ZANGGE MINING(SZ:000408) Huaxin Securities·2024-08-14 02:00Investment Rating - The investment rating for the company is "Buy (Maintain)" [2] Core Views - The company's profitability is under pressure due to declining prices of potassium and lithium, while investment returns from copper mining are increasing [2] - The company reported a significant decrease in revenue and net profit for the first half of 2024, with revenue at 1.762 billion yuan, down 37% year-on-year, and net profit at 1.297 billion yuan, down 35.99% year-on-year [2][4] - Despite the current challenges, the company is expected to see long-term growth due to its cost advantages in lithium extraction and the expansion of copper production [4] Summary by Sections Production and Sales - Potassium chloride production for the first half of 2024 was 522,800 tons, a year-on-year increase of 1.47%, while sales were 540,100 tons, down 8.41% year-on-year [2] - Lithium carbonate production was 5,809 tons, up 28.89% year-on-year, and sales were 7,630 tons, up 56.83% year-on-year [2] Financial Performance - The average selling price of potassium chloride (including tax) was 2,265.41 yuan/ton, down 26.52% year-on-year, while the average cost of sales was 1,075.01 yuan/ton, up 6.27% year-on-year [2] - The company’s revenue from potassium chloride was 1.122 billion yuan, down 32.70% year-on-year, with a gross margin of 48.28%, down 15.95 percentage points [2] Future Outlook - Revenue projections for 2024-2026 are 3.515 billion yuan, 3.950 billion yuan, and 4.980 billion yuan respectively, with net profits of 2.705 billion yuan, 2.937 billion yuan, and 3.467 billion yuan [4] - The company is expected to benefit from the expansion of the Jilong copper mine, which is projected to significantly increase copper production [3][4] Project Developments - The company is advancing the construction of the Marmicuo salt lake project and the potassium salt project in Laos, with significant resources identified [3]