SDR(SZ:000603) Huaan Securities·2024-09-02 16:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a profit turnaround with continued production growth in precious metals [1] - In H1 2024, the company achieved operating revenue of 852 million yuan, a year-on-year increase of 4.27%, and a net profit attributable to the parent company of 82.49 million yuan, up 34.9% year-on-year [1] - The average prices of silver and gold in H1 2024 were 6,785.3 yuan/kg and 521.2 yuan/g, representing year-on-year increases of 28.2% and 20.1% respectively [1] - The company plans to complete the construction of the Caiyuanzi copper-gold mine by 2025, with a proven gold resource of 17,049 kg and an average grade of 2.82 g/t [1] - The company expects continuous growth in its gold and silver business, with projected net profits of 274 million yuan, 371 million yuan, and 485 million yuan for 2024, 2025, and 2026 respectively [1][2] Financial Performance Summary - In H1 2024, the company reported a net profit of 91.27 million yuan, a year-on-year increase of 103.32% [1] - The company's operating revenue is projected to grow from 2.254 billion yuan in 2023 to 3.443 billion yuan in 2026, with a compound annual growth rate of 18.5% [2][5] - The gross profit margin is expected to improve from 32.0% in 2023 to 40.4% in 2026 [2][5] - The company's return on equity (ROE) is projected to increase from 4.7% in 2023 to 11.5% in 2026 [2][5] Production and Sales Insights - The company reduced sales of lead concentrate with high silver content due to expectations of rising silver prices, resulting in a year-on-year decrease in zinc, lead, and silver sales by 34.73%, 25.90%, and 15.35% respectively [1] - The company anticipates a recovery in production and sales in the second half of the year, supported by rising metal prices [1]