YTL(SZ:000960) EBSCN·2024-03-28 16:00Investment Rating - The report assigns an "Accumulate" rating for the company, indicating a positive outlook for investment [3][9]. Core Views - The company is a global leader in the tin industry, with the lowest market value per ton of tin in the sector. It is the only full industry chain company in the global tin sector, covering exploration, mining, selection, smelting, deep processing, and supply chain [2][24]. - Tin prices are expected to benefit from the semiconductor industry's recovery in 2024, with a strong correlation between tin prices and global semiconductor sales [2][8]. - The supply of tin is expected to remain tight due to the uncertain resumption of mining in Myanmar, which has historically contributed significantly to global tin supply [2][39]. Company Overview - The company has a complete layout in the tin industry chain and is recognized as the largest tin production and processing base in China. It has a significant market share in both domestic and global tin markets [14][20]. - As of December 31, 2022, the company held 667,000 tons of tin metal reserves, accounting for 14.5% of global reserves, and has the highest tin production globally [24][25]. - The company’s revenue from tin products constituted 34.7% of total revenue in 2022, with a gross profit contribution of 49.4% [18][20]. Financial Performance - The company’s projected revenues for 2023, 2024, and 2025 are 478.26 billion, 491.03 billion, and 504.54 billion CNY, respectively. The net profits for the same years are expected to be 15.22 billion, 18.92 billion, and 24.30 billion CNY [3][9]. - The current price-to-earnings (P/E) ratios are projected to be 16X, 13X, and 10X for the years 2023, 2024, and 2025, respectively, indicating a favorable valuation compared to industry peers [3][9]. Industry Analysis - The global tin supply is under pressure, with a static reserve-to-production ratio of 15 years, the lowest among major metals. The supply-demand balance is expected to show a deficit in the coming years [2][32][39]. - The demand for tin is anticipated to grow, driven by the semiconductor sector, which accounts for 40% of tin's downstream demand, alongside stable demand from traditional sectors such as tin chemicals and lead-acid batteries [2][43]. - The report highlights that the recovery in semiconductor demand and the growth in new energy applications will support the long-term price increase of tin [2][8].