Western Mining(SH:601168) Haitong Securities·2024-02-21 16:00Investment Rating - The investment rating for the company is "Outperform the Market" [1][4][13] Core Views - The company is a leading mining enterprise in the western region of China, primarily engaged in non-ferrous metal mining, with significant advantages in resource endowment and production capacity [4][6] - The company has a strong track record of high dividend payouts, providing a safety margin for investors [4][9] - The company is expected to benefit from the recovery in domestic demand for industrial metals, driven by government stimulus policies [4][6] Summary by Sections Company Overview - The company is a state-controlled listed entity in Qinghai Province, with the largest non-ferrous metal mining operations in the western region of China [4][6] - It operates 14 mines, including 7 non-ferrous metal mines, 6 iron and polymetallic mines, and 1 salt lake mine, with substantial resource reserves [4][6] Resource Endowment - As of June 30, 2023, the company holds copper reserves of 6.18 million tons, lead reserves of 1.65 million tons, zinc reserves of 2.88 million tons, molybdenum reserves of 37,000 tons, iron ore reserves of 259 million tons, and magnesium chloride reserves of 30.46 million tons [4][6] Key Projects - The Yulong Copper Mine expansion project is expected to increase copper production from 120,000 tons to 150,000 tons annually [4][6] - The Shuangli Mining No. 2 iron mine expansion is designed to produce 3 million tons of iron ore and 200,000 tons of copper ore annually [4][6] Dividend Policy - Since its listing in 2007, the company has implemented dividends 15 times, with a cumulative cash dividend of 7.149 billion yuan and an average payout ratio of 50.18% [4][9] Earnings Forecast and Valuation - The company is projected to have earnings per share (EPS) of 1.28, 1.54, and 1.64 yuan for the years 2023, 2024, and 2025, respectively [4][9] - The estimated reasonable value range for the stock is between 18.44 and 19.98 yuan per share, based on a price-to-earnings (PE) ratio of 12-13 times for 2024 [4][9]