CGN MINING(HK:01164) HTSC·2025-08-29 07:14Investment Rating - The investment rating for China General Nuclear Power Corporation (1164 HK) is maintained at "Buy" with a target price of HKD 3.01 [5]. Core Views - The report highlights an expected improvement in international trade contracts starting from the second half of 2025, driven by high-priced order deliveries and adjustments in signing strategies [3][10]. - The global natural uranium market is projected to remain tight, with a significant supply-demand gap anticipated by 2030, supporting a bullish outlook for uranium prices [10]. - The company's international trade business experienced a loss in the first half of 2025 due to one-time impacts, but profitability recovery is expected in the second half as high-priced contracts are delivered [3][10]. Summary by Sections Profit Forecast and Valuation - The company is expected to recover from a loss of HKD 0.68 billion in the first half of 2025, with projected net profits of HKD 3.48 billion, HKD 10.39 billion, and HKD 11.23 billion for 2025-2027, representing year-on-year growth of +1.84%, +198.42%, and +8.04% respectively [3]. - The estimated EPS for the same period is projected to be HKD 0.05, HKD 0.14, and HKD 0.15 [3]. - The target valuation for 2026 is set at 21.5x PE, with a target price of HKD 3.01 based on comparable company analysis [3]. Industry Trends - The global natural uranium market is expected to maintain a tight supply-demand balance, with a projected shortfall of 6,000 tons by 2030 and 31,000 tons by 2035 [10]. - The demand for nuclear power is anticipated to remain high, driven by China's nuclear approvals and the U.S. plans for new nuclear plants, alongside increasing electricity needs from AI [10]. - The report notes a resurgence in the spot uranium market since May, with long-term contract prices showing signs of increase, reflecting market expectations for future supply-demand gaps [10]. Company Trends - The international trade business's losses in the first half of 2025 were primarily due to price fluctuations in contracts and inventory cost accounting methods [10]. - The company has adjusted its signing strategy to shorten delivery cycles and mitigate risks associated with price volatility [10]. - The average selling price of contracts signed but not yet delivered is projected at USD 80.8 per pound, significantly higher than the average cost of inventory, indicating potential for profit growth [10].