Profile
Previous Close Price
Key Statistics
| Dec RMB m | 2021 | 2022f | 2023f |
|---|---|---|---|
| Revenue | 225,102 | 273,569 | 309,114 |
| Net Profit | 15,673 | 19,308 | 19,847 |
| Profit Gth (%) | 140.8 | 23.2 | 2.8 |
| PE (X) | 18.6x | 15.1x | 14.7x |
| Div Yield (%) | 1.8 | 2.2 | 2.2 |
| P/BV (X) | 4.1x | 3.5x | 3.0x |
Recent Developments
Our Views
Benefitting from strong gold and copper prices alongside volume growth. We revised up our FY24F/FY25F earnings forecasts by 20%/12%, respectively, after inputting higher copper/gold price forecasts. Its earnings in FY24F are expected to grow 25%, also supported by 6% and 11% growth in sales volume of mined copper and mined gold, respectively. Copper and gold will account for 59% and 33% of its gross profit (except trading business) in 2024, respectively.
Copper and gold prices are key catalysts. According to our sensitivity analysis, a 1% hike in copper and gold prices will boost its EPS by 0.9% and 0.5%, respectively. In addition, the acquisition of mines and commencement of production should impact its earnings and share prices. The company started producing lithium in 2023 after merging three lithium mines in 2022 and will increase output to 120k tonnes LCE (lithium carbonate equivalent) in 2025.
Retain BUY and raise TPs to RMB22.6/HKD22 for A/H share. Our TP for the A-share is derived from a DCF model using an 8.7% WACC and 4.5% terminal growth rate. Our TP for the H-share is derived by factoring in a 10% discount to its A-share TP, in line with its historical trading discount. Our TP of HKD22 implies an 8.6x PE and 2.2x P/BV based on FY24 earnings estimates.
Risks
Valuation
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