Hainan Mining(SH:601969) Soochow Securities·2024-09-02 13:30Investment Rating - The report assigns an "Accumulate" rating for Hainan Mining, marking the first coverage of the company [1]. Core Views - Hainan Mining has established a strategic layout focusing on three major resource sectors: iron ore, oil and gas, and new energy, achieving significant operational and investment advantages [2][24]. - The company has experienced a steady revenue growth, with a compound annual growth rate (CAGR) of 11% from 2014 to 2023, driven by acquisitions and a favorable commodity price environment [2][3]. - The supply-demand structure for key resources remains tight, with expectations for stable pricing in iron ore and oil, while lithium prices are anticipated to stabilize after recent fluctuations [2][40][48]. Summary by Sections 1. Company Development and Strategy - Hainan Mining has undergone three phases of expansion, focusing on iron ore from 2007 to 2018, diversifying into oil and gas from 2019 to 2021, and entering the new energy sector from 2021 onwards [2][24]. - The company is controlled by Fosun Group, which holds a 47% stake, ensuring a stable ownership structure [27]. 2. Resource Supply and Demand - The global iron ore production has remained stable at around 2.5 billion tons over the past eight years, with the top four producing countries accounting for 78% of the total output [40]. - Oil supply is currently in a plateau phase, with global production increasing from 3.2 billion tons in 1990 to 4.5 billion tons in 2023, reflecting a CAGR of approximately 1% [48][50]. - Natural gas production has been stable, with prices expected to remain steady due to matching supply and demand [2][48]. 3. Competitive Advantages and Operational Efficiency - Hainan Mining boasts rich iron ore reserves and high-quality products, which can reduce smelting costs and improve profitability [3]. - The company has established deep partnerships with major oil companies, contributing over 60% to its revenue in 2023 [3]. - The new energy sector is supported by favorable policies and location advantages, with a lithium hydroxide project benefiting from reduced transportation costs and tax incentives [3]. 4. Financial Forecasts - The report forecasts earnings per share (EPS) of 0.30, 0.34, and 0.42 yuan for 2023, 2024, and 2025 respectively, with corresponding price-to-earnings (P/E) ratios of 16, 13, and 12 [3].