YCC(SZ:000878) Guoxin Securities·2025-09-29 09:50Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1]. Core Views - The company is a leading domestic copper smelting enterprise with a robust profit model and a significant asset injection from its major shareholder [3]. - The company has a well-structured mining segment, with the main asset being the Pulang Copper Mine, which has a stable annual copper production of 35,000 to 40,000 tons [3]. - The company is set to enhance its resource reserves and industrial layout through the acquisition of a 40% stake in Liangshan Mining, which will increase its copper production capacity significantly [3]. - The company is positioned to benefit from the anticipated recovery in copper prices and has a strong profit outlook for the coming years [3]. Company Overview - Yunnan Copper Industry Co., Ltd. is a state-owned enterprise established in 1958, originally part of China's first five-year plan [11]. - The company is the only publicly listed platform for the copper segment under the Aluminum Corporation of China (Chinalco) [16]. - The company has a total copper smelting capacity of 140,000 tons, ranking third in China, with significant production facilities located in Yunnan, Inner Mongolia, and Fujian [60]. Business Analysis - The company has a complete industrial chain in copper and related non-ferrous metals, including exploration, mining, and smelting [17]. - The main revenue source is from cathode copper, followed by by-products such as sulfuric acid and precious metals [17]. - The company has a total copper resource reserve of 470,000 tons, with the Pulang Copper Mine accounting for 60% of this reserve [3][24]. Profit Forecast and Investment Suggestions - Revenue projections for 2025-2027 are estimated at 201.8 billion, 209 billion, and 209 billion yuan, respectively, with net profits of 2.297 billion, 2.412 billion, and 3.912 billion yuan [3]. - The estimated earnings per share (EPS) for 2025, 2026, and 2027 are 1.15, 0.99, and 1.61 yuan, respectively [3]. - The company is expected to achieve a reasonable valuation range of 18.4 to 20.7 yuan per share, indicating a potential premium of 15% to 29% over the current market value [3].