Sinomine(SZ:002738) Haitong Securities·2024-08-20 00:10Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2] Core Views - The report highlights that lithium prices have declined, putting pressure on the company's performance in the first half of 2024, with revenue of 2.422 billion yuan, a decrease of 33% year-on-year, and a net profit of 473 million yuan, down 69% year-on-year [6][9] - The Bikita project in Zimbabwe has successfully increased lithium self-sufficiency, with lithium salt sales from self-owned mines reaching 16,799 tons in the first half of 2024, surpassing the total sales for the previous year [6] - The company is actively reducing production costs through adjustments in raw material structure and the construction of photovoltaic power stations [6] - The completion of the Kitumba copper mine acquisition opens new growth opportunities for the company [6] - The company maintains a strong competitive advantage in the cesium and rubidium salt sector, with a gross margin of 72% in the first half of 2024, reflecting its market leadership [6] Summary by Sections Financial Performance - In the first half of 2024, the company reported revenue of 2.422 billion yuan, a decrease of 33% year-on-year, and a net profit of 473 million yuan, down 69% year-on-year [6][9] - The second quarter revenue was 1.295 billion yuan, with a quarter-on-quarter increase of 15%, while net profit was 217 million yuan, a quarter-on-quarter decrease of 15% [6] Project Developments - The Bikita project has increased its lithium resource reserves from 850,000 tons LCE to 2.88 million tons LCE since acquisition [6] - The project is expected to reach full production capacity by November 2023, enhancing the company's lithium self-sufficiency [6] Cost Management - The company is implementing various cost-reduction measures, including adjusting raw material structures and enhancing power supply capabilities to lower production costs [6] Growth Opportunities - The acquisition of the Kitumba copper mine, where the company holds a 65% stake, is expected to contribute to future growth [6] Profitability Forecast - The company forecasts EPS of 1.40, 1.97, and 2.62 yuan for 2024, 2025, and 2026 respectively, with a target valuation range of 29.55 to 33.49 yuan based on a PE ratio of 15-17 times for 2025 [6][9]