Introduction to this report:
The capital investment of Zijin Mining's wholly-owned subsidiaries recently increased their holdings of the company by a total of 10.815 million shares, accounting for 1.0004% of the company's total share capital. The Zijin secondary market continued to increase its holdings, and the stock ratio increased again.
Incidents:
Company announcement: Zijin Mining completed a 1% increase in holdings for the second time. Zijin Investment, a wholly-owned subsidiary of Zijin Mining, increased its holdings of the company by a total of 1,0815 million shares from November 13, 2023 to December 7, 2023 through centralized bidding, accounting for 1.0004% of the company's total share capital.
Commentary:
Maintain the “Overweight” rating. We believe that the company is actively deploying energy storage cells, energy storage system integration, and wind and landscape operations, and that the progress in transforming the new energy business has exceeded expectations. The predicted net profit for the company for 2023-2025 was 1,364, 17.98, and 2,341 billion yuan, respectively. The corresponding EPS was 1.26, 1.67, and 2.17 yuan, respectively, and the target price was maintained at 28.89 yuan, maintaining the “increase in holdings” rating.
The Zijin Secondary Market continues to increase its holdings, demonstrating confidence. 1) In early November 2023, Zijin Investment, a wholly-owned subsidiary of Zijin, increased its holdings by 1,495 million shares in the secondary market, accounting for 0.14% of the company's total share capital. 2) After this increase in holdings, Zijin Mining and its wholly-owned subsidiaries held a total of 182 million shares of Longjing shares, accounting for 16.8564% of the total share capital; in total, it controlled 289 million voting shares of the company, accounting for 26.7647% of the total share capital.
The new energy business is progressing rapidly. 1) Scenery business: The company has completed about 2 GW of index registration projects, and is currently promoting construction of nearly 1 GW. 2) Energy storage business: ① The Longjing Honeycomb Energy Storage Battery PACK and System Integration Project was completed and put into operation on August 28, 2023, with an additional energy storage contract reaching 1,235 billion yuan; ② The 5GWH lithium iron phosphate energy storage cell project plant in Shanghang County has been capped and is about to enter the equipment installation stage. 3) The company's various new energy businesses are progressing rapidly, and will continue to rely on the controlling shareholders' mining application scenarios to vigorously promote mining and smelting, wind, and storage clean energy businesses.
There are plenty of orders in the traditional environmental protection business. Under the trend of increasing new installed capacity for coal power, the company's dust collector business-related orders grew significantly in the first three quarters of 2023. The first three quarters of 2023 added 7.9 billion yuan in project contracts, and 19.9 billion yuan of ongoing construction contracts at the end of the period. Abundant on-going engineering contracts lay a solid foundation for the continued steady growth of the company's performance.
Risk warning: Flue gas equipment sales, solid and hazardous waste project management, new energy business expansion falling short of expectations, etc.