Huachuang Securities·2024-04-23 10:32Investment Rating - The report maintains a "Recommended" investment rating for Zijin Mining [1][2]. Core Views - The company's performance exceeded expectations, with significant increases in gold and copper production alongside cost reductions, leading to a notable increase in profitability [1]. - The average selling prices for gold and copper have risen, contributing to improved gross margins, while operational costs, particularly for overseas projects, have decreased [1]. - The company is expected to benefit from continued price increases in gold and copper in the second quarter of 2024, with projected revenue and profit growth for the coming years [1]. Financial Performance Summary - In Q1 2024, Zijin Mining achieved operating revenue of 747.77 billion yuan, a slight decrease of 0.22% year-on-year, but a 9% increase quarter-on-quarter. The net profit attributable to shareholders was 62.61 billion yuan, up 15.05% year-on-year and 26% quarter-on-quarter [1]. - Key production figures include: - Gold production: 16.8 tons, up 5.3% year-on-year - Copper production: 262,600 tons, up 5.2% year-on-year - Zinc production: 98,000 tons, down 8.5% year-on-year - Silver production: 102 tons, down 3.4% year-on-year [1]. - The average selling prices for key products in Q1 2024 were: - Gold: 458 yuan/gram, up 18.2% year-on-year - Copper: 66,600 yuan/ton, up 27% year-on-year - Zinc: 12,000 yuan/ton, down 0.8% year-on-year - Silver: 3.93 yuan/gram, up 8.3% year-on-year [1]. Future Projections - Revenue projections for 2024-2026 are as follows: - 2024: 318.21 billion yuan (8.5% growth) - 2025: 349.72 billion yuan (9.9% growth) - 2026: 383.67 billion yuan (9.7% growth) [1]. - Net profit projections for the same period are: - 2024: 26.99 billion yuan (27.8% growth) - 2025: 33.92 billion yuan (25.7% growth) - 2026: 41.82 billion yuan (23.3% growth) [1]. Valuation - The target market capitalization for Zijin Mining is estimated at 539.7 billion yuan, with a target stock price of 20.50 yuan, indicating a potential upside of 15% from the current price [1].