ZANGGE MINING(SZ:000408) Capital Securities·2024-03-27 16:00Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's main products have seen a price decline, leading to a decrease in performance for 2023. The company reported a revenue of 5.226 billion yuan, down 36.22% year-on-year, and a net profit attributable to shareholders of 3.420 billion yuan, down 39.52% year-on-year. The average selling price of potassium chloride was 2,709.64 yuan/ton, down 28.6%, and lithium carbonate was 216,900 yuan/ton, down 52.46% [5][6] - The company produced 1.0942 million tons of potassium chloride in 2023, exceeding its production plan by 109.42%, and sold 1.2934 million tons, achieving 107.78% of its sales plan. For lithium carbonate, it produced 12,062.5 tons, meeting 100.52% of its production plan, but sold only 10,314.5 tons, achieving 85.95% of its sales plan [5] - The first phase of the Mali Cuo Salt Lake lithium carbonate project, with a capacity of 50,000 tons, is expected to be operational by the end of 2024. The company currently has a potassium chloride production capacity of 2 million tons/year and a lithium carbonate production capacity of 10,000 tons/year, making it the second-largest potassium chloride producer and a leading lithium salt producer in China [5] - The second phase of the Julong Copper Mine expansion is expected to be operational by the end of 2025, with projected investment returns reaching new highs. The company holds a 30.78% stake in Julong Copper, which generated an investment income of approximately 1.296 billion yuan in 2023 [5] - The company is expected to achieve revenues of 3.659 billion yuan, 7.281 billion yuan, and 11.938 billion yuan for 2024, 2025, and 2026, respectively, with net profits of 2.770 billion yuan, 5.266 billion yuan, and 8.048 billion yuan, respectively. The corresponding EPS is projected to be 1.75, 3.33, and 5.09 [5][6] Summary by Sections Financial Performance - In 2023, the company reported a revenue of 5.226 billion yuan and a net profit of 3.420 billion yuan, with significant declines in both metrics compared to the previous year [5][6] - The company expects a revenue decrease of 29.98% in 2024, followed by a substantial recovery with an expected growth of 98.99% in 2025 and 63.95% in 2026 [6] Production and Sales - The company successfully exceeded its production and sales targets for potassium chloride in 2023, while lithium carbonate sales fell short of expectations [5] - Future production plans include 1 million tons of potassium chloride and 10,500 tons of battery-grade lithium carbonate in 2024 [5] Project Developments - The Mali Cuo Salt Lake lithium project and various exploration projects in Laos are progressing, indicating strong growth potential in lithium and potassium salt businesses [5] - The Julong Copper Mine expansion is set to significantly increase copper production capacity, enhancing investment returns [5]