“Mining+Trade” two-wheel drive boosts the company's rapid growth in performance. The company belongs to the non-ferrous metal ore mining and selection industry. It is mainly engaged in mining and processing businesses such as mining, selection, and metallurgy of basic metals and rare metals, and mineral trade. Currently, the company's main business is distributed in Asia, Africa, South America, Oceania and Europe. It is the world's leading producer of copper, cobalt, molybdenum, tungsten and niobium, as well as Brazil's leading producer of phosphate fertilizer. At the same time, the company's basic metals trading business ranks among the highest in the world. The company achieved revenue of 18.269 billion yuan in the full year of 2023, up 7.68% year on year, and achieved net profit of 8.250 billion yuan, up 35.98% year on year. 2023Q4 achieved net profit to mother of 5.807 billion yuan in a single quarter, an increase of 663.01% year on year. The company's “mining+trade” two-wheel drive development covers the five links of “exploration - mining - selection - metallurgy - trade”. On the mining side, the company has a complete layout of copper-cobalt-nickel-lithium new energy metals, molybdenum, tungsten, niobium strategic metals and phosphate fertilizer. Among them, copper, cobalt, molybdenum, tungsten, and niobium resources are the world's leading resources. As of 2023, the resources reached 34.64 million tons, 5.25 million tons, 110,000 tons, and 2.04 million tons, respectively, with annual revenue of 44.518 billion yuan. On the trade side, IXM covers more than 80 countries around the world, focusing on the trade of copper, zinc, lead and precious metal concentrates and refined copper, zinc and nickel, and has established a global logistics and warehousing system. In 2023, the trade sector achieved overall main business revenue of 141.463 billion yuan, of which 44.279 billion yuan was generated from concentrate products and 97.184 billion yuan from refined metals.
The company's copper, cobalt, niobium, and phosphorus production reached a record high. The production of tungsten and molybdenum maintains the global layout of the company's mines. It has operated 7 high-quality mines in China, Congo (Gold), and Brazil, including Donggobi Molybdenum Mine, ****gou Molybdenum Mine, Sandaozhuang Molybdenum Mine, TFM copper-cobalt mine, KFM copper-cobalt mine, Brazilian niobium mine, and Brazilian phosphate ore. In 2023, the production of all of the company's products increased. Among them, the production of copper, cobalt, niobium and phosphorus reached a record high, and the copper production volume was close to the 10th largest in the world, making it the world's largest producer of cobalt, while the production of molybdenum and tungsten remained leading in the world. By product, copper production (excluding NPM) is 394,400 tons, with sales volume of 38.98 million tons, achieving operating income of 24.595 million yuan, and an estimated output of 520,000 to 570,000 tons in 2024; cobalt production of 55,500 tons, with sales volume of 29,700 tons, achieving operating income of 3.406 billion yuan, estimated output of 60,000 to 70,000 tons in 2024; 15.6 million tons of molybdenum and 15,600 tons of sales, achieving operating income of 7.131 billion yuan, with an estimated output of 12,000 to 15,000 tons in 2024; and 7975 tons of tungsten. Sales volume is 7871 tons, achieving operating income of 1,480 million yuan, and is expected to produce 6,500 to 7,500 tons in 2024; production of niobium is 9515 tons, with sales volume of 9378 tons, achieving operating income of 2,628 billion yuan, and expected output of 9,000 to 10,000 tons in 2024; phosphate fertilizer production, 1.163,500 tons, achieving revenue of 3.696 billion yuan, and an estimated output of 10.5 to 1.25 million tons in 2024.
IXM is deeply involved in the mineral trading industry. Implementing management changes to help improve efficiency IXM is the world's leading basic metals trader. Its main trading products include concentrates such as copper, lead, and zinc, intermediate products such as nickel, cobalt, niobium, and lithium, as well as refined metals such as copper, aluminum, zinc, and nickel, and a small amount of precious metal concentrates. As a unique platform focusing on key metals, IXM has been in operation for over 17 years. IXM and its member organizations have formed a global metal trade network, covering more than 80 countries around the world. The main business regions include China, Latin America, North America and Europe, and have also built a global logistics and warehousing system, and its products are mainly sold to Asia and Europe. In 2023, IXM's management changes were implemented to help improve efficiency and achieve net profit of 913 million yuan to mother, the highest level in history. According to regional divisions, domestic mineral trade achieved revenue of 50.581 billion yuan, accounting for 36%; overseas mineral trade achieved revenue of 90.882 billion yuan, accounting for 64%.
