TNMG(SZ:000630) Huachuang Securities·2024-04-29 13:31Investment Rating - The report maintains a "Recommended" rating for Tongling Nonferrous Metals Group Co., Ltd. with a target price of 5.1 CNY [2][4]. Core Views - The company's 2023 performance was impacted by increased taxes and expenses due to the acquisition of China Railway Construction Copper Crown, leading to a net profit decrease of 35.49% year-on-year [2]. - In Q1 2024, the company benefited from rising copper prices, achieving a net profit increase of 7.39% year-on-year [2]. - The company is expected to see significant profit growth in the coming years, with projected net profits of 4.035 billion CNY, 4.417 billion CNY, and 5.034 billion CNY for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 49.5%, 9.5%, and 14% [2][5]. Financial Performance Summary - In 2023, the company reported total revenue of 137.454 billion CNY, a year-on-year increase of 12.81%, while net profit was 2.699 billion CNY, a decrease of 35.49% [2][5]. - For Q1 2024, the company achieved revenue of 32.72 billion CNY, a decrease of 4.71% year-on-year, but net profit rose to 1.097 billion CNY, an increase of 7.39% [2]. - The company’s gross margin improved to 8.32% in Q1 2024, up 3.47 percentage points year-on-year, driven by higher copper prices [2]. Production and Resource Development - In 2023, the company produced 1.7563 million tons of cathode copper, a year-on-year increase of 7.83%, accounting for 13.52% of domestic production [2]. - The company is set to launch a lithium battery copper foil project with an annual capacity of 25,000 tons, expected to reach 80,000 tons in the first half of 2024, further solidifying its industry leadership [2]. - The integration of China Railway Construction Copper Crown is expected to enhance the company's self-sufficiency in copper concentrate, with a significant increase in self-produced copper concentrate output [2].