CGN MINING(HK:01164) HTSC·2025-08-21 06:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.43 [7]. Core Views - Despite a significant decline in net profit for the first half of 2025, the report anticipates a recovery in uranium prices in the second half of 2025, which could mitigate the one-time impacts affecting earnings [1][5]. - The approval of a new sales framework agreement for uranium sales from 2026 to 2028 is expected to significantly boost future earnings, with a substantial increase in benchmark prices [3][5]. - The report emphasizes the ongoing global nuclear energy revival driven by decarbonization goals, energy security needs, and geopolitical factors, which supports a positive long-term demand outlook for uranium [4]. Summary by Sections Financial Performance - The company expects a net profit of approximately -90 to -40 million HKD for the first half of 2025, a significant decline from 113 million HKD in the same period of 2024 [1]. - The unit sales cost for uranium in the first half of 2025 was between 68 to 74 USD/lbs, while the contract sales price was only 58 to 61 USD/lbs, resulting in a gross loss of 7 to 16 USD/lbs [2]. Sales Framework Agreement - The new sales agreement for 2026-2028 adjusts the pricing mechanism to 30% benchmark price and 70% spot price, with benchmark prices set to increase significantly from previous years [3]. Market Outlook - The report highlights various factors contributing to the nuclear energy revival, including policy changes in the US and Japan, and partnerships between tech companies and energy providers, which are expected to drive demand for nuclear power [4]. - The long-term outlook for uranium prices remains positive, with recent data indicating a month-on-month increase in long-term uranium prices [4]. Earnings Forecast - The report revises the net profit forecast for 2025 down by 51% to 348 million HKD, while maintaining optimistic projections for 2026 and 2027 with expected profits of 1,039 million HKD and 1,123 million HKD respectively [5][11].