Core Viewpoint - Fujian Makeng Mining Co., Ltd. (referred to as "Makeng Mining") is advancing its IPO process, aiming to raise 1 billion yuan for expansion projects in iron ore mining [1][7] Company Overview - Makeng Mining is located in Longyan City, Fujian Province, a significant revolutionary area in China, and is engaged in iron ore resource development and comprehensive utilization, focusing on the mining and sales of iron ore, molybdenum concentrate, and limestone [4] - The company holds mining rights for the well-known Makeng Iron Mine, which has a total iron ore resource reserve of 330.39 million tons, along with associated molybdenum and limestone reserves [4] - Makeng Mining ranks 21st among the top 50 metallurgical mining enterprises in China for 2024 and has received accolades such as "National Green Mine" and "Top Ten Metallurgical Mines" [4] Industry Context - The steel industry is a crucial foundation of the national economy, and there is a consensus in the industry to reduce dependence on international iron ore supplies due to uncertainties [5] - The distribution of iron ore resources in China shows significant regional characteristics, leading to high transportation cost sensitivity, which influences the sales strategy of mining companies to focus on nearby steel enterprises [5] - Makeng Mining is a major player in the southeastern coastal region of China, with its iron ore production accounting for over 10% of the region's total output in 2023 [5] Financial Performance - The main revenue sources for Makeng Mining are the sales of iron concentrate and molybdenum concentrate, with stable operating performance and strong profitability from 2022 to the first half of 2025 [6] - The company's revenue figures for the respective years are 2.057 billion yuan, 1.962 billion yuan, 2.05 billion yuan, and 1.045 billion yuan, with net profits of 659 million yuan, 651 million yuan, 664 million yuan, and 362 million yuan [6] Future Plans - The company plans to use the proceeds from the IPO to fund the expansion of its iron ore mining capacity, aiming to add 5 million tons per year to its production capacity [7] - This expansion is expected to significantly enhance the company's operational efficiency and reduce the unit production costs of iron concentrate, thereby improving profitability and sustainability [7]

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [2]. Core Insights - The company reported a revenue of 3.025 billion yuan for the first three quarters of 2025, a year-on-year increase of 1.60%. However, the net profit attributable to shareholders decreased by 10.67% to 594 million yuan [5][18]. - The decline in performance is primarily attributed to the drop in iron concentrate prices, which fell by 10.59% year-on-year for the first three quarters [5][18]. - The company is focusing on its core iron ore business while developing lithium mining as a new growth driver, with significant resources and production capacity in both sectors [6][14]. Company Overview - The latest closing price of the company's stock is 15.04 yuan, with a total market capitalization of 22.7 billion yuan [4]. - The company has a debt-to-asset ratio of 57.8% and a price-to-earnings ratio of 29.49 [4]. Financial Performance - In Q3 2025, the company achieved a revenue of 1.053 billion yuan, with a net profit of 188 million yuan, reflecting a year-on-year increase of 4.88% in revenue but a decrease of 6.93% in net profit [5][18]. - The average price of iron concentrate decreased by 5.29% year-on-year in Q3 2025, although it showed a quarter-on-quarter increase of 3.35% [5][18]. Lithium Mining Development - The company owns two major lithium mines, with a total lithium resource of 530 million tons and a lithium carbonate equivalent of over 4.72 million tons [7][14]. - The Hunan Jijiashan lithium mine is set to invest 1.762 billion yuan in a project expected to process 20 million tons of multi-metal resources annually, with production anticipated to start in 2026 [7][15]. - The Sichuan Jiada lithium mine's extraction plan has been approved, aiming for an annual production capacity of 2.6 million tons, which can yield approximately 50,000 tons of lithium carbonate [7][15]. Profitability Outlook - The company expects steady growth in profitability, with projected revenues of 4.024 billion yuan in 2025, 4.322 billion yuan in 2026, and 5.018 billion yuan in 2027, reflecting year-on-year growth rates of 4.72%, 7.41%, and 16.10% respectively [9][11]. - The net profit attributable to shareholders is forecasted to be 799 million yuan in 2025, 859 million yuan in 2026, and 1.070 billion yuan in 2027, with corresponding growth rates of 6.41%, 7.44%, and 24.62% [9][11].