Yulong Gold(SH:601028) Dongxing Securities·2024-10-22 09:37Investment Rating - The report maintains a "Recommended" rating for Yulong Co., Ltd. [2][8] Core Views - Yulong Co., Ltd. has transitioned to a diversified precious metal mining company, focusing on gold mining and new material mining, which enhances its valuation [2][5] - The company's core mine, the Pakingo Gold Mine, has shown continuous resource growth and operational efficiency, indicating strong resource management capabilities [2][5] - The report highlights the significant increase in mineral resources at the Pakingo Gold Mine, with gold metal content rising to 222.3 thousand ounces (69.14 tons) as of June 30, 2024, reflecting a year-on-year increase of 20.2 thousand ounces (6.28 tons) [2][5] Summary by Sections Company Overview - Yulong Co., Ltd. is primarily engaged in the trading of minerals, non-ferrous metals, coal, and chemicals, aiming to become a high-growth international mining company [3] Recent Developments - The company announced a change in industry classification from wholesale to non-ferrous metal mining, which is expected to optimize its valuation [2] - The Pakingo Gold Mine's mineral resource statement shows a total ore volume of 13.491 million tons, an increase of 2.583 million tons year-on-year [2] Financial Performance - The report projects revenues of 22.13 billion, 22.53 billion, and 25.61 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 5.63 billion, 6.82 billion, and 8.23 billion yuan [8][9] - The earnings per share (EPS) are expected to rise from 0.72 yuan in 2024 to 1.05 yuan in 2026, reflecting the company's growth trajectory [8][10] Growth Potential - The company is expected to benefit from the upward trend in gold production and prices, alongside the expansion of its core mining operations [8] - The Pakingo Gold Mine is projected to achieve gold production of 3.25 tons in 2023, increasing to 3.65 tons by 2025, indicating a growth rate of 14% to 46.7% over the years [7][8] Competitive Advantages - Yulong Co., Ltd. possesses a diversified portfolio that mitigates risks and enhances growth potential, particularly in gold and new material mining [7] - The company has a professional mining operation team and strong management capabilities, which have been validated by the operational success of the Pakingo Gold Mine [7][8]