Western Mining(601168) 东兴证券·2024-11-12 10:50Investment Rating - The report gives a "Recommend" rating for Western Mining (601168 SH) based on its strong resource expansion potential and diversified product layout in new energy metals like magnesium and lithium [7][58] Core Views - Western Mining has stable mine operations and vertical integration advantages across the mining, smelting, financial trade, and salt lake chemical sectors [2] - The company has abundant mineral resources and is upgrading capacity through expansion projects, with ore processing capacity CAGR of 4 7% from 2020-2023 [2] - Copper has become the core business, contributing over 50% of revenue and gross profit in 2023 [3] - The Yulong copper-molybdenum mine is a key growth driver, with copper reserves of 5 58 million tons and plans to expand annual capacity to 18-20 million tons [4] - Western Mining is China's second largest lead-zinc concentrate producer, with ongoing multi-metal upgrading projects to boost capacity [5] Business Overview - The company has formed a stable mine operation layout nationwide and achieved vertical integration across mining, smelting, trade and chemicals [15] - It holds 15 mines with total resources of 593 million tons of copper, 154 million tons of lead, 266 million tons of zinc, and 37 million tons of molybdenum [24] - The Yulong copper mine has 558 million tons of copper reserves (94 1% of total) and 37 million tons of molybdenum reserves, with molybdenum gross margin reaching 92 29% in 2023 [31][32] - Lead-zinc operations are stable, with the Xitieshan mine contributing over 50% of lead-zinc concentrate output [41] Financial Projections - Revenue is forecast to grow from 49 62 billion yuan in 2024 to 60 92 billion yuan in 2026, with net profit increasing from 3 84 billion to 5 49 billion yuan [7] - EPS is projected at 1 61 1 95 and 2 30 yuan per share for 2024-2026, with P E ratios of 9 49X 7 86X and 6 65X respectively [7] - Copper concentrate output is expected to reach 16 41 million tons in 2024, up 25% year-on-year [36] - Lead and zinc concentrate production is forecast to increase to 65 000 tons and 130 000 tons respectively by 2025 [41] Industry Analysis - Global refined copper supply-demand balance shows a widening deficit, with consumption growth outpacing production growth from 2024-2026 [48] - China accounts for over 50% of global copper consumption, with demand driven by green energy transition and new infrastructure [51] - The 2024-2027 period may see global copper consumption increase by 11 3% to 113 45 million tons, with annual growth of 2 88% [50]