Hainan Mining(SH:601969) ZHESHANG SECURITIES·2024-08-27 10:23Investment Rating - The report gives a "Buy" rating for the company, with a 2024 PE valuation of 18x [4][6] Core Views - The company is the only listed entity under Fosun Group focused on mineral resources, with businesses spanning iron ore, oil & gas, and new energy sectors, effectively mitigating the cyclicality of single resource products [2] - The company is expected to achieve breakthroughs in all three business segments in 2024, including the commissioning of the magnetic roasting project for iron ore, new drilling in oil & gas fields, and the launch of lithium mining and hydroxide production lines [3][57] - Revenue is forecasted to grow from 5.16 billion yuan in 2024 to 7.46 billion yuan in 2026, with net profit increasing from 793 million yuan to 1.16 billion yuan during the same period [4][6] Industry Analysis - Resource supply security is a national strategy, and increased liquidity may benefit resource prices, especially if the Federal Reserve cuts interest rates [2] - Iron ore is the second-largest bulk commodity after oil, with China's import dependency remaining above 80% over the past five years [2][39] - Oil & gas prices are expected to remain stable, with crude oil being China's largest imported bulk commodity [2][47] - Lithium prices are in a downward trend, but companies with low-cost mines or salt lakes will maintain profitability, and the industry is awaiting a recovery [2][54] Company Highlights - The magnetic roasting project for the Shilu Iron Mine is expected to increase iron concentrate grade from 62.5% to over 65% and improve iron recovery rate from 60% to 85% [3][58] - Locke Oil plans to add nearly 20 new wells in 2024, and the Weizhou 10-3W oil field has transitioned from exploration to development, with production expected to start in Q1 2026 [3][60] - The Bougouni lithium mine in Africa and the 20,000-ton lithium hydroxide production line in Hainan are both set to commence operations in 2024, with an estimated lithium hydroxide output of around 3,000 tons this year [3][64] Financial Projections - Revenue is projected to grow by 10.32% in 2024, 27.98% in 2025, and 12.95% in 2026, reaching 7.46 billion yuan by 2026 [4][6] - Net profit is expected to increase by 26.76% in 2024, 19.85% in 2025, and 22.18% in 2026, reaching 1.16 billion yuan by 2026 [4][6] - EPS is forecasted to be 0.39 yuan in 2024, 0.47 yuan in 2025, and 0.57 yuan in 2026 [4][6]