ZANGGE MINING(SZ:000408) Great Wall Securities·2025-08-08 08:16Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [4][22]. Core Views - The company's performance is driven by rising prices of potassium chloride and stable operations at the Jilong Copper Mine, which is expected to contribute positively to future earnings [2][10]. - The Jilong Copper Mine's second phase is progressing well, with anticipated production capacity of 300,000 to 350,000 tons of copper per year upon completion, which will significantly enhance the company's revenue base [10][12]. - The company is also making strides in resource reserves, particularly with the Ma Mi Cuo lithium project, which is expected to improve its competitive position in the lithium market [11][12]. Financial Summary - The company's projected revenues for 2025-2027 are 34.65 billion, 41.29 billion, and 44.85 billion yuan, respectively, with year-on-year growth rates of 6.6%, 19.2%, and 8.6% [12]. - The expected net profits for the same period are 35.13 billion, 48.85 billion, and 60.81 billion yuan, with growth rates of 36.2%, 39.0%, and 24.5% [12]. - The latest diluted EPS estimates are 2.24, 3.11, and 3.87 yuan for 2025, 2026, and 2027, respectively [12]. Product Performance - In the first half of 2025, the company reported potassium chloride revenue of 1.399 billion yuan, a year-on-year increase of 24.6%, while lithium carbonate revenue was 267 million yuan, down 57.9% [2][3]. - The average selling price of potassium chloride was 2,845 yuan per ton, reflecting a year-on-year increase of 25.57% [3]. - The Jilong Copper Mine produced 92,800 tons of copper in the first half of 2025, contributing significantly to the company's profitability [10]. Cost and Cash Flow Analysis - The company's operating cash flow for the first half of 2025 was 834 million yuan, a year-on-year increase of 137.19% [9]. - The net cash flow from investment activities surged to 1.334 billion yuan, marking a substantial increase of 2,838.70% [9]. - The company's cash and cash equivalents at the end of the period reached 3.286 billion yuan, up 303.19% year-on-year [9]. Market Outlook - The report highlights a tightening supply of potassium chloride due to production cuts by major producers, which is expected to support price increases in the near term [3]. - The global copper market is experiencing a downward adjustment in supply forecasts, which may lead to upward pressure on copper prices [8].