ZHUYE GP(600961) 东方证券·2024-03-26 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of 14.63 CNY based on a 19x P/E ratio for 2024 [3][158]. Core Insights - The company is a leading player in the domestic lead-zinc smelting industry, with the largest production scale in China, accounting for approximately 10% of the national zinc capacity [2][20]. - The acquisition of Shuikoushan Co. has transformed the company from a lead-zinc smelting enterprise to a resource-oriented company, significantly enhancing its profitability [2][57]. - The company has a high market share in traditional zinc smelting, with advanced energy consumption levels compared to industry standards [2][38]. - There are expectations for potential future resource injections from subsidiaries of China Minmetals, which could further enhance profitability [2][149]. Financial Summary - The company’s revenue is projected to grow from 22,038 million CNY in 2023 to 25,143 million CNY in 2025, with a significant increase in net profit from 648 million CNY in 2023 to 933 million CNY in 2025 [3][151]. - The net profit margin is expected to rise from 2.9% in 2023 to 3.7% in 2025, reflecting improved operational efficiency [3][151]. - The earnings per share (EPS) are forecasted to be 0.60 CNY in 2023, increasing to 0.87 CNY by 2025 [3][151]. Industry Context - The demand for zinc smelting is expected to remain resilient due to ongoing infrastructure investments, which account for over 56% of the downstream market [2][101]. - The company’s energy consumption for zinc smelting is at 893.61 kgce/t, which is below the industry advanced value of 1,150 kgce/t, indicating operational efficiency [2][126]. - The company is positioned to benefit from the anticipated recovery in the macroeconomic environment and the expected decline in interest rates in 2024, which may support higher gold prices [2][57].