CGN MINING(HK:01164) HTSC·2025-06-04 07:14Investment Rating - The report maintains a "Buy" rating for CGN Mining (1164 HK) with a target price of HKD 2.43 [5][6] Core Views - The newly signed three-year uranium sales agreement for 2026-28 has exceeded market expectations in terms of volume, price, and annual increment rate, indicating a positive outlook for the company's profitability and valuation [1][2] - The agreement's benchmark prices for 2026, 2027, and 2028 are set at USD 94.22, 98.08, and 102.1 per pound of U3O8, respectively, which are significantly higher than previous agreements [2][9] - The increase in the proportion of spot prices in the pricing formula from 60% to 70% enhances the company's profit elasticity, allowing it to benefit more from potential increases in spot market prices [9] Financial Forecasts and Valuation - The report projects the company's revenue and net profit for 2026 and 2027 to be HKD 10.28 billion and HKD 11.35 billion, respectively, reflecting an increase of 15% and 10% from previous estimates [2][11] - The earnings per share (EPS) for 2026 and 2027 are forecasted to be HKD 0.14 and HKD 0.15, respectively [2][11] - The report adjusts the target price to HKD 2.43 based on the improved clarity in sales volume and price expectations for 2026, switching the valuation year from 2025 to 2026 [2][11] Revenue and Profitability Metrics - The projected revenue for the fiscal years 2023 to 2027 is as follows: HKD 7,363 million, HKD 8,624 million, HKD 7,838 million, HKD 8,724 million, and HKD 9,701 million, respectively [4][12] - The projected net profit attributable to the parent company for the same period is HKD 497.10 million, HKD 341.98 million, HKD 638.11 million, HKD 1,028 million, and HKD 1,135 million, respectively [4][12] - The report indicates a significant increase in profitability metrics, with a projected return on equity (ROE) of 20.97% in 2026 [4][12]