Chihong Zinc(600497) SINOLINK SECURITIES·2024-10-25 03:09Investment Rating - The report maintains a "Buy" rating for the company [2]. Core Views - The company reported a revenue of 14.65 billion RMB for the first three quarters of 2024, a year-on-year decrease of 11.19%, with a net profit attributable to shareholders of 1.47 billion RMB, down 15.79% year-on-year [2]. - The production of lead and zinc is still affected by shutdowns, but there was a recovery in Q3 performance compared to Q2 [2]. - The company expects to complete rectification work at the lead-zinc mines by the end of 2024, which is anticipated to boost production and improve Q4 performance [2]. Summary by Sections Financial Performance - For Q3 2024, the company achieved a net profit of 571 million RMB, a quarter-on-quarter increase of 37.51% but a year-on-year decrease of 2.97% [2]. - The total production of lead and zinc metals for the first three quarters was 230,300 tons, a decrease of 27,600 tons year-on-year [2]. - The average price of zinc in Q3 2024 was 25,300 RMB/ton, up 1.05% quarter-on-quarter, while the average price of lead was 16,500 RMB/ton, up 1.60% quarter-on-quarter [2]. Production Insights - Zinc smelting profits are under pressure due to tight raw material supply and declining treatment charges (TC) [2]. - The production of zinc products in Q3 2024 was 112,600 tons, a quarter-on-quarter decrease of 15% [2]. - The price of germanium products saw a significant increase, with a quarterly average price of 15,500 RMB/kg, up 57.07% quarter-on-quarter and 61.27% year-on-year [2]. Future Outlook - Revenue forecasts for 2024-2026 are 25.4 billion RMB, 25.9 billion RMB, and 26.4 billion RMB respectively, with net profits projected at 1.996 billion RMB, 2.685 billion RMB, and 2.720 billion RMB [2]. - The expected earnings per share (EPS) for 2024-2026 are 0.392 RMB, 0.527 RMB, and 0.534 RMB, corresponding to price-to-earnings (P/E) ratios of 14.49, 10.77, and 10.63 respectively [2].