3.2 One to Two Morning Trading Plan

Wuxi Xianglu Tungsten Industry Co., Ltd. (SZ002842)

[Taoguba]
Company Overview: Wuxi Xianglu Tungsten Industry, established in 1997, is a full-industry-chain tungsten products enterprise. Its main business involves the development, production, and sales of tungsten products. Through years of development, the company has formed a complete industry chain from tungsten concentrate mining to deep processing, covering tungsten ore mining, ammonium paratungstate (APT) smelting, tungsten oxide, tungsten powder, tungsten carbide powder, hard alloy, tungsten wire, and other tungsten products. The company is one of the enterprises approved by the Ministry of Commerce for “State-owned Tungsten Export Qualification.” Its subsidiary, Jiangxi Xianglu, holds mining rights for the Tiecangzai tungsten mine, covering 5.96 square kilometers, with mining of tungsten, tin, and copper ores.
Financial Performance: Clear turning point with significant profit improvement. The company’s 2025 financial data shows a remarkable turnaround, shifting from loss to profit with rapid growth.

| Financial Indicator 2025 Data Year-over-Year Key Insights | Net Profit Attributable to Parent | 125 million - 180 million RMB (full-year forecast) | Turned profitable | Compared to a loss of 89.5 million RMB in the same period last year, performance has fundamentally improved | | — | — | — | — | | Net Profit Excluding Non-recurring Items | 115 million - 170 million RMB (full-year forecast) | Turned profitable | High-quality main business profit | | Revenue in First Half of Year | 931 million RMB | +3.24% | Steady revenue growth | | Net Profit in First Half of Year | 18.38 million RMB | +277.65% | Profit growth far exceeds revenue, significantly improving profitability | | Gross Margin in First Half of Year | 10.35% | Noticeably improved | Compared to 5.75% for the full year 2024, a significant improvement |

According to the company’s 2025 performance forecast, the main drivers of substantial growth include:
Rising Tungsten Prices: During the reporting period, raw material prices for tungsten metals continued to rise throughout the year. The tungsten market’s supply and demand improved, enhancing the company’s bargaining power for tungsten products. The pass-through of raw material price increases to downstream products was relatively smooth.
Increased Hard Alloy Sales: Orders for hard alloys increased significantly year-over-year.
Photovoltaic Tungsten Wire Capacity Release: New products, photovoltaic tungsten wires, are gradually coming into production.
Cost Control: The company strengthened cost management to improve profitability.

Business Analysis: Synergistic development of three major segments with ongoing structural optimization. Based on data from the first half of 2025, the company’s main business consists of three segments, with tungsten wire series growing the fastest and having the highest gross profit margin.

| Business Segment 2025 H1 Revenue Share Gross Margin Key Highlights | Powder Products | 60.46% | 8.06% | Core Business | Slight decline due to international situation, but remains the main revenue contributor | | — | — | — | — | — | | Hard Alloys | 22.14% | 11.01% | Important Growth Driver | Benefiting from large infrastructure projects, orders increased significantly | | Tungsten Wire Series | 12.59% | 19.63% | High-Growth New Business | Highest gross margin, capacity gradually released, key to performance growth |

Product-specific Analysis:
Powder Products (e.g., tungsten carbide powders)
As the company’s traditional main business, powder products account for over 60% of revenue but have relatively low gross margins. In the first half of 2025, revenue was 562 million RMB, down 6.25% year-over-year, mainly due to international geopolitical influences causing regional sales fluctuations.
Hard Alloys
This segment is a key profit growth point, with revenue of 206 million RMB in the first half of 2025, up 26.54%. Benefiting from the advancement of domestic infrastructure projects, demand for mining and engineering hard alloys remains strong, with orders increasing significantly, leading to a gross margin of 11.01%.
Tungsten Wire Series
The tungsten wire series is the company’s most growth-oriented segment, with revenue of 117 million RMB in the first half of 2025, a substantial increase of 46.49%, and a gross margin of 19.63%. The growth mainly stems from capacity release of new photovoltaic tungsten wire products, used primarily in solar silicon wafer cutting. Benefiting from the photovoltaic industry’s cost reduction and efficiency improvement needs, the market potential is broad.

Industry Chain Layout: Upstream Extension and Resource Self-sufficiency
The company actively extends upstream to enhance raw material security:
Mining Resources: Its subsidiary Jiangxi Xianglu holds mining rights for the Tiecangzai tungsten mine, covering 5.96 square kilometers, with tungsten, tin, and copper mineral extraction.
Resource Self-sufficiency: Upstream mining helps mitigate raw material price volatility risks and improves cost control capabilities.