Chihong Zinc(600497) 广发证券·2024-05-09 08:32Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 7.54 CNY per share based on a 17x PE for 2024 [3][8]. Core Insights - In Q1 2024, the company's net profit attributable to shareholders was 4.9 billion CNY, a turnaround from a loss of 6.9 billion CNY in the previous quarter, aligning with expectations. Revenue for the quarter was 47 billion CNY, down 20% year-on-year and 16% quarter-on-quarter [1][2]. - The report highlights that the stability in lead, zinc, and germanium prices contributed to the company's performance, with production levels remaining stable. The average prices for zinc, lead, silver, and germanium were 20,982 CNY/ton, 16,179 CNY/ton, 6,023 CNY/kg, and 9,394 CNY/kg respectively [1][2]. - The company is expected to see production increases from its mining operations, with the Xinhu Mining Dongzhongla Phase I projected to commence production in June 2024, and Qinghai Hongxin becoming a wholly-owned subsidiary in January 2024 [1]. Financial Summary - The company reported a revenue of 21,900 million CNY in 2022, with a slight increase to 21,954 million CNY in 2023, and projected revenues of 22,610 million CNY for 2024, reflecting a growth rate of 3% [2][6]. - The net profit attributable to shareholders is forecasted to grow significantly from 1,433 million CNY in 2023 to 2,258 million CNY in 2024, representing a growth rate of 57.6% [2][6]. - Earnings per share (EPS) are expected to increase from 0.28 CNY in 2023 to 0.44 CNY in 2024, with a projected PE ratio of 12.20 for 2024 [2][6].