Guolian Securities·2024-05-08 08:30Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of 11.02 CNY, based on the current price of 8.83 CNY [2]. Core Views - The company reported significant growth in copper and cobalt production and sales in Q1 2024, with expectations for continued volume and price increases throughout the year [3][4]. - The company is optimistic about future copper price trends, supported by a widening supply-demand gap in 2024, which is expected to enhance profit elasticity [5]. - Cobalt prices have reached historical lows, but the company's cobalt gross margin remains stable, with expectations for demand growth driven by policies supporting new energy vehicles [6]. Financial Performance - In Q1 2024, the company achieved operating revenue of 46.121 billion CNY, a year-on-year increase of 4.15%. The net profit attributable to shareholders was 2.072 billion CNY, up 553.28% year-on-year, while the net profit excluding non-recurring items reached 2.091 billion CNY, reflecting a staggering increase of 3082.87% [3]. - The production volumes for copper and cobalt in Q1 2024 were 147,500 tons and 25,200 tons, respectively, representing year-on-year increases of 122.9% and 392.2%. Sales volumes for copper and cobalt were 125,500 tons and 24,300 tons, showing year-on-year growth of 4361% and 2387% [4]. - The company expects net profits for 2024-2026 to be 10.101 billion CNY, 11.524 billion CNY, and 12.604 billion CNY, respectively, with year-on-year growth rates of 22.44%, 14.09%, and 9.37% [7]. Valuation and Estimates - The company is projected to have an EPS of 0.47 CNY, 0.53 CNY, and 0.58 CNY for 2024, 2025, and 2026, respectively [7]. - The estimated P/E ratio for 2024 is 23.56, leading to a target price of 11.02 CNY, maintaining a "Buy" rating based on significant expected growth in copper production and favorable market conditions [7].