China Post Securities·2024-07-24 04:00Investment Rating - The report maintains a "Buy" rating for Zijin Mining [4][5]. Core Viewpoints - Zijin Mining is positioned as a leading international copper and gold mining service provider, with significant growth potential due to its large gold resource reserves and ongoing expansion plans [3][4]. - The valuation of Zijin Mining is notably lower than that of Southern Copper, with a PE (TTM) of around 20 compared to Southern Copper's over 30 [3][9]. - The report highlights that Zijin Mining's cost control capabilities are improving, and its dividend rate is expected to rise, which could enhance its valuation over time [3][4]. Summary by Sections 1. Valuation Differences Between Zijin Mining and Southern Copper - There is a significant valuation disparity between Zijin Mining and Southern Copper, with Zijin Mining's PE (TTM) around 20 and Southern Copper exceeding 30 [9]. - Despite similar market capitalization to copper reserves ratios, Zijin Mining's valuation remains lower when considering its substantial gold reserves [11]. 2. Zijin Mining's Competitive Advantages - Zijin Mining has a strong competitive edge in exploration and processing technologies, with a focus on low-grade ore recovery and efficient resource utilization [37][39]. - The company has demonstrated a history of successful acquisitions during market downturns, enhancing its growth potential [42][44]. 3. Financial Projections - Revenue projections for Zijin Mining are estimated at 345.87 billion, 358.28 billion, and 372.14 billion yuan for 2024, 2025, and 2026 respectively, with year-over-year growth rates of 17.88%, 3.59%, and 3.87% [5]. - The expected net profit for the same period is projected to be 31.13 billion, 39.24 billion, and 46.05 billion yuan, with growth rates of 47.42%, 26.05%, and 17.33% [5]. 4. Market Conditions - The copper market is expected to stabilize at high prices due to supply constraints and declining capital expenditures, which could support the valuation of copper mining stocks [4]. - The report anticipates a continued upward trend in gold prices driven by increasing U.S. government deficits and geopolitical tensions [4].