若按照Q3 节奏生产，全年铜产量或靠近指引4.32-4.45 吨上限。Q3 副产金、银、铅锌、钼产量亦超预期，若按照Q3 节奏生产，全年金产量或小幅突破年度指引（1.32-1.41 吨）；钼Q1-3 均未销售。成本方面，Q1-3 铜销售成本分别为9.57/4.44/4.21 美元/磅，其中Q3 一次性补缴2017 年7 月-2024 年9 月权益金5440 万美元；我们测算不含权益金的实际销售成本2.76美元/磅、进一步抵扣副产品收益的实际销售成本低至0.53 美元/磅，超预期改善。售价方面，Q3 铜、金价格约为9210 美金/吨、570 元/克（Wind）。The company announced 24Q3 results: revenue of 0.255 billion US dollars, +72.07% month-on-month; net profit to mother of 27.12 million US dollars, +604.61% month-on-month. The results turned out to be the surplus due to the impressive performance of the Jiama mine recovery. Net profit loss for 24Q1-3 was $4.55 million. The company is a copper+gold state-owned enterprise. Based on the outstanding performance of the 24Q3 Jiama mine, we expect a significant year-on-year increase in the company's production and performance in 2025, maintaining a “buy” rating.
Excluding the impact of supplementary equity payments, the Jiama mine's recovery performance is outstanding
In terms of volume, 34,000 tons/day of ore processing was running at full capacity, and H2 was superimposed to begin mining in rich mining areas. The 24Q3 copper production of the Jiama mine slightly exceeded expectations. Q1-3 copper production and sales volumes were 0.002/0.008/0.017 million tons, respectively.
If production follows the Q3 rhythm, annual copper production may be close to the guideline limit of 4.32-4.45 tons. Production of Q3 by-products of gold, silver, lead, zinc, and molybdenum also exceeded expectations. If produced according to the Q3 rhythm, annual gold production may slightly exceed the annual guideline (1.32-1.41 tons); none of the Q1-3 molybdenum was sold. In terms of cost, Q1-3 copper sales costs were 9.57/4.44/4.21/lb, of which Q3 made a one-time payment of 54.4 million dollars of equity from July 2017 to September 2024; we estimated the actual sales cost of 2.76 US dollars/pound without equity, and the actual sales cost after further deducting by-product revenue was as low as $0.53 per pound, which exceeded expectations. In terms of price, Q3 copper and gold prices were about 9210 US dollars/ton and 570 yuan/gram (Wind).
We estimate that the copper sales price coefficient has dropped sharply, or is related to the concentrate's abundance of denominated metals such as gold, silver, lead, and zinc. This situation is similar to 2020. Excluding the equity impact, the company's net profit for Q3 was impressive, about 70 million US dollars. In addition, the company expects the Phase III tailings depot 27H1 to be put into operation. At that time, the ore processing capacity will increase to 44,000 tons/day, which is expected to further increase the production and profitability of the Jiama mine.
The impact of slope management was gradually eliminated. In terms of achieving further cost increases and cost reductions in Changshan Ditch Q3, the impact of slope management was gradually eliminated in '23, and gold production at Changshan Ditch 24Q3 increased further.
Q1-3 The production volume was 0.54/0.71/0.97 tons, respectively; the sales volume was 0.53/0.71/0.97 tons, respectively. We believe it is expected to complete the annual production guideline of 3.3-3.5 tons. In terms of cost, the cost of a gram rose and decreased with volume. Q1/Q2/Q3 was 1654/1608/1,594 US dollars/ounce, respectively; converted to gold, the cost was about 283/372/369 yuan. Furthermore, Hou Chenguang, the new chairman and CEO of the company, took office. He is young (45 years old) and has a financial background. He is an “China Financial Group” elderly person. He has held several senior management positions in China Gold Group since 2001.
A target price of HK$53.22 was given for H shares
In view of the beginning of mining in the rich mining area of the Jiama mine, the copper sales price coefficient declined, and the 24-26 copper sales price coefficient for the Changshan Trench Mine fell below expectations, and the 24-26 unit cost of the mine was raised to calculate the company's net profit of 0.075, 0.272, and 0.294 billion dollars (previous values of 0.135, 0.314, 0.471 billion US dollars). Using segmented valuation: the company's 25-year copper and gold business profit accounted for 56%/44%, compared to the company's 25-year average PE valuation of 8.3/17.7X. Considering that the company operated few mines and had a relatively single source of profit, the company was given a 20% valuation discount, that is, the copper and gold business were 6.7/14.1X (previous value: 24E 7.6/30.0X), corresponding to a target price of HK$53.22 (previous value: HK$51.84).
Risk warning: Copper and gold prices fluctuate; production costs rise above expectations.
