SJI(SZ:000975) Haitong Securities·2024-02-26 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][6]. Core Views - The company plans to acquire Osino Resource at a price of CAD 1.90 per share, totaling approximately CAD 368 million (around CNY 1.961 billion) [6]. - Osino Resource has significant mining resources, including the Twin Hills project with gold reserves of 66.86 tons and an average grade of 1.04 g/t, and the Ondundu project with inferred resources of 27.99 tons [6]. - The company aims for an annual production capacity of 5 tons, with the project expected to commence production in 2026 [6][7]. - The acquisition aligns with the company's strategic development plan, targeting a gold production of 15 tons and resources of 300 tons by the end of 2026 [7]. - The company is expected to experience rapid profit growth over the next three years, with projected EPS of CNY 0.55, 0.62, and 0.85 for 2023, 2024, and 2025 respectively [7][8]. Financial Summary - Revenue is projected to grow from CNY 8,382 million in 2022 to CNY 11,529 million by 2025, with a year-on-year growth rate of 16.4% in 2025 [8][11]. - Net profit is expected to increase from CNY 1,124 million in 2022 to CNY 2,359 million in 2025, reflecting a growth rate of 37.8% in 2025 [8][11]. - The gross margin is anticipated to improve from 24.8% in 2022 to 36.9% in 2025 [11][12]. Valuation - The company is assigned a PE valuation of 26-27 times for 2024, corresponding to a reasonable value range of CNY 16.03 to 16.65 per share [7][8]. - The company’s financial metrics indicate a strong growth trajectory, with a projected net profit margin of 20.5% by 2025 [11].