ZANGGE MINING(SZ:000408) Minsheng Securities·2025-03-30 06:31Investment Rating - The report maintains a "Recommended" rating for the company, indicating a potential upside of over 15% relative to the benchmark index [7]. Core Views - The company is expected to benefit from three driving forces: potassium, lithium, and copper, with significant growth potential. The cost advantage in lithium extraction from salt lakes is notable, and the expansion projects for the giant dragon copper segment are progressing steadily. The copper segment shows significant earnings elasticity, and with Zijin Mining's involvement, project timelines may exceed expectations. The projected net profits for 2025-2027 are 2.93 billion, 4.97 billion, and 6.71 billion yuan, respectively, corresponding to PE ratios of 19, 11, and 8 based on the closing price on March 28 [5][6]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 3.25 billion yuan, a decrease of 37.8% year-on-year, and a net profit attributable to shareholders of 2.58 billion yuan, down 24.6% year-on-year. The fourth quarter of 2024 saw a revenue of 930 million yuan, a year-on-year decrease of 10.6%, but a quarter-on-quarter increase of 65.0%, with a net profit of 710 million yuan, up 57.8% year-on-year and 24.7% quarter-on-quarter [1]. Lithium Segment - The company met its annual production target for lithium, producing 11,600 tons of lithium carbonate in 2024, a decrease of 4.1% year-on-year, while sales increased by 31.7% to 13,600 tons. The average market price for battery-grade lithium carbonate in 2024 was 90,000 yuan, down 64.6% year-on-year, with the company's selling price at 75,000 yuan, a decrease of 60.8% [2]. Potassium Segment - The potassium chloride production and sales reached 1.07 million and 1.04 million tons, respectively, in 2024, with a significant recovery in Q4 sales, which increased by 88.7% quarter-on-quarter. The average market price for potassium chloride was 2,519 yuan, down 14.8% year-on-year, while the company's selling price was 2,115 yuan, a decrease of 14.9% [3]. Copper Segment - The giant dragon copper segment produced 166,000 tons in 2024, with a net profit of 6.26 billion yuan, achieving a net profit per ton of approximately 38,000 yuan. The average LME copper price was 9,271 USD per ton, up 8.8% year-on-year. The company holds a 30.78% stake in the giant dragon, contributing 1.93 billion yuan in investment income in 2024 [4]. Employee Stock Ownership Plan - The company announced a second employee stock ownership plan to enhance management and employee motivation, with performance targets set for 2025-2027 based on net profit growth and project milestones [5].