occurrences

On April 29, the company released its quarterly report for the year 24. In 1Q24, it achieved revenue of 18.023 billion yuan, +40.82% month-on-month, +7.33%; net profit to mother of 239 million yuan, reversal of losses month-on-month, -25.23% year-on-year; net profit without return to mother of 235 million yuan, reversing loss from month to month, -23.94% year-on-year.

reviews

It also boosts the company's profits by showing copper smelters. The company's revenue in '23 was 65.647 billion yuan, +18.42% year-on-year, and net profit to mother was 688 million yuan, or -43.27% year-on-year. (1) Lead and zinc: The average price of non-ferrous zinc in the Yangtze River was 21,600 yuan/ton in '23, -14.40%, and the average price of colored lead ingots in the Yangtze River was 15,600 yuan/ton, +2.58%. In '23, the company sold 262,200 tons of lead-zinc concentrate, -5.66% year-on-year; domestic lead-zinc mine output was 170,400 tons, -6.22% year-on-year; sales volume of smelted lead-zinc and zinc products was 441,200 tons, +24.69% year-on-year. Affected by the decline in lead-zinc concentrate sales, the gross profit of concentrate products was -46.53% to 503 million yuan in '23; the gross profit of lead-zinc smelting products was 1.2002 billion yuan, -18.73% year-on-year. (2) Copper: The average price of non-ferrous copper in the Yangtze River in '23 was 68,300 yuan/ton, +1.30% year over year, and TC for copper concentrate was 85.16 US dollars/ton per year, +9.67% year over year. In '23, the company sold 0.98 million tons of copper concentrate, +79.02% year-on-year. In '23, the company acquired 62.31% of CICC Copper's shares and actually held 39.26% of CICC Copper's shares. In '23, it produced 40.30 tons of electrolytic copper and sold 40.17 tons. During the 23-year consolidation period, CICC Copper achieved net profit of 552 million yuan and net profit of 217 million yuan to mother, which significantly increased the company's profit.

Q1 Performance recovered month-on-month, and cost management was optimized. In 1Q24, the average price of non-ferrous zinc in the Yangtze River was 21,000 yuan/ton, -1.34% month-on-month, the average price of Yangtze non-ferrous lead ingots was 16,000 yuan/ton, -0.41% month-on-month, and the average price of non-ferrous copper in the Yangtze River was 694,000 yuan/ton, +1.86% month-on-month. 1Q24's revenue +40.82% month-on-month to 18.023 billion yuan, operating costs +41.72% month-on-month to 17.183 billion yuan, and gross profit +24.66% month-on-month to 840 million yuan. Q1 The company's tax and additional/sales revenue decreased 0.51 percentage points to 0.46% month-on-month, sales expenses decreased 0.12 percentage points to 0.19% month-on-month, management expenses decreased 0.46 percentage points to 0.87% month-on-month, and financial expenses decreased 1.16 percentage points to 0.65% month-on-month.

Copper production is expected to continue to rise. The company plans to produce 263,300 tons of lead-zinc concentrate in '24, +0.14% compared to the actual production in '23, and smelting 457,000 tons of lead-zinc, +3.64% year-on-year, 12,700 tons of copper concentrate, +31.29% year-on-year, and 428,700 tons of electrolytic copper, or +6.37% year-on-year.

Profit forecasting & investment ratings

The company's revenue for 24-26 is estimated to be 746/845/91.7 billion yuan, respectively, net profit to mother of 885/10.40/1,228 million yuan, EPS 0.24/0.28/0.33 yuan, respectively, and corresponding PE 20.20/17.19/14.55 times, respectively. Maintain a “buy” rating.

Risk warning

Production capacity release falls short of expectations; product prices fluctuate greatly; risk of fluctuations in the RMB exchange rate.