A leader in cross-border multimodal transport, a leader in cross-border multimodal transport logistics services in China, a leader in cross-border multimodal transport logistics services in cooperation with multi-mining enterprises in China, to achieve common growth. At the end of 2021, the company introduced Zijin Mining, a leader in the non-ferrous industry, as a strategic investor. In addition, the company maintains good cooperative relationships with local mining companies. In the future, with the development of copper resources in Africa, we expect the company to grow significantly. We expect that in 2024-2026, the company will achieve revenue of 88.78/107.78/13.261 billion yuan, respectively, and net profit of 13.79/18.20 billion yuan, respectively, corresponding to PE valuation of 14.4/10.9/8.5 times, and give the company a “buy” rating for the first time.
Based on coal transportation, a bridgehead for China and Mongolia
China is a major consumer of coal. Looking at the supply structure, Mongolia and Australia have always been the main importers of coking coal from China. From a regional perspective, the Taben Tauragai Coal Mine (TT mine) is close to China's Ganqimaodu Port, so the Taben Tauragai coal mine is also an important source of imports for China. China and Mongolia are the company's basic market, and the company laid out early to establish advantages at Ganqimaodu Port, an important hub.
Copper transportation is the spearhead, and the African landscape continues to blossom. The company ushered in a rapidly growing dry port transportation sector: the Kasumbalesa-Sakania project, Zambia's Sakania port, and the radiation area of the Ndola to Mufulira road upgrade project. Under the merger of the two projects, many mining companies are within the radiation range of the project. Major Jinchuan international projects such as Ruashi, Kinsenda, Minmetals Resources's Kinseful, and Luanxia, Mwanbashi, Chambisi, and Jinchengshi projects are all in the radiation range.
Cross-border multimodal transport sector: Rio Tinto's Oyu Tolgoi underground mine is one of the global copper incremental projects in 2024. We expect the total Oyu Tolgoi output in 2024-2027 to be 19.9, 25.1, 30.1, and 352,000 tons, respectively; Zijin Mining's Kamoa-Kakula Phase III expansion is the largest core project for global copper mine growth in 2025. We expect Kamoa-Kakula's copper metal production in 2024-2027 to 44.8, 59.2, 64.2, respectively , 637,000 tons. The company is deeply tied to the two projects and grows together with the company and high-quality projects.
Risk warning: geopolitical risk; Mongolian coal imports are not as good as expected; project construction is not as good as expected.