Western Mining(601168) 东兴证券·2024-11-13 10:07Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company has established a stable mining operation and a vertically integrated industrial chain, covering mining, non-ferrous metallurgy, financial trading, and salt lake chemicals, making it a significant player in the western region of China [2][14] - The copper smelting capacity is expected to increase due to technological upgrades, with a projected production of 217,900 tons of electrolytic copper in 2024, representing a year-on-year growth of 19.1% [2][19] - The multi-metal transformation projects are enhancing lead and zinc smelting capacities, with expected production of 128,800 tons of zinc ingots in 2024, an increase of 8.4% year-on-year [3][23] Summary by Sections 1. Company Overview - The company was established in May 2000 and has successfully achieved a vertically integrated layout across its operations, focusing on copper, lead, zinc, and iron resources [14] - The company has a strong research capability, with 36 national patents filed, including 5 invention patents [14] 2. Smelting Capacity Upgrades - The copper smelting segment is seeing improvements through energy-saving upgrades, with a total electrolytic copper capacity expected to reach 300,000 tons per year by the end of 2024 [19] - The lead and zinc smelting segment is undergoing multi-metal recycling upgrades, with lead production capacity expected to double to 200,000 tons per year [3][23] 3. Salt Lake Chemical Industry - The company is actively involved in the construction of a world-class salt lake industry base, with significant magnesium salt resources and a projected annual production of 500,000 tons [4][27] - In 2023, the company's magnesium products generated revenue of 462 million yuan, a year-on-year increase of 41.29% [4][27] 4. Financial Projections - Revenue forecasts for 2024, 2025, and 2026 are 49.62 billion yuan, 55.08 billion yuan, and 60.92 billion yuan, respectively, with corresponding net profits of 3.84 billion yuan, 4.64 billion yuan, and 5.49 billion yuan [4][7] - The expected EPS for 2024, 2025, and 2026 are 1.61 yuan, 1.95 yuan, and 2.30 yuan, with PE ratios of 9.49X, 7.86X, and 6.65X [4][7] 5. Trading and Financial Services - The company has subsidiaries focused on metal trading and financial services, contributing to risk management and market opportunities [33][34] - In 2023, the metal trading segment generated revenue of 13.02 billion yuan, accounting for 30.7% of total revenue, while the financial services segment had a revenue of 250 million yuan, with a high gross margin of 88.86% [33][34]