CHINA TUNGSTEN HIGHT(SZ:000657) Guoyuan Securities·2025-04-07 14:31Investment Rating - The report assigns a "Buy" rating to the company [4][7]. Core Views - The tungsten supply-demand landscape is tightening, supporting an upward shift in tungsten prices. Global tungsten concentrate production is on a downward trend, with the 2024 national tungsten concentrate mining total control indicator set at 114,000 tons, a slight increase from 111,000 tons in 2023, indicating a low growth rate. This tightening supply is expected to continue boosting tungsten prices. On the demand side, the ongoing growth in global manufacturing, particularly in high-end sectors such as aerospace, new energy vehicles, and electronic information, is driving stable growth in tungsten demand, with hard alloys and tungsten wires being the main drivers. The average price of tungsten concentrate is rising annually, with the average price for black tungsten concentrate expected to reach 136,500 yuan/ton in 2024, a year-on-year increase of 14.16% [2][4]. Summary by Sections Company Overview - The company is a leading player in the tungsten industry, backed by China Minmetals Corporation, and operates a complete tungsten industry chain from mining to manufacturing. The acquisition of Shizhu Garden Company is expected to enhance the company's upstream resource layout, integrating tungsten mining, smelting, hard alloy, and deep processing [2][14]. Product and Market Position - The company maintains a leading position in the production of CNC cutting tools, with a steady increase in output. In the first half of 2024, the company produced 60 million CNC cutting blades, a year-on-year increase of 20%. The company is also expanding its production capacity for photovoltaic tungsten wires through its subsidiary Changcheng Tungsten Molybdenum [3][24]. Financial Performance and Forecast - The company is expected to see stable growth in net profit, with forecasts of 880 million yuan, 993 million yuan, and 1.126 billion yuan for 2024, 2025, and 2026 respectively. The current stock price corresponds to P/E ratios of 23.62, 20.94, and 18.46 for the same years [4][6]. Industry Dynamics - The tungsten industry is characterized by a tightening supply-demand balance, with global tungsten resources increasing while production is declining. The global tungsten resource reserve is projected to reach 460,000 tons in 2024, with China holding the largest share at 240,000 tons [47][61]. The average price of tungsten concentrate is expected to rise, with significant increases noted in both black and white tungsten concentrates [50][51].