JCHX(603979) 华创证券·2024-08-27 04:51Investment Rating - Strong Buy (Maintained) with a target price of 57.48 CNY [1] Core Views - The company's mining services business continues to grow steadily, with overseas mining services revenue accounting for 63.99% of the total mining services revenue, up 2.44 percentage points year-on-year [2] - The resource development business has seen significant growth, with copper metal production increasing by 313% year-on-year to 13,200 tons, and sales revenue for resource development business surging by 412% to 861 million CNY [2] - The acquisition and consolidation of Lubambe Copper Mine is expected to contribute to future performance, with the company holding 70% equity and managing the mine's operations [2] - The company achieved a record high quarterly net profit in Q2 2024, with revenue of 2.3 billion CNY, up 27.56% year-on-year, and net profit of 339 million CNY, up 55.88% year-on-year [2] Financial Performance - In H1 2024, the company reported revenue of 4.273 billion CNY, up 30.31% year-on-year, and net profit of 613 million CNY, up 52.29% year-on-year [1] - Operating cash flow increased by 80.09% year-on-year to 486 million CNY [1] - The company's gross margin improved to 32.3% in 2024E, up from 30.4% in 2023A, with net margin expected to reach 16.2% in 2024E [4] - ROE is projected to increase from 14.3% in 2023A to 18.1% in 2024E [4] Business Segments - Mining services business contributed 77.32% of total revenue, with overseas mining services revenue reaching 2.114 billion CNY, up 14.6% year-on-year [2] - Resource development business accounted for 20.16% of total revenue, driven by a 313% increase in copper metal production and a 412% surge in sales revenue [2] - The company signed new and renewed contracts worth approximately 1.7 billion CNY for its mining services business [2] Future Outlook - The company plans to transfer 10% of its equity in Lubambe Copper Mine to ZCCM-IH for 1 USD, retaining 70% equity and operational control [1] - Lubambe Copper Mine has a reserve of 74.6 million tons of ore with a copper grade of 1.97%, and is expected to produce 32,500 tons of copper metal annually [2] - The company aims to complete technical upgrades for Lubambe Copper Mine between 2024 and 2026 to achieve full production capacity [2] Valuation - The company's target market capitalization is 35.5 billion CNY, with a PE ratio of 28x for the mining services business and 12x for the resource business [2] - The company's EPS is expected to grow from 2.61 CNY in 2024E to 4.76 CNY in 2026E [4] - The P/E ratio is projected to decrease from 16x in 2024E to 9x in 2026E, indicating potential undervaluation [4]