ZHONGTAI SECURITIES·2024-08-28 10:05Investment Rating - The investment rating for the company is "Buy" (maintained) with a market price of 16.21 CNY [1]. Core Views - The company achieved record high performance in Q2 2024, with significant increases in both revenue and net profit, driven by rising production and effective cost control [7][8]. - The company reported a revenue of 150.42 billion CNY in H1 2024, a slight increase of 0.06% year-on-year, and a net profit of 15.08 billion CNY, up 46.42% year-on-year [7]. - The company is focusing on internal growth through exploration and external growth via acquisitions, enhancing its resource base and operational capacity [10][11]. Financial Performance - In H1 2024, the company achieved a revenue of 1504.17 billion CNY, with a net profit of 150.84 billion CNY, marking a year-on-year increase of 46.42% [7]. - The company’s Q2 2024 revenue reached 756.40 billion CNY, reflecting a year-on-year growth of 0.33% and a quarter-on-quarter growth of 1.15% [7]. - The production of key minerals showed positive growth, with gold production increasing by 9.49% to approximately 35.41 tons and copper production rising by 5.35% to about 518,500 tons [8]. Cost Management - The company demonstrated effective cost control, with a decrease in the expense ratio to 3.88%, down 0.17 percentage points year-on-year [9]. - The sales cost for gold ingots was reported at 284.78 CNY per gram, reflecting a year-on-year increase of 4.90%, while the cost for copper concentrate decreased by 5.41% to 18,578 CNY per ton [8][9]. Growth Prospects - The company is expected to see a compound annual growth rate (CAGR) of around 10% for copper production over the next two years, supported by ongoing projects and expansions [12]. - The forecast for gold production indicates a CAGR of approximately 15% over the same period, with several key projects expected to contribute significantly to output [12]. - The company’s strategic acquisitions and exploration efforts have resulted in an increase in copper resources by 619.7 million tons and gold resources by 53.71 tons as of H1 2024 [11]. Valuation and Forecast - The company is projected to achieve a net profit of 314.14 billion CNY in 2024, with estimates for 2025 and 2026 at 415.82 billion CNY and 456.76 billion CNY, respectively [13]. - The current stock price of 16.21 CNY corresponds to a price-to-earnings (P/E) ratio of 14 for 2024, decreasing to 9 by 2026, indicating strong growth potential [13].