The company is a major domestic manufacturer of cathode copper and the largest domestic copper foil manufacturer. In 2022, the company produced 51,600 tons of copper concentrate, 1.628,700 tons of cathode copper, 390,000 tons of processed copper, 18.84 tons of gold, 512.5 tons of silver, 523,800 tons of sulfur concentrate, and 4.95538 million tons of sulfuric acid. Among them, cathode copper production accounts for 14.73% of the total domestic production, which is expected to rank second in the industry.
Resource injection for China Railway Jiantongguan World's oversized copper mine, a subsidiary of the Group. The company currently has 8 mines, including Dongguashan Copper Mine, Shaxi Copper Mine, and Anqing Copper Mine. The amount of copper resources and metals is about 1.86 million tons, with an output of 51,600 tons in 2022.
The Group's subsidiary (70% interest in China Railway Construction Copper Crown) has 6.03 million tons of copper resources in the world's large-scale copper mine Mirador Copper Mine, with an average grade of 0.48%. Currently, 90,000 tons of copper concentrate production capacity has been put into operation. The 2022 copper production capacity is 120,000 tons, 2.5 tons of gold, 32.8 tons of silver, operating income of 8.1 billion yuan, net profit of 1.8 billion yuan, total unit ore cost of 27.33 US dollars/ton. The second phase is expected to be put into operation in June 2025. At that time, the total copper concentrate production capacity of the project will reach 200,000 tons/year, with an average total ore production capacity of 200,000 tons/year. Cost 19.55 At USD/ton, the company's copper production will increase nearly 3 times, and the resource self-sufficiency rate will further increase.
The company's smelting scale is leading domestically, and its technical advantages are obvious. Through the layout of five major smelters, the company's technical level is at the forefront of the industry. The smelting base has a cathode copper production capacity of 1.88 million tons (including under construction), supporting sulfuric acid production capacity of 4.493 million tons, 16 tons of gold, 580 tons of silver, and 320,000 tons of anode plates. Among them, the branch Jinguan Copper has two plants, “Double Flash” and “Aolu”, with a total cathode copper production capacity of 680,000 tons; Jinlong Copper (61.4%) cathode copper production capacity of 450,000 tons; Zhangjiagang United Copper (85%) cathode copper production capacity of 300,000 tons; Chifeng Jintong Copper (50%) cathode copper has an annual production capacity of 450,000 tons, of which the second phase of the 200,000 ton electrolytic copper project is expected to be completed and put into operation in October 2025; branch copper metallurgy focuses on processing 80, 000 iron sulphide resources in the Group's internal mines 10,000 tons of sulfuric acid. In addition, the company's green smart copper-based new material project is being built in an orderly manner. The production capacity of high-end copper wire is estimated at 500,000 tons/year, and the by-product is 1.7 million tons/year of sulfuric acid.
The company has a rich variety of copper processing products, and the products are developing to high-end. As of 2022, the company has achieved an output of 390,000 copper processed materials, with a total production capacity of about 508,000 tons of copper processed materials. The total production capacity of copper processed materials is expected to exceed 576,000 tons in the future. With the construction of a green intelligent copper-based new material project, the company's copper processing material production capacity is expected to exceed 1 million tons. Among them, Copper Crown Copper Foil (72.38%) has completed listing on GEM, with a copper foil production capacity of 25,000 tons/year for lithium batteries, and the copper foil production capacity is expected to reach 80,000 tons/year; the branch Jinwei Copper has 100,000 tons/year of high-precision copper strips; Tongguan Electric (100%) is one of the largest production bases for enameled round copper wire and anode phosphor copper materials in China, forming an annual output of 60,000 tons of enameled wire, 30,000 tons of anodized phosphor copper and 220,000 tons of high-conductivity copper; Copper Crown Brass (75%) designs high-precision copper bars Production capacity 75,000 tons/year; Grissey's bronze crown (100%) owns High-precision copper tape is 6000 tons/year (of which 3000 tons/year is under construction).
Investment advice: Overseas resource injection has enabled the development of the company's entire copper industry chain. We expect the company to achieve net profit of 3.76 billion yuan, 4.17 billion yuan, and 4.94 billion yuan in 23-25, +37.7%/+11.0%/+18.5% over the same period last year.
We selected Jiangxi Copper, Luoyang Molybdenum, Zijin Mining, Yunnan Copper, Jinchengxin, and Western Mining as comparable companies. According to the average PE valuation value of 10.8 in 2024, we gave the company 11 times PE in 2024, corresponding to a target price of 3.62 yuan, with a target price increase of 10%, coverage for the first time, and gave it a “recommended” rating.
Risk warning: Project construction falls short of expectations; metal prices fluctuate greatly.