24H1 achieved net profit of 3.62 billion yuan, while maintaining the “buy” rating company 24H1 achieved revenue of 273.09 billion yuan (YOY +2.1%) and net profit of 3.62 billion yuan (YOY +7.7%); 24Q2 achieved revenue of 150.57 billion yuan (YOY +7.7%, QOQ +22.9%), and net profit to mother 1.9 billion yuan (YOY +18.5%, QOQ +10.9%). We expect net profit to mother of 7.4/7.3/7.4 billion in 24-26. Comparatively, the company's average PE value for 24 years was 11.1XPE, giving the company A shares 11.1X PE in 24 years, an average premium rate of 82% for A/H shares in the past three years. The estimated target price for A/H was 23.7 yuan/HK$14.3, maintaining a “buy” rating.

The overall completion of 24H1 production is better

24H1 achieved an output of 1.175 million tons/72.06 tons/633.19 tons/3.2025 million tons/0.8718 million tons/0.101 million tons/4334 tons for cathode copper, gold, silver, sulfuric acid, copper processing, and self-produced copper and molybdenum concentrate (45%). Referring to the company's 24-year plan, the overall completion situation is good. Among them, gold and sulfuric acid production exceeded expectations; cathode copper, silver, and self-produced copper met expectations; copper processing fell short of expectations or suppressed downstream demand due to high copper prices. In addition, the company's 24-year annual report revealed that the company's tungsten ore project in Kazakhstan will achieve trial production in Q3.

The mining side benefited from rising metal prices and limited pressure on the smelting side. 24H1 profitability increased according to Wind, 24H1 copper prices, gold prices, and silver prices were +10%, 20%, and 28%, respectively, and molybdenum prices were +15%, 13%, 25%, and 4% month-on-month, respectively; among them, Q2 copper prices, gold prices, silver prices, and molybdenum prices all reached record highs. The company has a copper smelting production capacity of 2.1 million tons, and plans to produce 2.3 million tons of cathode copper in 24 years. The smelting scale is large. However, among the company's copper smelting raw materials, the proportion of outsourced mining partners is high, and some use crude copper, so the impact on the decline in affected spot TC prices is limited; furthermore, the price of sulfuric acid rose year on year. We believe that the mining side benefited from the rise in metal prices, and the smelting sector was limited, which is the main reason why the net sales margin of 24H1 increased 0.12pct to 1.47% year over year. The increase in the company's net interest rate to mother narrowed to 0.07 pct, mainly due to the increase in profit and loss of minority shareholders of 24H1 Company to about 0.41 billion yuan.

Risk warning: commodity price fluctuations and copper mining conflicts continue to increase.