ZHUYE GP(600961)2025-05-08 07:40Investment Rating - The report assigns an "Outperform" rating for the company, with a reasonable valuation range of 15.41 to 18.49 CNY per share, indicating a potential upside of 47% to 77% from the current price of 10.24 CNY [5][3]. Core Insights - The company is a leading player in the domestic zinc smelting industry, with a comprehensive business model that includes mining, smelting, and sales of non-ferrous metals, particularly lead, zinc, gold, and silver [1][27]. - The company has a robust production capacity, with an annual output of over 40,000 tons of lead and zinc metals, along with 1.8 to 2 tons of gold and approximately 60 tons of silver [1][38]. - The company has recently completed a significant asset restructuring, acquiring core lead and zinc assets, which has enhanced its operational capabilities and resource base [16][47]. Summary by Sections Business Overview - The company primarily engages in the mining and smelting of lead, zinc, and precious metals, with nearly half of its gross profit derived from precious metals [1][27]. - It operates three mines and has a total mining capacity of 860,000 tons per year, with significant resources in lead, zinc, gold, and silver [2][32]. Financial Performance - The company forecasts a substantial increase in net profit, projecting 1.1 billion CNY for 2025, representing a 40% increase from 2024 [4][3]. - Revenue is expected to grow from 19.4 billion CNY in 2023 to 20.9 billion CNY in 2025, reflecting a compound annual growth rate (CAGR) of 6.1% [4][28]. Resource and Production Capacity - The company has a total resource base of approximately 870,000 tons of lead and zinc metals, with gold and silver resources of 43 tons and 1,259 tons, respectively [35][2]. - The lead and zinc mining rights include high-grade ore with significant gold and silver content, ensuring a strong production outlook [35][32]. Market Dynamics - The report highlights an improving market for zinc processing fees, with domestic zinc concentrate processing fees rising, which is expected to enhance smelting profitability [2][3]. - The company benefits from its affiliation with China Minmetals, which provides access to a wide range of metal resources and operational synergies [45][46].