Group 1: Market Trends - The price of uranium has been recovering due to increased global nuclear energy policies, with CGN Mining (01164.HK) stock rising significantly, nearly 95% from its low of HKD 1.19 on April 9 to HKD 2.32 on July 11 [1] - In June, the Sprott Physical Uranium Trust (SPUT) revised its agreement with Canaccord Genuity to raise approximately USD 200 million for uranium procurement, allowing for the purchase of 1,012 tons of uranium, which is double the previously stated amount [1] Group 2: Policy Developments - The U.S. nuclear policy has shifted positively, with President Trump signing four executive orders to accelerate reactor testing and enhance uranium mining and enrichment capabilities [2] - Other countries, including Germany, Belgium, and Japan, have also expressed positive statements regarding nuclear energy development, contributing to an expected increase in global nuclear power demand and tightening uranium supply [2] Group 3: Company Performance - CGN Mining's average unit sales cost for natural uranium is between USD 68-74 per pound U3O8, while the average sales price is between USD 58-61 per pound U3O8, indicating a potential negative impact on gross profit due to accounting methods [3] - The new sales framework agreement with CGN Uranium has adjusted the base price from USD 61.78 to USD 94.22 per pound U3O8, with a higher proportion of spot prices, enhancing pricing flexibility [2][3] - Analysts believe that CGN Mining will benefit from rising uranium prices and the adjusted sales pricing mechanism, leading to a positive impact on performance and valuation [3]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5][10]. Core Views - The company is positioned as a core asset in uranium resources, benefiting from the global nuclear power recovery and a new long-term pricing mechanism that enhances performance expectations [5]. - Backed by China General Nuclear Power Group, the company has a leading global resource layout and long-term growth potential, being the only pure uranium listed company in East Asia [5][10]. - The company has a dual-driven model of "self-produced + international trade," which stabilizes growth and profitability [6]. Summary by Sections Market Performance - The closing price is HKD 2.26, with a market capitalization of HKD 17,177.54 million [3]. Financial Performance - The company achieved a revenue of HKD 86.24 billion in 2024, a year-on-year increase of 17%, with a net profit of HKD 3.42 billion [6][21]. - The projected net profits for 2025, 2026, and 2027 are HKD 5.73 billion, HKD 9.42 billion, and HKD 11.83 billion, reflecting growth rates of 67.5%, 64.4%, and 25.6% respectively [8][10]. Business Model - The business model consists of self-produced trade and international trade, with the international trade segment providing stable profit through price differences [19]. - The company holds a 49% equity stake in several uranium mines in Kazakhstan, ensuring a stable supply and cost advantage [5][41]. Pricing Mechanism - The new pricing mechanism for 2026-2028 includes a base price (BP) and spot price (SP) structure, with BP set to increase annually, enhancing profit margins [6][49]. Market Outlook - The global nuclear power revival is expected to drive uranium demand, with an average annual growth rate of over 4% from 2024 to 2040 [7]. - The company is well-positioned to benefit from the tightening supply of uranium due to high resource concentration and declining exploration investments [7]. Valuation - The company’s projected P/E ratio for 2026 is 18X, which is below the industry average of 29X, indicating potential undervaluation [10].