ZANGGE MINING(SZ:000408) Changjiang Securities·2024-05-20 08:32Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company's strong performance in lithium carbonate operations and the significant contribution from the Jilong Copper Mine are highlighted as key profit sources [6][7]. Summary by Sections Financial Performance - In Q1 2024, the company achieved a net profit attributable to shareholders of 529 million yuan, a year-on-year decrease of 43% but a quarter-on-quarter increase of 17%. The net profit excluding non-recurring items was 578 million yuan, down 37% year-on-year and down 8% quarter-on-quarter [6]. Business Segments 1. Copper Segment: - The Jilong Copper Mine's investment income increased to 352 million yuan in Q1 2024, a year-on-year increase of 12% and a quarter-on-quarter increase of 27%. The copper production was 42,200 tons, with revenue of 2.97 billion yuan and a net profit of 1.144 billion yuan. Cost control measures have effectively reduced production costs [7]. 2. Lithium Segment: - The average price of battery-grade lithium carbonate was 101,500 yuan per ton in Q1 2024, down 28% quarter-on-quarter. However, the company benefited from a significant year-on-year increase in lithium carbonate production, which reached 2,386 tons, up 34% year-on-year, while sales surged to 3,970 tons, up 643% year-on-year [7]. 3. Potash Segment: - The production of potassium chloride was 158,600 tons, down 19% year-on-year and down 52% quarter-on-quarter. The sales volume was 139,600 tons, down 63% year-on-year and down 53% quarter-on-quarter. The domestic price of potassium chloride was approximately 2,512 yuan per ton, down 12% quarter-on-quarter [7]. Future Outlook - The company is positioned for significant growth in its three main business segments: copper, lithium, and potash. The Jilong Copper Mine is set to expand its production capacity significantly, with plans to increase to 350,000 tons per day. The lithium segment is also expected to see a substantial increase in production capacity, while the potash segment will benefit from cost advantages and stable profit contributions [8].