Key points of investment:
The company announced its 2023 results, and the results were in line with expectations. According to the company's announcement, the company's revenue in 2023 increased 7.7% year on year to 186.2 billion yuan, of which mining side revenue increased 75.4% year on year to 44.518 billion yuan, and the company's net profit to mother in 2023 increased 36% year on year to 8.25 billion yuan. The performance was in line with expectations.
Copper and cobalt production was successfully released, driving a significant increase in mine-side revenue. According to the company's announcement, TFM and KFM, two world-class mines operated by the company in the Democratic Republic of the Congo (DRC), achieved operating revenue of 28 billion yuan in 2023, an increase of 187.2% over the previous year. In 2023, TFM copper production was 283,300 tons, and cobalt production was 21,700 tons; KFM copper production was 113,700 tons, and cobalt production was 33,900 tons.
Clarify 2024 production guidelines and explore resource potential for further growth. According to the company announcement, the company clarified the production plan for various products in 2024, including copper production guidelines of 520,000 to 570,000 tons, cobalt metal production guidelines of 60,000 to 67,000 tons, molybdenum production guidelines of 12,000 to 15,000 tons, tungsten metal production guidelines of 0.65 to 0.75 million tons, tungsten metal production guidelines of 90,000 to 10,000 tons, and phosphate fertilizer of 1.05 to 1.25 million tons. According to the company's announcement, TFM reserves are 7.498 million tons of copper and 770,000 tons of cobalt, with resources of 303.61 million tons of copper and 3.341 million tons of cobalt; KFM reserves are 1.71 million tons of copper and 670,000 tons of cobalt, with resources of 4.07 million tons of copper and 1.905 million tons of cobalt. The company's existing mine potential is sufficient. Future plans will transform resource advantages into production capacity advantages, launch TFM Phase III and KFM Phase II expansion projects in due course, and further exploration of resource potential is expected to drive the company's further growth.
Maintain profit forecasts and maintain buying ratings. The production of the company's TFM hybrid mine and KFM copper-cobalt ore was successfully released in 2023. Considering that the TFM and KFM mining areas are rich in resources and have potential for deep excavation in the future, according to the company announcement, the company is currently considering starting TFM phase III and KFM phase II expansion projects in due course. Therefore, we predict that the company's copper production will continue to grow in 2026, adding a profit forecast for 2026. Net profit from 2024-2026 is expected to be 104/115.2/13.41 billion yuan. The 2024 PE and PB valuations are lower than the average of comparable companies , maintaining the buy rating.
Risk warning: risk of a decline in global economic growth, risk of territorial policies for overseas resources