XTC(SH:600549) Hua Yuan Zheng Quan·2024-09-01 07:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the near term [4]. Core Insights - The company reported a revenue of 17.162 billion yuan in the first half of 2024, a decrease of 8.4% year-on-year, while achieving a net profit attributable to shareholders of 1.017 billion yuan, an increase of 28.5% year-on-year [4]. - The tungsten and molybdenum business experienced significant growth due to rising tungsten concentrate prices and increased production of photovoltaic tungsten wire, with revenue reaching 8.781 billion yuan, up 11% year-on-year [4]. - The rare earth business faced profitability challenges due to industry competition and asset integration, with revenue declining by 21.5% to 2.054 billion yuan [4]. - The positive materials segment benefited from the recovery in the 3C industry, with lithium cobalt oxide sales increasing by 30% year-on-year [4]. - The company is actively expanding its three main business segments: tungsten and molybdenum, rare earths, and positive materials, with several projects underway [4]. Summary by Sections Tungsten and Molybdenum Business - Revenue for the tungsten and molybdenum segment was 8.781 billion yuan, with a profit of 1.427 billion yuan, reflecting a 29% increase year-on-year [4]. - The average price of tungsten concentrate in the first half of 2024 was 134,400 yuan per ton, up 13% year-on-year [4]. - The company sold 74.3 billion meters of fine tungsten wire, with photovoltaic tungsten wire sales reaching 62.8 billion meters, a 120% increase year-on-year [4]. Rare Earth Business - Revenue from the rare earth segment was 2.054 billion yuan, down 21.5% year-on-year, with a profit of 117 million yuan, down 23.5% [4]. - The decline in profitability was attributed to business integration with China Rare Earth Group and increased competition in the industry [4]. - The company managed to increase magnetic material sales by 13% year-on-year [4]. Positive Materials Business - Revenue for the positive materials segment was 6.3 billion yuan, a decrease of 22.4% year-on-year, with a profit of 246 million yuan, down 10.1% [4]. - The company sold 18,400 tons of lithium cobalt oxide, marking a 30% increase year-on-year [4]. - The competitive landscape in the ternary materials sector has intensified, leading to a decrease in profitability [4]. Expansion Projects - The company is progressing with expansion projects across its three main business segments, including the completion of the tailings project at the Ninghua Xingluo tungsten mine and the construction of a new photovoltaic tungsten wire project [4]. - The rare earth segment is also expanding with a new high-performance rare earth magnetic material project [4]. - In the positive materials segment, the company is advancing its projects in Ningde and Ya'an [4]. Profit Forecast and Valuation - The company is expected to achieve net profits of 1.97 billion yuan, 2.18 billion yuan, and 2.41 billion yuan for 2024, 2025, and 2026, respectively [4]. - The corresponding price-to-earnings ratios (PE) are projected to be 12X, 11X, and 10X for the same years [4]. - The report compares the company with peers like Zhongtung High-tech and Zhangyuan Tungsten Industry, which have higher average PE ratios [4].