Chihong Zinc(600497) Guoxin Securities·2025-03-31 07:45Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][35] Core Views - The company is expected to face a decline in net profit for 2024, with a projected decrease of 14% year-on-year, resulting in a net profit of 1.29 billion yuan and revenue of 18.8 billion yuan, also down by 14.8% [8][4] - The decline in production is attributed to the implementation of safety system optimization projects and the disposal of fixed assets that have reached the end of their useful life [8][4] - The company benefits from rising prices of lead, zinc, and germanium, which are expected to contribute positively to profits if maintained at high levels [9][10] Financial Performance Summary - In 2024, the company achieved a revenue of 18.8 billion yuan, a decrease of 14.8% year-on-year, and a net profit of 1.29 billion yuan, down 14.24% [8][5] - The operating cash flow for 2024 was 2.37 billion yuan, reflecting a significant decline of 34.4% [8] - The company’s lead production was 75,000 tons, down 1.33 million tons year-on-year, while zinc production was 214,800 tons, down 3.75 million tons [9][2] Production and Pricing Insights - The lead price in 2024 was 17,141 yuan per ton, an increase of 1,529 yuan per ton year-on-year, while the zinc price was 23,419 yuan per ton, up 1,791 yuan per ton [9][2] - The company is the largest germanium producer globally, with a production capacity of 60 tons per year, which accounts for 25% of global output [10][3] Future Profitability Forecast - The company is projected to achieve net profits of 1.545 billion yuan, 1.702 billion yuan, and 1.777 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 19.5%, 10.1%, and 4.4% [4][32] - The estimated diluted EPS for the same years is expected to be 0.30 yuan, 0.33 yuan, and 0.35 yuan [4][32]