Xiamen Tungsten Spends Over 400 Million Yuan to Acquire Two Targets, Expanding Tungsten Resources and Precision Tool Business

Xiamen Tungsten (600549) announced on the evening of March 24 that the company plans to invest 295 million yuan to acquire a 69% stake in Jiujiang Dadi Mining Development Co., Ltd. (referred to as “Jiujiang Dadi Mining”). After the transaction is completed, the company will become the controlling shareholder of Jiujiang Dadi Mining.

As the tungsten industry chain, especially the downstream processing and application fields such as cemented carbide, cutting tools, and tungsten wires, continues to expand capacity, Xiamen Tungsten’s demand for tungsten resources has increased year by year. Currently, the company owns three tungsten mining enterprises in operation and one under construction, but their tungsten concentrates only meet part of the company’s needs.

Against this background, Xiamen Tungsten plans to pay 128 million yuan in cash to acquire a 30% stake in Jiujiang Dadi held by its related party Jiangxi Jutong, and 167 million yuan in cash to acquire a 39% stake in Jiujiang Dadi held by non-related party Shanda Xin. The total cash investment for acquiring 69% of Jiujiang Dadi is 295 million yuan. Jiujiang Dadi holds the exploration rights for the Yangshidian copper-molybdenum polymetallic mineral deposit in Xiushui County, Jiangxi Province. Its wholly owned subsidiary, Kunshan Tungsten Mine Company, holds the mining permit for the Kunshan tungsten-molybdenum mine in Xiushui County, Jiangxi Province.

Meanwhile, to promote the company’s diversification strategy for cutting tools and enhance R&D and manufacturing capabilities for high-performance tap and cutting tools, the company’s controlling subsidiary Xiamen Jinlu Special Alloys Co., Ltd. plans to invest 104 million yuan to acquire a 70% stake in Yuanzheng (Xiamen) Precision Tools Co., Ltd. (“Yuanzheng”), held jointly by individuals Gong Xing and Yao Aiping. Yuanzheng’s main business is the production and sales of extruded taps and cutting taps, which are positioned in the mid-to-high-end market and widely used in aerospace, automotive, medical, 3C, 5G communications, and wind power sectors. Headquartered in Xiamen, Yuanzheng has offices in Dalian, Wuxi, Dongguan, and Chongqing, mainly responsible for market development, technical services, and warehousing.

In addition, to focus on core businesses in tungsten-molybdenum, rare earths, and new energy materials, and to optimize resource allocation, the company plans to transfer 25% of its equity in Suzhou Aizhi Gauss Electric Motor Co., Ltd. through a public listing, with a base price of 172 million yuan.

Xiamen Tungsten previously disclosed its performance forecast, showing that in 2025, the company will focus on steady operation of its manufacturing core business, continuously strengthen internal management, optimize operational strategies, and promote product profitability. The revenues and profits of its three core businesses—tungsten-molybdenum, rare earths, and new energy materials—have all increased to varying degrees. The company achieved an operating revenue of 46.469 billion yuan, a year-on-year increase of 31.37%; total profit of 4.081 billion yuan, up 28.45%; net profit attributable to shareholders of the listed company of 2.311 billion yuan, up 35.08%; and net profit attributable to shareholders after deducting non-recurring gains and losses of 2.162 billion yuan, an increase of 42.36%.