ZANGGE MINING(SZ:000408) Western Securities·2025-07-23 05:12Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 59.72 CNY per share based on a 29x PE for 2025 [4][17]. Core Insights - The company is expected to achieve net profits of 31.88 billion, 40.07 billion, and 50.67 billion CNY from 2025 to 2027, with corresponding EPS of 2.03, 2.55, and 3.23 CNY [4][11]. - The report highlights the strategic advantages of the company's assets, including its holdings in the Chaqi Salt Lake and Jilong Copper Industry, and the favorable market conditions for lithium carbonate and copper prices [4][12]. Summary by Sections Short-term Outlook on Jilong Copper Industry - The company holds a 30.78% stake in Jilong Copper, which is expected to be the main source of net profit, contributing significantly to the company's earnings [12][41]. - After resource expansion, Jilong Copper is projected to become China's largest copper mine by resource volume, with annual copper production increasing from 154,000 tons in 2023 to approximately 300,000-350,000 tons post-expansion [12][13]. Mid-term Outlook on Potassium Chloride - Potassium chloride is deemed a strategic asset due to its implications for food security and national safety, with the company controlling scarce resources in the Chaqi Salt Lake and expanding into Laos [14][25]. - The global potassium supply is highly concentrated, with the top six countries accounting for over 85% of supply, while demand remains relatively inelastic, particularly in emerging Asian economies [14][15]. Long-term Outlook on Lithium Carbonate - The lithium market is currently experiencing low prices, with the company positioned to leverage its high-quality salt lake resources to establish a lithium platform under the Zijin Mining Group [15][27]. - The demand for lithium continues to grow, and the company is expected to benefit from new projects and capacity releases in China, with a focus on integrating its lithium business with Zijin's resources [15][16]. Financial Projections - Revenue is projected to reach 33.71 billion, 38.87 billion, and 49.42 billion CNY from 2025 to 2027, with growth rates of 3.70%, 15.29%, and 27.16% respectively [11][17]. - The company's gross margin is expected to improve gradually, reflecting better pricing and cost control in its potassium and lithium segments [11][17].