Event: On October 18, 2024, the company released its 2024 three-quarter report. In the first three quarters of 2024, the company achieved revenue of 230.4 billion yuan, a year-on-year increase of 2.4%, and net profit to mother of 24.36 billion yuan, an increase of 50.7% year-on-year, after deducting non-return net profit of 23.75 billion yuan. Looking at a single quarter, 2024Q3 achieved revenue of 80 billion yuan, a year-on-year increase of 7.1%, a month-on-month increase of 5.7%, and achieved net profit of 9.27 billion yuan, a year-on-year increase of 58.2%, a year-on-month increase of 5.1%, after deducting non-return net profit of 8.31 billion yuan, an increase of 49.8% year-on-year and a decrease of 9.7% month-on-month. The performance exceeded expectations.
The company's net profit to mother rose year-on-year in the first three quarters of 2024, mainly due to a year-on-year increase in gross profit of 10.893 billion yuan. The company achieved net profit of 24.36 billion yuan to mother in the first three quarters of 2024, an increase of 50.7% year on year. The main reason was the sharp rise in volume and price of the company's main operating products, especially copper and gold products. Among them, the average sales price of mine gold and mine copper increased 25.5% and 13.9%, respectively, over the same period in 2023, and sales increased 3.4% and 2.3%, respectively.
Looking at a single quarter, net profit from 2024Q3 increased by 0.45 billion yuan month-on-month. The core point was that fair value changes increased profit of 2.23 billion yuan month-on-month, mainly due to changes in equity assets held, futures hedging, and exchange rates. 2024Q3 gross profit increased by 4.1 billion yuan year-on-year, mainly due to the year-on-year increase of 2.17 billion yuan and 1.27 billion yuan of rapid profit of mineral gold and copper sheets, respectively, and a decrease of 0.2 billion yuan month-on-month in Q3. Mainly due to the month-on-month decline in copper prices, the gross profit of mineral copper decreased by 1.18 billion yuan month-on-month. Production: Production of major products increased month-on-month. 2024Q3, the company produced 18.9 tons/0.27 million tons/0.27 million tons/0.11 million tons/121 tons of mineral gold/mineral copper/mineral silver, up 1.4%/5.7%/7.9%/11.7%, respectively. The month-on-month increase in gold may have been mainly due to the resumption of production of Zijin in Shanxi, etc. The month-on-month increase in copper production was mainly due to the resumption of production by Kolovic, and the increase in Q3 production by participating companies Kamoa and Yulong by 0.012 million tons and 0.09 million tons, respectively. Cost: The cost side is effectively controlled. The unit sales cost of 2024Q3 mineral gold/copper increased by 1.19%/2.06%, respectively, and changed by +1.57%/-4.59% year over year. The month-on-month increase in costs was effectively controlled. In terms of breakdown, the cost of the Q3 mineral electrolyzed copper/copper concentrate increased by 2.9% and 2.7%, respectively; the cost of copper deposits in the mine decreased by 6.0% month-on-month, mainly due to the recovery of production in Kolwezi.
Core highlights: ① Endogenous growth in copper and gold production. The copper sector, Serbia's Timok+Bor, Congo's Golden Dragon and Juno, and Tibet's Giant Dragon and Juno, will all continue to contribute to growth in 2024-2026; in the gold sector, multiple projects go hand in hand, with the resumption of production in Pogra, the offshore gold mine, Rosebel, and Savayalton, creating new growth, and gold production continues to grow. ② The results of epitaxial mergers and acquisitions have been very fruitful. Since the beginning of the year, the company has successively merged and acquired a number of assets. Among them are those that participate in projects at a smaller cost, such as participating in SolarisResources, Montage Gold, and Universal Gold Group, and there are also acquisitions of controlling interests, such as the acquisition of the La Arena copper and gold mine and Akyem gold mine. ③ The cost side has been effectively controlled, and we look forward to further cost reduction and efficiency in the future.
Investment advice: The company's copper and gold production continues to grow. Considering the rise in copper and gold prices, we expect the company to achieve net profit of 32.5 billion yuan, 40 billion yuan, and 44.9 billion yuan in 2024-2026. The PE corresponding to the closing price on October 18 is 14x, 12x, and 10x, maintaining the “recommended” rating.
Risk warning: Project progress falls short of expectations, falling prices of metals such as copper, gold, lithium, etc., geopolitical risks, exchange rate risks, etc.