Hua Yuan Zheng Quan·2024-06-19 03:30Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][6][25]. Core Views - The company is experiencing continuous expansion in its copper and gold sectors, with strategic investments in lithium and molybdenum to create a second growth engine. The projected growth in copper and gold production, alongside favorable market conditions, suggests a strong performance outlook [5][6][8][25]. Summary by Sections 1. Copper Sector: Continuous Capacity Release and Project Advancement - In 2023, the company produced 1.01 million tons of copper, a 15% increase year-on-year. Key projects include the Kamoa-Kakula project in the Democratic Republic of Congo, which is expected to reach an annual capacity of over 600,000 tons by 2024 [15][16]. - The Timok and Bor copper mines in Serbia are progressing towards full production, with expected capacities of 300,000 tons per year by 2025 [15][16]. - The company anticipates copper production to exceed 1.22 million tons by 2025, driven by ongoing capacity expansions and new projects [15][16]. 2. Gold and Silver Sector: Resumption of Four Major Mines - The company achieved a gold production of 67.73 tons in 2023, marking a 20.17% increase. Future growth is expected from the resumption of operations at four major mines, including the Suriname Rosebel and the Haiyu gold mines, which are projected to contribute significantly to production by 2025 [18][19]. - The company aims for a total gold production of 85 tons by 2025, supported by the revival of these key mining operations [19][20]. 3. Strategic Layout of Lithium and Molybdenum Sectors - The company is developing its lithium sector with over 10 million tons of lithium resources, targeting a production of 120,000 to 150,000 tons of lithium carbonate by 2025 [22][24]. - The molybdenum sector is projected to achieve an annual production of 27,200 tons, contributing an average profit of 1 billion yuan [24]. 4. Profit Forecast and Valuation - The company forecasts net profits of 28.7 billion, 33.9 billion, and 40.3 billion yuan for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 16X, 13X, and 11X [5][6][25]. - Compared to peer companies, which have average P/E ratios of 19X, 16X, and 14X for the same period, the company demonstrates a strong growth outlook and profitability [6][25].