Key points of investment
Incident: Tin Industry Co., Ltd. released its 2023 annual report. In 2023, the company achieved net profit attributable to shareholders of listed companies of 1,408 billion yuan, an increase of 4.61% over the same period of the previous year; realized operating income of 42.359 billion yuan, a decrease of 18.54% over the same period last year.
2023 metal prices: weak tin and zinc drag down performance
The average price of tin was 212,000 yuan/ton, -14.9% year-on-year. The average price of copper was 68,400 yuan/ton, +1.34% year-on-year. The average price of zinc was 21,600 yuan/ton, -14.39% year-on-year. The year-on-year decline in tin and zinc prices dragged down the company's performance.
Production: The growth rate of mineral zinc is obvious, and tin ingot production remains stable
Mining side: The company produced about 32,000 tons of raw tin ore metal in 2023, -7.05% over the same period last year. Copper raw ore metal was 30,600 tons, -3.2% year over year. Zinc raw ore metal was 122,600 tons, +16.57% year over year.
Smelting end: The company produced a total of 80,000 tons of tin metal. By structure: In 2023, 65,700 tons of tin ingots were produced, +42.61% year-on-year. It produced 11,200 tons of tin, or -57.84% year-on-year. Produced 0.66 million tons of tin chemical products, -69.67% year-on-year.
It produced 129,300 tons of copper products, an increase of 2.74% over the previous year. Zinc products were 135,800 tons, -0.43% YoY.
Reserves: Abundant resources, prospecting is progressing steadily
As of December 31, 2023, the company's reserves of various metals: 261 million tons of ore, 646,400 tons of tin, 1,167,200 tons of copper, 3.7628 million tons of zinc, 4,945 tons of indium, 77,500 tons of tungsten trioxide, 95,400 tons of lead metal, and 2,491 tons of silver. Subsidiary mining units invested a total of 84.9 million yuan in exploration expenses in 2023. Amount of additional non-ferrous metal resources added throughout the year: 14,000 tons of tin and 27,000 tons of copper? The situation related to the three fees: Various fees continue to be at a low level
In 2023, the company's sales expenses ratio was 0.19% (2022 0.18%), management expenses rate 2.45% (2022 2.21%), and financial expenses 1.03% (1.05% in 2022).
2024 production plan:
Budget revenue of 40.3 billion yuan for the full year of 2024 (taking into account supply chain business compression). Total production of non-ferrous metals: 348,600 tons, including: 85,000 tons of products containing tin, 130,000 tons of copper, 131,600 tons of zinc, and 77.81 tons of indium ingots.
Profit Forecast and Valuation:
The company is one of the leading companies in the tin industry and has a stable position in the industry. Due to the current rise in tin prices compared to the average price in 2023, we expect the company's net profit to be 1,818 billion yuan, 1,893 billion yuan, and 1,946 billion yuan respectively in 2024-2026, +29.05%, +4.17%, and +2.79%, respectively. EPS was 1.10/1.15/1.18 yuan respectively, and the corresponding PE was 14.92/14.33/ 13.94 times, respectively, maintaining the company's purchase rating.