2024-02-27 16:00Investment Rating - The report maintains a "Buy" rating for Luoyang Molybdenum Co., Ltd. (603993) due to its relatively low valuation and expected recovery in the future [4][6]. Core Views - Luoyang Molybdenum is positioned as a continuously growing international mining company with a strong focus on copper, cobalt, molybdenum, niobium, and phosphate resources. The company has a history of strategic acquisitions to enhance its growth [4][11]. - The report highlights the valuation disparity between Chinese resource companies and their U.S. counterparts, suggesting that Luoyang Molybdenum is undervalued compared to companies like Freeport-McMoRan [6][31]. - The anticipated increase in production capacity from the TFM and KFM projects is expected to significantly boost copper and cobalt output, contributing to revenue growth [25][37]. Summary by Sections Market Data - Closing price: 6.13 CNY - Market capitalization: 108.291 billion CNY - Price-to-earnings ratio (PE): 2.4 [2]. Financial Performance - Forecasted net profit for 2023-2025: 6.86 billion CNY, 10.4 billion CNY, and 10.57 billion CNY, respectively, with corresponding PE ratios of 19, 13, and 13 [6][38]. - Revenue projections for 2023-2025 are 194.824 billion CNY, 233.252 billion CNY, and 251.923 billion CNY, with growth rates of 12.6%, 19.7%, and 8.0% [5][37]. Key Assumptions - Expected copper sales for 2023-2025: 200,000 tons, 550,000 tons, and 550,000 tons; cobalt sales: 20,000 tons, 40,000 tons, and 37,000 tons; molybdenum sales: 16,000 tons, 15,500 tons, and 15,500 tons [6][37]. - Anticipated copper prices (excluding VAT) for 2023-2025: 61,500 CNY/ton, 66,000 CNY/ton, and 66,000 CNY/ton; molybdenum prices (including VAT): 380,000 CNY/ton for all three years [6][37]. Industry Context - The report discusses the cyclical nature of the resource industry, noting that the peak of new copper mine production is nearing its end, which may limit future supply [4][6]. - It emphasizes that both Luoyang Molybdenum and Freeport-McMoRan are recognized for their long-term growth potential, despite the current valuation differences [6][31].