occurrences
On April 25, the company released its 2024 quarterly report. In 2024, the company achieved revenue of 2,867 billion yuan, +7.04% month-on-month and +8.43%; net profit to mother was 633 million yuan, -16.94% month-on-month, -23.95% year-on-year; net profit without return to mother was 630 million yuan, -1.72% month-on-month and -23.99% year-on-year.
reviews
Sales were generally flat, and performance was in line with expectations. The price of 2024Q1 molybdenum concentrate was 3,328 yuan/ton, +7%/-30% month/year over year respectively. We estimate that in 2024Q1, the company's molybdenum sales volume was +0.36% month-on-month, which was basically the same. Q1 The company's gross profit was -3.65% month-on-month to 1,241 billion yuan. We believe that production from self-produced mines may have declined month-on-month due to the Spring Festival holiday, which in turn slightly affected overall gross profit. Considering Q1's non-recurring revenue of -83.00% month-on-month to $0.05 billion, net profit due to the month-on-month decline was relatively large, and net profit after deduction of non-return to mother was basically flat and basically in line with expectations; while 2023Q1 was the highest point of molybdenum prices in nearly 10 years, so when the company's overall production did not change, and costs fluctuated little due to stable mine operations, the 2024Q1 net profit declined even more year-on-year.
Expense management continues to improve, and the balance ratio continues to decline. The company's rate for the 2024Q1 period was -5.18pct to 5.65% month-on-month. Among them, the sales rate was -0.20pct to 0.24% month-on-month; the management rate was -0.99pct to 3.94% month-on-month; the R&D rate was -3.72pct to 1.85% month-on-month; and financial expenses fell by 0800 million yuan to -011 million yuan month-on-month, indicating a decrease in the company's exchange losses. Overall expenses were improved during the period, and profitability was enhanced. 2024Q1's balance ratio was 10.59%, down 2.95 pct and 0.62 pct from the end of 2022 and the end of 2023, respectively; the company's balance ratio was already at a low level and the capital structure continued to be optimized.
Higher molybdenum prices have improved performance, and high dividends have increased investment value. As of March 2024, the volume of ferromolybdenum steel was 412,000 tons, +187% year-on-year. The high growth in steel procurement directly proves that demand for molybdenum is strong. Considering that demand for molybdenum terminals is fueled, the boom in shipbuilding and steel structures is expected to continue, overseas growth is limited, and large domestic mine increases are concentrated in 2026 and beyond, and progress is still highly uncertain. Molybdenum supply and demand are expected to continue to rise, and molybdenum prices are expected to continue to rise. As a scarce, highly elastic molybdenum resource target, the company is expected to fully benefit. Moreover, the company's dividend ratio is significantly higher than that of its non-ferrous metal peers, and strong performance is expected to further increase investment value.
Profit Forecasts, Valuations, and Ratings
The company's revenue for 2024-2026 is estimated to be 120/125/13.4 billion yuan, and the net profit to be realized is 33.5/3.7 billion yuan, EPS is 1.01/1.08/1.14 yuan, respectively, and the corresponding PE is 11.8/11.1/10.4 times, respectively. Maintain a “buy” rating.
Risk warning
Product price fluctuation risk; safety and environmental management risk; element substitution risk.