TMD(SZ:000762) Huafu Securities·2024-06-02 07:00Investment Rating - The report assigns a "Buy" rating for the company with a current price of 20.56 CNY and a target price of 28.78 CNY [2]. Core Insights - The company is expected to achieve net profits of 162 million, 400 million, and 628 million CNY for the years 2024, 2025, and 2026 respectively, with year-on-year growth rates of -1%, +146%, and +57% [6]. - The company possesses significant cost advantages as one of the few owners of chromium and lithium resources in China, with substantial long-term potential as production capacity is under construction [6]. - The historical median PE ratio over the past two years is 37.5, leading to a market capitalization estimate of 15 billion CNY based on the 2025 net profit forecast [6]. Financial Data and Valuation - Revenue (in million CNY): 2022A: 2209, 2023A: 806, 2024E: 709, 2025E: 1338, 2026E: 1748 [10]. - Net Profit (in million CNY): 2022A: 795, 2023A: 164, 2024E: 162, 2025E: 400, 2026E: 628 [10]. - EPS (CNY/share): 2022A: 1.53, 2023A: 0.31, 2024E: 0.31, 2025E: 0.77, 2026E: 1.20 [10]. - PE Ratios: 2022A: 13.5, 2023A: 65.4, 2024E: 66.0, 2025E: 26.8, 2026E: 17.1 [10]. Market Position and Resource Insights - The company is a leader in lithium extraction from the Zabuye Salt Lake, with a projected production capacity exceeding 40,000 tons in the long term [41]. - The lithium price is expected to stabilize at high levels despite recent declines, due to supply-demand dynamics and cost curve adjustments [39]. - The company is strategically positioned in a market with high import dependency for chromium resources, as domestic supply is limited [60][67]. Industry Demand and Supply Dynamics - The demand for chromium is expected to recover as downstream steel mills show signs of improvement [68]. - The company is involved in the expansion of its chromium production capacity, with plans to increase output to 200,000 tons per year [79]. - The global chromium market is characterized by uneven resource distribution, with significant reliance on imports for domestic consumption [60][67]. Conclusion - The report highlights the company's strong financial outlook, strategic resource advantages, and favorable market conditions, supporting the "Buy" rating and indicating significant growth potential in the coming years [6][39][41].