Chihong Zinc(600497) Tai Ping Yang·2024-12-19 02:56Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its long-term development trend [3][113]. Core Viewpoints - The company has a significant resource endowment advantage, with a high certainty of quality asset injection, having completed the acquisition of 100% equity in Qinghai Hongxin [3][54]. - Zinc production has seen a slight decline over the past two years, but demand is expected to recover as macroeconomic policies take effect [3][86]. - The company is a domestic leader in the zinc, lead, and germanium industry, with a comprehensive production capacity and a well-established industrial chain [3][19]. Summary by Sections Company Overview - The company has focused on the lead-zinc-germanium industry for over 70 years, with a comprehensive competitive strength ranking among the top in China's lead-zinc industry [3][9]. - It was established in 2000 and listed on the Shanghai Stock Exchange in 2004, becoming part of the China Aluminum Group in 2019 [3][9]. Production Capacity - As of H1 2024, the company has a zinc-lead concentrate production capacity of 420,000 tons/year, refined lead-zinc capacity of 630,000 tons/year, and germanium product capacity of 60 tons/year [3][23]. Market Analysis - Global zinc production was 12 million tons in 2023, a decrease of 4.0% year-on-year, with demand expected to stabilize and recover due to infrastructure investments [3][68][86]. - The lead market remains stable, primarily driven by the demand for lead-acid batteries, which account for about 80% of consumption [3][93]. Financial Forecast - The company is projected to achieve revenues of 22.45 billion, 23.86 billion, and 25.15 billion yuan from 2024 to 2026, with net profits of 1.86 billion, 2.12 billion, and 2.36 billion yuan respectively [3][113].