Over the years, IXM has been deeply involved in the mineral trading industry and has established a good reputation, building certain industry barriers.
The company has strong resource endowments and comprehensively improves the layout of various types of metals
The company's mines are all world-class resources. The Democratic Republic of the Congo (Gold) TFM is one of the world's largest copper-cobalt mines, KFM is the world's largest cobalt mine, Brazil's niobium mine is the second-largest niobium mine in the world, and the Sandaozhuang molybdenum and tungsten mine in China is one of the largest molybdenum ore fields in the world. In 2024, the Democratic Republic of the Congo (Gold) mining area was a “booster” for the company's efforts to rank among the top ten copper producers in the world. Among them, the KFM copper-cobalt mine, the company indirectly holds 71.25% of the equity. The total investment of the KFM project was 1.83 billion US dollars. Early output benefits were achieved in the first quarter of 2023, and production was reached as soon as it was put into operation in the second quarter. It produced 114,000 tons of copper and 34,000 tons of cobalt throughout the year, achieving a net profit of 1.66 billion yuan. In the TFM copper-cobalt mine, the company indirectly holds 80% of the equity, and the total investment of the TFM project was 2.51 billion US dollars. In 2023, it successfully completed the construction of three production lines for the Central Region Hybrid Mine, the Eastern Region Oxide Ore and the Mixed Mine. Currently, it has 5 copper-cobalt production lines, forming an annual production capacity of 450,000 tons of copper and 37,000 tons of cobalt, and achieved a net profit of 1.94 billion yuan in 2023. Additionally, the company indirectly holds 100% interest in Brazil's CIL phosphate business and NML niobium mine. The company sold 80% interest in the NPM copper and gold mine in 2023, and obtained mining rights for two lithium salt lakes in Bolivia with the Ningde Era consortium, thus achieving a complete layout of new energy metals copper-cobalt-nickel-lithium.
Profitability continues to improve, and the company is on the fast track of development
In 2023, the company's gross sales margin was 9.72%, up 0.43pct from the same period in 2022; the net sales margin was 4.58%, up 0.42pct from the same period in 2022. In terms of the period cost ratio, the financial cost rate and management cost ratio were high. The two increased by 0.57 pct and 0.24 pct, respectively, compared with the same period. The sales cost rate and R&D expense ratio were relatively stable. The sales cost rate increased by 0.02 pct over the same period, and the R&D cost rate decreased by 0.04 pct compared to the same period. The company has a strong technology research and development team. Comprehensive recycling technology for companion ore can achieve comprehensive recovery of associated resources such as tungsten, copper, iron, fluorite, and rhenium from molybdenum tailings, and pioneered the recycling of similar low-grade companion ores in the world; the company pioneered the application of 5G technology and driverless driving to build the first smart mine in China, increasing production efficiency by more than 40%. From 2020 to 2023, the company's R&D expenses were 174 million yuan, 272 million yuan, 389 million yuan and 327 million yuan respectively.
Investment advice and profit forecasting
National industrial upgrading and global energy transformation have boosted demand for related metals. The company has strong resource endowments to extend the mining industry chain through a modern mining model combining “mining+trade”; reduce costs through resource integration, give full play to IXM's global information advantages, and expand the layout of the global resources field; and enhance the company's pricing power for key mineral products as its position and influence in the global mineral resources field continues to improve. We expect that in 2024-2026, the company's net profit will be 105.72, 122.99, and 13.236 billion yuan, respectively. According to the latest share capital estimates, the corresponding basic earnings per share are: 0.49, 0.57, and 0.61 yuan/share, respectively. According to the latest stock price estimates, the corresponding PE valuations are 18.08, 15.54, and 14.44 times, respectively, giving the company an “increase in holdings” investment rating.
Risk warning
Major product price fluctuation risk, geopolitical and policy risk, safety, environmental protection and natural disaster risk, market risk.