24H1 earned net profit of $21.1 million; maintaining the “buy” rating, 24H1 achieved revenue of $1.918 billion (YOY +1.2%), net profit of $79.5 million (YOY +419.3%), and net profit of $21.1 million (YOY +134.4%). We expect the company's net profit to be $0.205/0.533/86.2 billion in 24-26, respectively. Considering the Hong Kong stock copper label, Wind's consistent forecast data is becoming more and more complete. Instead, Luoyang Molybdenum, Jiangxi Copper, and China Nonferrous Mining PB average (24E is 1.15X) is used as the company's PB, company BVPS 0.27 (24E), and considering exchange rate conversion (USD: RMB = 1:7.2, RMB: HKD = 1:0.92), the target price is estimated at HK$2.43, maintaining a “buy” rating.

Production at various mines is in line with expectations, and Las Bambas's annual guide is improving 1) Las Bambas side: 24H1 copper production was 0.126 million tons, and the year-on-year decline in production was mainly due to mining the lower grade section of the F pit; H2 With the increase in mineral supply to higher grade C pits (Q2 starts mining), etc., the company expects annual copper production to reach the upper end of 0.28-0.32 million tons at the beginning of the year. The 24H1 C1 costs $1.81 per pound, and the annual guidance was lowered from 1.6-1.8 dollars/pound to 1.55-1.75 dollars/lb. 2) Kinseever's side: 24H1 copper production is 0.021 million tons, and the annual guideline remains unchanged at 0.039-0.044 million tons. Satellite mining operations reduced the proportion of outsourced mining, and the cost of 24H1 C1 fell to 3.14 US dollars/pound; however, the annual guideline was raised from 2.8-3.15 US dollars/pound to 3-3.35 US dollars/pound, mainly due to lower cobalt prices than expected and increased costs due to faster mining at the Sokoroshe II mine. 3) On the Khoemacau side: 24H1 copper production is close to 0.01 million tons (starting March 23), and the annual guideline remains unchanged at 0.0305-0.0405 million tons (starting March 23).

The 24H1 C1 costs $2.65 per pound, and the annual guideline remains at $2.3-2.65 per pound. 4) On the Dugald River side: The beneficiation plant experienced an unplanned shutdown due to bearing plate problems, and the 24H1 zinc production and sales volume was about 0.08/0.07 million tons, respectively; operations resumed at the end of July, but additional maintenance will be carried out in late August, so the annual production is expected to be at the lower end of 0.175-0.19 million tons. The 24H1 C1 costs $0.67 per pound, and the annual guideline remains at 0.7-0.85 dollars/lb. 5) Rosebery side: 24H1 zinc production and sales volume is about 0.03/0.023 million tons, respectively, and the annual guideline is 0.05-0.06 million tons. 24H1 C1 cost - $0.42 per pound (by-products such as precious metals are more profitable), and the annual guidance was lowered from $0.1 to $0.25 per pound to $0.05-0.2 per pound.

One-off fee limits 24H1 performance growth

The company's 24H1 revenue increased only slightly year-on-year, mainly due to the year-on-year decline in Las Bambas copper sales volume offsetting the rise in metal prices (23H1 Las Bambas sales history inventory). Performance growth was limited by one-time costs: 1) Khoemacau's loan generated approximately $30 million in interest charges (which have now been repaid by the share capital); 2) the acquisition of Khoemacau resulted in a one-time acquisition and consolidation fee of $20 million. It is worth noting that minority shareholders only need to bear expenses at the level of Las Bambas and Khoemacau project companies, and not at the level of listed companies (such as interest expenses generated by shareholder loans). This is the reason why 24H1 has more net profit attributable to minority shareholders than net profit attributable to mother.

Risk warning: The contribution of the Las Bambas C mine fell short of expectations; copper and zinc prices fell short of expectations.