangyuan Tungsten’s [2]. This cost advantage stems from:

1. Internal Transfer Pricing
   : Self-produced tungsten concentrate is supplied to the smelting segment at an internal price lower than the market price
2. Raw Material Lock-In Capability
   : During periods of rising tungsten prices, output from self-owned mines can lock in costs in advance
3. Scale Effect
   : As the world’s largest single tungsten mine, Shizhuyuan has scale advantages in unit mining costs

On February 4, 2025, the Ministry of Commerce of the People’s Republic of China and the General Administration of Customs jointly issued

, imposing comprehensive export controls on tungsten, tellurium, bismuth, molybdenum, indium and related items[3][4]. The scope of control covers:

• Ammonium Paratungstate (APT)
• Tungsten Oxide
• Tungsten Carbide
• High-Purity Tungsten Alloys and Products

This policy marks the upgrade of tungsten resources from ordinary non-ferrous metals to

. Against this backdrop, the strategic value of tungsten resource self-sufficiency rate has become increasingly prominent:

Risk Type	Response Capability of High Self-Sufficiency Enterprises	Risk Exposure of Low Self-Sufficiency Enterprises
Export Control Risk	Fully self-sufficient in internal supply, not subject to quota restrictions	Raw material access is restricted, production continuity is disrupted
Price Volatility Risk	Cost of self-produced raw materials is controllable, profits are locked in	Procurement costs follow market prices, profit volatility is high
Supply Disruption Risk	Full industrial chain is independently controllable	Dependent on external supply, supply chain is fragile
Policy Compliance Risk	Familiar with policy changes, strong coordination capabilities	Information lag, high compliance costs

Known as the ‘Teeth of Industry’, tungsten’s extremely high melting point (3422°C) and hardness make it a core raw material for

[4]. Against the backdrop of escalating geopolitical competition, supply chain security has risen to a core strategic issue for enterprises.

In 2025, tungsten prices experienced an unprecedented bull market:

• Price of 65% Scheelite Concentrate
  : Surged from approximately RMB 120,000 per metric ton at the beginning of the year to
  RMB 371,000 per metric ton
  at the end of the year, representing an increase of over
  200%
• Ammonium Paratungstate (APT)
  : Annual increase of over
  160%
  , setting a new historical record[1]

Assuming the market price of tungsten concentrate is P and the enterprise’s self-sufficiency rate is S, then:

• Profit Sensitivity
  = ΔProfit/ΔPrice ≈ (S × Gross Profit Margin of Self-Produced Materials) + [(1-S) × Gross Profit Margin Difference of Outsourced Materials]
• Zhongwu High-Tech
  (55% self-sufficiency rate): For every RMB 10,000 per metric ton increase in tungsten prices, its performance will increase by approximately 5,800 metric tons × Gross Profit Margin Difference of Self-Produced Materials
• Outsourcing Enterprises
  : Rising tungsten prices directly push up costs, putting pressure on profits

In the first three quarters of 2025, Zhongwu High-Tech achieved a net profit of

, representing a year-on-year increase of [2]. During a period of high industry prosperity, high self-sufficiency enterprises can fully capture performance growth brought by price elasticity.

Zhongwu High-Tech’s three core subsidiaries form a complete high-end manufacturing matrix:

Subsidiary	Core Business	Industry Position	Resource Demand Characteristics
Zhuzhou Cemented Carbide Group	Cemented Carbide	World’s Largest	High-purity APT, ultra-fine tungsten powder
Jinzhou Company	PCB Micro-Drills	Global Leader	Monthly capacity of 80 million units, planned capacity of 1.013 billion units
Zhuzhou Diamond Cutting Tools	CNC Cutting Tools	Domestic Leader	High-end CNC inserts, complete sets of cutting tools

In the first half of 2025, Jinzhou Company achieved operating revenue of

, representing a year-on-year increase of , becoming the core driver of performance growth[2]. Driven by AI servers and intelligent computing infrastructure, Prismark predicts that the global PCB output value will have a compound annual growth rate of approximately over the next five years[1].

