On May 8th, Southern Manganese Industry (01091.HK) in the Hong Kong stock market continued to soar by 32.58%, with the company's shares closing at 0.59 Hong Kong dollars per share, valuing the company at 2.023 billion Hong Kong dollars. Over the past month since early April, the company's stock price has accumulated an approximate increase of 120%, with its market value quietly doubling.
Information shows that Southern Manganese Industry is a large enterprise group integrating mining, selection, and smelting, focusing on the production and research and development of manganese series products. It ranks among the top in Asia in terms of manganese ore mining capacity, with industrial layouts radiating to Guangxi, Guizhou, Gabon, and other places.
The company's stock surge is not unrelated to the recent strength in the manganese futures market. Data indicates that the main manganese silicon futures have risen sharply in the past month, with an approximate cumulative increase of about 35%.
The underlying reason may be the contraction on the supply side. Australian mining company South32 previously revealed that due to infrastructure damage, the company's wharf operations and export sales are expected to be suspended until the first quarter of 2025. This event is expected to reduce the global manganese ore supply by approximately 2.415 million tons, accounting for more than 11% of the global manganese ore production. In addition, media reports suggest that the National Union of Mineworkers in South Africa is protesting against a large-scale layoff plan and is ready to go on strike if not resolved.
Advertisement
The uncertainty of overseas supply, combined with high and persistent inflation and strong commodity markets, clearly favors the strengthening of manganese prices. At the same time, Southern Manganese Industry is an important global supplier of manganese series products, and the company's market share may be enhanced by this.
In terms of performance, the 2023 annual report shows that Southern Manganese Industry achieved a revenue of 17.134 billion Hong Kong dollars, a year-on-year increase of about 6.9%, and a net profit attributable to the parent company of 64 million Hong Kong dollars, a year-on-year decrease of about 81.0%. The decline in the average selling price of the company's main products, electrolytic manganese and alloy products, has put pressure on performance. With the recent recovery of manganese prices, the company's performance may be on the rise.
Currently, the main downstream application of manganese is the steel industry, where it can improve the strength, hardness, toughness, and corrosion resistance of steel, with overall demand being relatively stable.
It is worth noting that the current new energy vehicle industry is booming, and the performance requirements for the driving range of power batteries are continuously increasing. Industry insiders believe that the energy density of lithium iron phosphate cathodes has approached the theoretical limit, while lithium manganese iron phosphate, with its safety, low cost, and relatively high energy density, is expected to be sought after by the industry and become the next industrial opportunity.
Giants including BYD (002594.SZ) and EVE Energy (300014.SZ) have already begun to layout the technological path of lithium manganese iron phosphate batteries. A research report from CITIC Securities believes that the increased penetration rate of new manganese-based cathode materials is expected to increase the manganese consumption in the lithium battery industry by more than tenfold between 2021 and 2035.If the demand for manganese in new energy sources grows rapidly in the future, related upstream manganese companies are expected to develop a second growth curve, and Southern Manganese Industry may directly benefit from this.
Leave a Comment