Net profit to mother rose 36% year over year in 2023. In March 2024, the company released its 2023 annual report. In '23, the company achieved operating income of 186.27 billion yuan, an increase of 7.7%; net profit to mother of 8.25 billion yuan, an increase of 36.0%; net profit of 6.23 billion yuan after deduction, an increase of 2.7%. The company pays a cash dividend of RMB 1.5425 for every 10 shares.
In 2024, the company's revenue of 46.12 billion yuan increased 4.2%; net profit to mother was 2.07 billion yuan, an increase of 553.3%. The increase in the company's performance was mainly due to the TFM hybrid project's production and increase in copper and cobalt production and sales.
The company's production of various mineral products broke through in 2023. In 2023, the company produced 419,500 tons of copper metal, an increase of 51%; 55,526 tons of cobalt metal, an increase of 174%; 15,635 tons of molybdenum metal, an increase of 3%; 7975 tons of tungsten metal (excluding Hulu mining), an increase of 6%; 9515 tons of niobium metal, an increase of 3%; and 18772 ounces of gold, an increase of 16%. Production growth has been achieved for all products in the company's mining sector. Of the company's ore raw material costs in 2023, 94% came from its own mines. We believe this reflects that the company's production growth was mainly due to the release of production capacity from its own mines.
Owned mines have supported the company's continuous growth in production over 24 years. The company has mineral resources such as copper, cobalt, tungsten, molybdenum, niobium and phosphorus in China, Congo gold, Brazil and other countries. The company's TFM copper-cobalt mine has 30.63 million tons of copper resources and 3.34 million tons of cobalt resources. As of March '24, all three TFM hybrid production lines have reached production, with an annual copper production capacity of 450,000 tons and an annual cobalt production capacity of 37,000 tons. The KFM copper-cobalt mine has 4.1 million tons of copper resources and 1.91 million tons of cobalt resources. In 2024, the company plans to produce 52-570,000 tons of copper; 60,000-70,000 tons of cobalt metal, 12—15,000 tons of molybdenum metal, 6500-7,500 tons of tungsten metal, 0.9-10,000 tons of niobium metal, and 105-1.25 million tons of phosphate fertilizer. We believe that a steady increase in the company's production will enhance the company's profitability.
Unleash new ideas to achieve a complete layout of copper-cobalt-nickel-lithium new energy metals. In 2023, the company sold 80% of its interest in the NPM copper and gold mine, making a huge profit. The company and the Ningde Era consortium obtained mining rights for two lithium salt lakes in Bolivia. Furthermore, in terms of nickel metals, the company participated in the Indonesian Huayue nickel-cobalt project. As a result, the company achieved a complete layout of new energy metals copper-cobalt-nickel-lithium.
We have IXM, the world's leading metals trading company. IXM, a subsidiary of the company, is a major global basic metals trader. The 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. IXM has always maintained steady business operations, established a good reputation and a global operating network. In 2023, IXM achieved net profit of 913 million yuan to mother, reaching the highest level in history.
Profit forecasting and ratings. Luoyang Molybdenum is a leading global copper and cobalt enterprise. We believe that the company's high-quality resource portfolio can support the company to maintain its profitability growth. We expect the company's 2024-2026 EPS to be 0.53, 0.62 and 0.72 yuan/share, respectively. Referring to comparable company valuation levels, the first coverage gave the company a PE valuation of 18-20 times in 2022, corresponding to a reasonable value range of 9.54-10.60 yuan, giving a “superior to the market” rating.
Risk warning. There is a risk that the prices of metals such as copper, cobalt, tungsten, and molybdenum will fall.