Western Mining(601168) 中国银河·2024-12-31 11:54Investment Rating - The report assigns a "Buy" rating to the company, indicating a positive outlook for its future performance [78][79]. Core Insights - The company is positioned as a key beneficiary of China's Western Development strategy, with significant potential for resource integration in the western region. The main asset, Yulong Copper Mine, is expected to drive revenue growth through capacity expansion. Additionally, previously overlooked iron ore assets are anticipated to recover profitability amid improving domestic economic conditions, presenting substantial profit and valuation recovery potential. The current valuation is relatively low compared to peers, and the company boasts a leading dividend level, which is expected to benefit from the recovery of the domestic economy and global liquidity [78][86]. Summary by Sections Company Overview - The company is a leading player in the mining sector in the western region of China, with a stable operational system and a focus on copper, lead, zinc, and iron mining. It has a significant presence in various provinces, including Tibet, Qinghai, Inner Mongolia, Sichuan, Xinjiang, and Gansu, and is not directly affected by geopolitical risks [84][86]. Resource and Production Capacity - As of the first half of 2024, the company holds substantial mineral reserves, including 5.93 million tons of copper, 1.54 million tons of aluminum, 2.66 million tons of zinc, and 29.649 million tons of iron ore. The company operates 15 mines, with a focus on high-quality resources [54][69]. Financial Performance - The company has shown robust financial performance, with a projected revenue of 42.748 billion yuan in 2023, expected to grow to 53.837 billion yuan by 2026. The net profit attributable to shareholders is forecasted to increase from 2.789 billion yuan in 2023 to 5.105 billion yuan in 2026, reflecting a strong growth trajectory [18][30]. Profit Contribution - The copper segment is the primary source of profit, contributing 56% to the gross profit in 2023. The company has also seen significant contributions from by-products like molybdenum, which has been increasing since 2022 [46][78]. Dividend Policy - The company has a strong commitment to returning value to shareholders through dividends, with a cash dividend of 1.19 billion yuan in 2023 and a dividend payout ratio of 42.7%, which is among the highest in the industry [65][78].