Sinomine(SZ:002738) KAIYUAN SECURITIES·2024-04-28 07:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company has shown initial success in cost reduction at Bikita and the acquisition of copper mines is expected to open a second growth curve [4] - The company experienced a significant decline in performance in 2023 due to a sharp drop in lithium salt prices, but Q1 2024 results showed improvement despite a 27.71% decrease in lithium salt prices [5] - The company is expected to stabilize its performance through cost reduction strategies and the new copper segment, with projected net profits for 2024-2026 being 15.17 billion, 16.79 billion, and 24.67 billion respectively [4] Financial Performance Summary - In 2023, the company achieved operating revenue of 6.01 billion, down 25% year-on-year, and a net profit of 2.21 billion, down 33% year-on-year [4][7] - For Q1 2024, the company reported operating revenue of 1.13 billion, down 46% year-on-year but up 12% quarter-on-quarter, with a net profit of 256 million, down 77% year-on-year but up 86% quarter-on-quarter [4][5] - The projected earnings per share (EPS) for 2024, 2025, and 2026 are 2.08, 2.30, and 3.38 respectively, with corresponding price-to-earnings (P/E) ratios of 16.6, 15.0, and 10.2 [4][7] Strategic Developments - The company has made significant investments in the copper sector, including the acquisition of Kitumba copper mine and Tsumeb smelter, which are expected to enhance its resource base and processing capacity [6] - The Tsumeb smelter's processing capacity is projected to increase from 260,000 tons per year to 370,000 tons per year through technical upgrades [6] Market Context - The company is navigating a challenging market environment characterized by fluctuating lithium prices and currency depreciation impacting financial costs [5] - The overall market sentiment remains cautious, but the company's strategic moves in cost management and diversification into copper are seen as positive indicators for future growth [4][5]