North Copper(000737) 海通证券·2024-07-25 07:31Investment Rating - Outperform rating for the company [1] Core Views - The company is a state-owned enterprise with a long history in copper mining, actively expanding its copper reserves and production capacity [5] - Tight supply-demand dynamics are expected to persist, driving copper prices higher [6] - The company is projected to benefit from rising copper prices and increased production, with EPS forecasts of 0.64, 0.74, and 0.84 yuan/share for 2024-2026 [7] - A valuation range of 9.61-10.25 yuan/share is proposed based on a 15-16x PE multiple for 2024 [7] Financial Performance and Projections - Revenue is expected to grow significantly, from 9,323 million yuan in 2023 to 28,930 million yuan in 2026 [8] - Net profit is projected to increase from 619 million yuan in 2023 to 1,493 million yuan in 2026 [8] - EPS is forecasted to rise from 0.35 yuan in 2023 to 0.84 yuan in 2026 [8] - ROE is expected to peak at 18.9% in 2024 before gradually declining to 16.9% by 2026 [8] Production and Sales Assumptions - The company plans to process 9 million tons of ore annually from 2024-2026, producing 42,000 tons of copper concentrate each year [9] - Cathode copper production is projected to reach 320,000 tons by 2025-2026 [9] Business Segment Analysis - Cathode copper is the primary revenue driver, with revenue expected to grow from 7,973 million yuan in 2023 to 24,940 million yuan in 2026 [10] - Precious metals and sulfuric acid are smaller but growing segments, with sulfuric acid turning profitable in 2024 [10] Valuation and Peer Comparison - The company is valued at a 15-16x PE multiple for 2024, lower than the peer average of 16.5x [7][25] - Key peers include Tongling Nonferrous, Yunnan Copper, and Jiangxi Copper, with an average 2024 PE of 11.5x [25] Market Performance - The stock has underperformed the Haitong Composite Index over the past year, with a 29.01% decline compared to the index's 0.99% gain [19] Industry Outlook - Copper prices are expected to remain strong due to tight global supply and supportive macroeconomic policies [6][24] - The company's expansion of reserves and production capacity positions it well to benefit from favorable industry conditions [5][20]