CHINA TUNGSTEN HIGHT(SZ:000657) Minsheng Securities·2025-10-31 08:06Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expected price increase of over 15% relative to the benchmark index within the next 12 months [5][11]. Core Insights - The company reported a revenue of 12.755 billion yuan for the first three quarters of 2025, a year-on-year increase of 13.39%, and a net profit attributable to shareholders of 846 million yuan, up 18.26% year-on-year. The non-recurring net profit reached 781 million yuan, showing a significant increase of 407.52% year-on-year [1]. - The company benefits from stable production at its upstream resource site, Shizhu Garden, which is the largest single tungsten mine in the world. The production of tungsten concentrate is expected to reach 0.78 million tons in 2024 and 0.42 million tons in the first half of 2025 [1][2]. - The acquisition of Yuanjing Tungsten Industry is expected to enhance the company's self-sufficiency rate in tungsten production, with a planned cash purchase of 99.9733% equity for 821 million yuan [2][3]. Summary by Sections Financial Performance - For Q3 2025, the company achieved a revenue of 4.906 billion yuan, a year-on-year increase of 34.98% and a quarter-on-quarter increase of 10.08%. The net profit attributable to shareholders was 335 million yuan, up 36.53% year-on-year and 15.91% quarter-on-quarter [1]. - The projected revenues for 2025-2027 are 17.63 billion yuan, 20.12 billion yuan, and 22.44 billion yuan, respectively, with corresponding net profits of 1.426 billion yuan, 2.235 billion yuan, and 2.706 billion yuan [4][8]. Production and Capacity Expansion - The company is expanding its micro-drill production capacity to meet the growing demand driven by AI applications, with plans to increase capacity by 140 million units [2][3]. - The self-sufficiency rate for tungsten is expected to rise from 20% to approximately 70% due to the integration of additional mining resources [3]. Market Outlook - The report anticipates continued growth in the PCB micro-drill market, driven by AI and other emerging technologies, positioning the company as a leading supplier in this sector [3]. - The projected price for tungsten concentrate is approximately 225,000 yuan per ton, reflecting a 41% increase quarter-on-quarter, which is expected to positively impact the company's profitability [1][2].