CGN MINING(01164) 浙商证券·2024-09-26 10:48Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [8]. Core Views - CGN Mining is positioned as a leading player in the uranium sector, benefiting from the recovery of nuclear power and the tightening supply-demand dynamics in the uranium market [2][3]. - The company is expected to leverage its strong backing from CGN Group, which holds a significant share of the Chinese nuclear power market, to secure stable and growing demand for natural uranium [5][6]. Summary by Sections Company Overview - CGN Mining is the only overseas uranium resource development platform under CGN Group, the largest nuclear power group in China [16]. - The company has a clear focus on uranium resource development and trade, having established a dual-driven business model of "trade + resources" [17][19]. Nuclear Power Recovery and Uranium Demand - The global nuclear power capacity is projected to grow from approximately 396 GW to 524 GW by 2030, leading to an increase in uranium demand by 22,506 tons per year [3][37]. - The report highlights a stable growth in demand for natural uranium driven by the recovery of the nuclear power sector, which has been revitalized since 2019 [28][29]. Supply Dynamics - The report notes a significant supply gap in the uranium market due to a decade of low exploration and production following the Fukushima disaster, leading to a reliance on secondary supply sources [4][40]. - The primary supply of uranium is expected to remain constrained, with the report indicating that the market is entering a long-term bullish phase for uranium prices [4][28]. Competitive Advantages - CGN Mining benefits from its strong relationship with CGN Group, which accounts for 53% of the Chinese nuclear power market, ensuring a reliable demand for uranium [5][57]. - The company holds approximately 39,000 tons of uranium resources, with a cost structure that positions it favorably in the global market, maintaining production costs between 30 per pound U3O8 [6][65]. Financial Projections and Valuation - The report forecasts CGN Mining's revenue to reach HKD 105.35 billion, HKD 130.37 billion, and HKD 142.41 billion for the years 2024, 2025, and 2026, respectively, with corresponding net profits of HKD 5.10 billion, HKD 7.29 billion, and HKD 10.30 billion [7][76]. - A target price of HKD 1.92 per share is set based on a 20x PE valuation for 2025, indicating a potential upside of approximately 29% from the current price [11][76].