ZANGGE MINING(000408) Haitong Securities International·2025-04-10 23:31Investment Rating - The report maintains an "Outperform" rating for Zangge Mining with a target price of Rmb39.16, representing an 18% upside from the current price of Rmb33.54 [2][11]. Core Insights - The recurring net profit for 2024 decreased by 28.76% year-on-year, with total revenue of Rmb3.251 billion, a decline of 37.79% compared to the previous year. The net profit attributable to the parent company was Rmb2.580 billion, down 24.56% year-on-year [7][11]. - The decline in performance is primarily attributed to falling prices of potassium chloride and lithium carbonate. In Q4 2024, the company reported a revenue of Rmb927 million, a quarter-on-quarter increase of 64.98% but a year-on-year decrease of 10.55% [7][9]. - The company is actively rewarding investors through a combination of share repurchase and cash dividends, with a total return amounting to approximately Rmb559 million, which is 21.68% of the net profit attributable to the parent company [8][9]. Revenue and Profit Analysis - For 2024, the potassium chloride segment generated Rmb2.210 billion in revenue, a decrease of 31.26% year-on-year, while lithium carbonate revenue fell by 48.40% to Rmb1.022 billion [9][10]. - The gross profit margin for potassium chloride decreased to 44.83%, and for lithium carbonate, it dropped to 45.44% [9][10]. Investment in Copper Mining - Zangge Mining holds a 30.78% stake in Julong Copper Industry, which significantly contributed to the company's profits. In 2024, the investment income from Julong Copper Mine was Rmb1.928 billion, accounting for 74.72% of the net profit attributable to the parent company [10][11]. - The second phase of production expansion at Julong Copper Mine is expected to be completed by the end of 2025, potentially increasing the company's equity copper production capacity to 92,000 to 108,000 tons per year [10][11]. Earnings Forecast - The forecast for net profit attributable to the parent company is Rmb3.006 billion in 2025, Rmb4.455 billion in 2026, and Rmb5.322 billion in 2027, reflecting growth potential from the copper mining business [11].