TNMG(SZ:000630) Orient Securities·2025-11-20 12:34Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][7]. Core Views - The report highlights that the copper industry is expected to see a tightening supply-demand balance, with copper prices likely to rise due to increased demand from emerging sectors such as renewable energy and AI data centers. The company's expansion projects are anticipated to enhance its profitability and resource self-sufficiency [4][12][10]. Summary by Sections Company Overview - The company, Tongling Nonferrous Metals Group Co., Ltd., is one of the largest cathode copper producers in China, with a smelting capacity exceeding 1.7 million tons. It has developed a comprehensive copper industry chain covering resource exploration, smelting, and processing [20][21]. Copper Product Segment - The report indicates that the copper price is expected to rise, and there is a marginally positive outlook for smelting fees, which could enhance profit elasticity. The company is set to benefit from the expected increase in copper prices and improved smelting fees due to supply constraints [4][12][10]. - The Mirador copper mine expansion is projected to increase the company's copper concentrate self-sufficiency and reduce production costs, while the completion of the green intelligent copper-based new materials industrial park is expected to expand smelting capacity [4][12]. Other Segments - The company is focusing on high-end copper processing and precious metal resources, which are expected to drive profitability. The subsidiary, Tongguan Copper Foil, has been listed separately and is positioned to benefit from the rapid growth in the AI and electronic communication sectors [4][12]. - The precious metals segment, particularly gold, is expected to see a rise in both volume and price, supported by deteriorating dollar credit conditions [4][12]. Financial Forecast and Investment Recommendations - The company is projected to achieve earnings per share (EPS) of 0.27, 0.38, and 0.43 yuan for the years 2025 to 2027. Based on a comparable company PE of 16X for 2026, a target price of 6.08 yuan is set [5][7].