The leading position of copper and gold is stable, and mineral resources are allocated to the world
Zijin Mining is a large multinational mining group and one of the leaders in China's nonferrous metals industry. It is mainly engaged in exploration and development of gold, copper, zinc, lithium and other mineral resources on a global scale, and has a relatively complete industrial chain. At present, the company has investment projects in 15 countries and 17 provinces and cities in China. It is one of the enterprises with the largest amount of metal and mineral resources in China. Among them, copper, gold, and zinc (lead) production all rank among the leading domestic companies. As the company's copper and gold projects continue to expand and actively deploy lithium ore resources, we are optimistic about the company's subsequent performance growth. We expect the company's net profit to be 303.60/366.10/41.399 billion yuan respectively in 2024-2026, corresponding to EPS of 1.15/1.39/1.57 yuan, and the current stock price corresponding to PE is 15.0/12.5/11.0 times, respectively, giving a “buy” rating for the first time.
Copper and gold projects continue to expand, which is expected to continue to increase the company's profit margin
In 2023, the company achieved mergers and acquisitions of a number of world-class mining projects. Among them, projects such as the Kamoa-Kakura copper mine, Tibet Julong copper mine, and Timok copper and gold mine continued to rise in production in the copper business sector, while projects such as Buritika Gold Mine, Shanxi Zijin, and Zhaojin Mining contributed to the increase in the gold business sector. The company's annual mineral copper production increased 11.13% year on year, and mineral gold production increased 20.17% year on year. We believe that the company will benefit from the continued volume of the Kamoa-Kakura Copper Phase III and Julong Copper Phase II projects in the copper sector, and the expansion of projects such as the Bogra Gold Mine and Rosebel Gold Mine in the gold sector. The mineral copper and mineral gold sectors are expected to maintain high growth in 2024-2026. It is expected that the mineral copper production growth rate will be 9.98%/12.49%/11.37%, respectively, and the growth rate of mineral gold production is 9.19%/17.48%/6.02%, respectively.
Laying out the new energy sector, forming a lithium mine layout of “two lakes and two mines”. Since 2021, the company has successively laid out high-quality lithium resources such as 3Q salt lake, Lagocuo salt lake and Xiangyuan hard rock lithium mine, with resource reserves exceeding 10 million tons of lithium carbonate equivalent, and has been invited to lead the exploration and development of green spaces in the northeastern part of the Manono lithium mine. At present, the first phase of the Xiangyuan Hard Rock Lithium Mine has been produced and the second phase of the project is being implemented. The 3Q Salt Lake and Lagocuo Salt Lake projects are also progressing in an orderly manner, and production capacity of 120,000 to 150,000 tons is expected to be formed in 2025. In the context of rapid development in the field of new energy, the company's lithium project layout is expected to form a new driving force for performance growth.
Risk warning: risk of raw material price fluctuations; risk of policy changes; risk of project progress falling short of expectations.