JINHUIINC.(SH:603132) Haitong Securities·2024-08-21 06:11Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Insights - The company focuses on lead and zinc mining, actively integrating resources to expand production capacity. It has rich reserves of lead and zinc resources, primarily from the Xiqinling lead-zinc mineralization belt, with a total resource amount of 59.79 million tons of lead-zinc ore as of the end of 2023 [4] - The company has completed acquisitions and exploration to increase its resource reserves, including the acquisition of 100% equity in Xiejiaogou Mine and Xiangyangshan Mine, and has obtained exploration rights for the Dongpo lead-zinc mine in Gansu Province [4] - The company plans to invest approximately 5 billion yuan to build a green mine with an annual production capacity of 3 million tons of lead-zinc ore in the Jiangluo mining area, which is expected to significantly enhance its resource reserves and production capacity [4][5] - Lead and zinc prices are on an upward trend, which is expected to accelerate the company's performance growth. The average prices for zinc and lead in Q2 2024 are projected to be 23,500 yuan/ton and 18,100 yuan/ton, respectively, reflecting increases of 9.2% and 14.5% compared to 2023 [5] - The company is expected to benefit from high lead and zinc prices and resource integration, with projected earnings per share (EPS) of 0.48, 0.93, and 1.27 yuan for 2024-2026 [5][6] Financial Summary - The company's revenue is projected to grow from 1,283 million yuan in 2023 to 2,606 million yuan in 2025, representing a year-on-year growth rate of 74.7% [6][10] - Net profit is expected to increase from 343 million yuan in 2023 to 911 million yuan in 2025, with a net profit growth rate of 92.7% [6][10] - The gross margin is forecasted to improve from 54.7% in 2023 to 62.5% in 2026 [6][10] - The company’s return on equity (ROE) is expected to rise from 10.8% in 2023 to 27.4% in 2026 [6][10]