ZANGGE MINING(SZ:000408) Huafu Securities·2025-04-03 08:36Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative price increase of over 20% against the market benchmark within the next six months [22]. Core Views - The company reported a significant decline in revenue and net profit for 2024, with operating income at 3.251 billion yuan, down 37.79% year-on-year, and net profit attributable to shareholders at 2.58 billion yuan, down 24.56% year-on-year [3][15]. - The lithium business showed a mixed performance with a production of 11,566 tons, down 4.12% year-on-year, but sales volume increased by 31.68% to 13,582 tons due to rising market demand [4]. - The potassium business faced challenges with a production of 1.073 million tons, down 1.94% year-on-year, and sales volume down 19.21% [5]. - The investment income from the Giant Dragon Copper Mine was a significant contributor, amounting to 1.928 billion yuan, representing a 48.77% increase year-on-year and accounting for 74.72% of the company's net profit [5]. Summary by Sections Financial Performance - In Q4 2024, the company achieved an operating income of 927 million yuan, a 65% increase quarter-on-quarter, and a net profit of 712 million yuan, up 25% quarter-on-quarter [3]. - The average selling price of lithium carbonate in 2024 was 85,000 yuan per ton, down 60.81% year-on-year, while the average market price was 90,500 yuan per ton, down 65.6% [4]. - The average selling price of potassium chloride was 2,305.66 yuan per ton, down 14.91% year-on-year [5]. Business Segments - The lithium segment's gross margin was 45.44%, down 35.07 percentage points year-on-year, primarily due to increased costs from brine prices and equipment maintenance [4]. - The potassium segment's gross margin was 44.83%, down 11.37 percentage points year-on-year, attributed to increased environmental compliance costs [5]. - The company is expanding its lithium, potassium, and copper operations, with significant progress in obtaining mining rights and project developments [6]. Profit Forecast and Investment Recommendations - The forecast for net profit attributable to shareholders for 2025-2027 is 3.013 billion, 4.133 billion, and 6.159 billion yuan, respectively, reflecting an upward adjustment due to unexpected copper price increases [7]. - The projected price-to-earnings ratios for 2025, 2026, and 2027 are 19, 14, and 9 times, respectively, indicating a favorable valuation outlook [7].