Chihong Zinc(600497) 民生证券·2024-10-25 10:11Investment Rating - The report maintains a "Recommended" rating for the company, with a target price based on the closing price of 5.68 yuan on October 24, 2024 [3]. Core Views - The company has shown significant improvement in Q3 2024 performance, with a notable recovery in mining output and a reduction in smelting pressure, leading to a quarter-on-quarter increase in net profit [1]. - The company is positioned as a leader in the lead and zinc industry, with substantial resource endowments and ongoing asset injections expected to enhance production capacity [1]. - Future profit forecasts indicate a steady growth trajectory, with projected net profits of 1.858 billion, 2.271 billion, and 2.354 billion yuan for 2024, 2025, and 2026 respectively [2][4]. Financial Performance Summary - For the first three quarters of 2024, the company reported revenues of 14.652 billion yuan, a year-on-year decrease of 10.68%, while net profit attributable to shareholders was 1.474 billion yuan, down 9.74% year-on-year [1]. - In Q3 2024, the company achieved revenues of 4.825 billion yuan, a year-on-year decline of 10.48%, but a quarter-on-quarter increase of 37.51% in net profit to 571 million yuan [1]. - The company’s lead and zinc production for Q1-Q3 2024 was 58,600 tons and 171,700 tons respectively, reflecting a year-on-year decrease of 12.3% and 10.2% [1]. Future Outlook - The company is expected to benefit from its rich lead and zinc resources, with a total resource volume exceeding 32 million tons, and a competitive cost structure in mining [1]. - The ongoing asset injection process, including the full acquisition of Qinghai Hongxin and management of Yun Copper Zinc Industry, is anticipated to further enhance resource endowment and metal production [1]. - The projected earnings per share (EPS) for 2024, 2025, and 2026 are expected to be 0.36, 0.45, and 0.46 yuan respectively, with corresponding price-to-earnings (PE) ratios of 16, 13, and 12 [2][4].