TNMG(SZ:000630) Huaan Securities·2025-08-27 14:24Investment Rating - The investment rating for Tongling Nonferrous Metals is "Buy" [2] Core Viewpoints - Tongling Nonferrous Metals is an established copper enterprise with an integrated layout, continuously improving its resource self-sufficiency. The company has a complete industry chain from mining to smelting and processing, with significant production capacities in cathode copper and high-precision electronic copper foil [5][21]. - The company reported a revenue of 76.08 billion yuan in the first half of 2025, a year-on-year increase of 6.4%, while the net profit attributable to shareholders was 1.44 billion yuan, a decrease of 33.9% due to adjustments in overseas subsidiary dividend arrangements leading to increased tax expenses [5][18]. - The supply-demand imbalance in the copper market is expected to support copper prices, with domestic manufacturing PMI remaining stable and investments in the power grid showing growth [6][30]. Summary by Sections 1. Company Overview - Tongling Nonferrous Metals has a long history in copper mining, with a complete industry chain established through acquisitions and self-built resources. The company has upgraded its smelting technology and diversified into high-end copper foil production [16][18]. - The company is a major producer of cathode copper in China, with an annual production capacity exceeding 1.7 million tons and a significant contribution from copper products to its revenue and gross profit [21]. 2. Supply and Demand Dynamics - The copper market is experiencing a supply-demand imbalance, with tight copper ore supply and declining smelting fees leading to rising copper prices. The demand from traditional manufacturing and emerging sectors like AI data centers is expected to contribute to demand growth [6][30][36]. 3. Resource Self-Sufficiency Improvement - The Mirador copper mine has significantly increased the company's copper concentrate production, with self-sufficiency rates expected to improve further as the second phase of the project ramps up production [7][40]. The company is strategically located in East China, which enhances its transportation cost advantages [44]. 4. Profit Forecast and Valuation - The company is projected to achieve net profits of 3.36 billion yuan, 5.08 billion yuan, and 5.77 billion yuan for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 16.48, 10.90, and 9.60 [8][47]. The valuation is considered reasonable, with expectations of continued profit elasticity as production capacity increases [47].