CGN MINING(01164) 国证国际·2025-03-28 06:44Investment Rating - The report maintains a "Buy" rating for China General Nuclear Power Corporation (1164.HK) with a target price of HKD 2.25 [6][5]. Core Views - The company is expected to benefit from its low-cost uranium resources and the global nuclear power expansion, which will enhance its long-term value despite short-term pressures [1][5]. - Revenue for 2024 is projected to grow by 17% to HKD 8.624 billion, while net profit is expected to decline by 31% to HKD 342 million due to increased tax expenses and one-time losses [2][5]. Financial Performance Summary - In 2024, the company achieved revenue of HKD 8.624 billion, a 17% year-on-year increase, but reported a net profit of HKD 342 million, down 31% from the previous year [2][5]. - The gross profit margin was negative at -0.8% due to unexpected increases in international uranium prices, leading to a loss of HKD 66.12 million [2][5]. - The company plans to distribute a dividend of HKD 0.007 per share, with a payout ratio of 23% [2]. Uranium Resource Segment - The company reported a 71% increase in overseas uranium investment income, reaching HKD 1.016 billion, benefiting from high natural uranium prices [3]. - The production from the company's key mines, including the Xie and Yi mines, was 964 tons in 2024, with a unit cost of USD 28 per pound, contributing HKD 399 million in joint profits, a 46% increase year-on-year [3]. - The total remaining reserves for the Xie and Yi mines are 7,700 tons of uranium, which can sustain production for 5-6 years at current extraction rates [3]. One-time Impact from Terminated Business - The acquisition of Fission Uranium by Paladin Energy resulted in a one-time loss of HKD 170 million due to the decline in Paladin's share price [4]. - The report indicates that these one-time impacts are not expected to affect future profits [4]. Industry Outlook - The global nuclear power sector is expected to see steady growth, with 417 operational nuclear reactors worldwide and a capacity of 377 GW as of the end of 2024 [5]. - Revenue projections for the company from 2025 to 2027 are HKD 10.358 billion, HKD 11.732 billion, and HKD 12.329 billion, respectively, with net profits expected to rise significantly during this period [5][9].