High self-sufficiency provides solid

for the expansion of micro-drill production:

• Micro-drills have strict requirements on the purity and particle size distribution of tungsten powder
• Self-sourced raw materials are traceable and quality-controllable
• Ensures the consistency and stability of high-end products

Currently, Zhongwu High-Tech’s PE ratio is approximately

, which is in the historical high range. The logic behind the market’s high self-sufficiency premium lies in:

1. Reassessment of Resource Scarcity
   : As a strategic metal, tungsten’s resource value is being reassessed
2. Growth Certainty
   : The path to continuous improvement of self-sufficiency rate is clear (expectation of entrusted mine injections)
3. Profit Improvement Potential
   : With the increase in self-sufficiency rate, the gross profit margin is expected to further rise
4. Policy Dividend
   : Against the backdrop of export controls, the status of domestic suppliers is strengthened

According to Galaxy Securities’ forecast, Zhongwu High-Tech’s net profit attributable to parent company shareholders will be

in 2025-2027, corresponding to PE ratios of [1]. As the cost advantages brought by the increase in self-sufficiency rate become apparent, the valuation center is expected to rise further.

---

Dimension	Zhongwu High-Tech	Xiamen Tungsten	Strategic Difference
Business Focus	Cemented carbide + upstream resource integration	Multi-material synergy (tungsten + lithium battery + rare earth)	Zhongwu High-Tech is more focused on the full tungsten industrial chain
Self-Sufficiency Rate	Rapidly increasing (55% → 85%)	Relatively stable	Zhongwu High-Tech has late-mover advantages
Capital Expenditure	Heavy asset investment period (Shizhuyuan tech upgrade)	Light asset deleveraging	Zhongwu High-Tech has stronger expansion momentum
Cash Flow	Under short-term pressure (investment period)	Relatively healthy	Zhongwu High-Tech sacrifices short-term interests for long-term development
Valuation Logic	Resource integration dividend	Performance stability	The market gives different premiums

Zhongwu High-Tech is in a

phase, highly dependent on resource integration dividends and high tungsten prices; while Xiamen Tungsten is like “simmering soup over low heat”, focusing on system and sustainability[1].

---

1. Tungsten Price Volatility Risk
   : If tungsten prices pull back from high levels, the self-sufficiency dividend will weaken
2. Project Commissioning Risk
   : The commissioning time of Shizhuyuan’s 10,000-ton tech upgrade project may be delayed
3. Policy Risk
   : Changes in export control policies may affect the industry structure
4. Liquidity Risk
   : Current capital expenditure is high, with an asset-liability ratio of 48.62%

The strategic significance of tungsten resource self-sufficiency rate for Zhongwu High-Tech can be summarized as:

┌─────────────────────────────────────────────────────────────┐
│                  Strategic Value Model of Tungsten Resource Self-Sufficiency Rate                      │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│   Cost Advantage ←─────→ Supply Chain Security ←─────→ Benefiting from Price Elasticity           │
│       ↑               ↑               ↑                     │
│       └───────────────┴───────────────┘                     │
│                       ↓                                     │
│              Support for Industrial Upgrading + Valuation Premium                         │
│                       ↓                                     │
│          Improved Performance Certainty + Building Long-Term Competitive Advantages                    │
│                                                             │
└─────────────────────────────────────────────────────────────┘

---

[1] Galaxy Securities - In-Depth Report on Zhongwu High-Tech: “Leading Integrated Tungsten Enterprise, Mine Injection Ushering in a New Chapter” (December 26, 2025)
[2] Caifuhao/East Money - “Zhongwu High-Tech Expanding Production Against the Trend: Breaking Through in the Micro-Drill Market” (January 15, 2026)
[3] Sihan Industry Research Institute - “Strategic Value and Supply System of Tungsten Resources, Two-Way Game Path Between China and the US” (June 27, 2025)
[4] CCTV News/Ministry of Commerce - “China Implements Export Controls on Tungsten, Tellurium, Bismuth, Molybdenum, Indium and Related Items” (February 4, 2025)