Higher uranium prices have led to a marked increase in pre-tax performance, and withholding taxes on dividends and changes in fair value have led to a decline in profit attributable to mother. In 2024, it achieved turnover of 8.624 billion yuan, +17.05% YoY; realized profit before tax of 0.814 billion yuan, +48.3% YoY; realized profit to mother of HK$0.342 billion, or -31.2% YoY. The company's main natural uranium trading turnover was HK$8.624 billion, with partial profit of HK$-0.095 billion; the company's investment income was HK$0.399 billion, +46.4% year over year; Austrian investment income was HK$0.617 billion, +92.8% year over year. The rise in the price of natural uranium drove a significant increase in the company's natural uranium business profit, but profit to mother declined year-on-year. 1) Under the new tax law in Kazakhstan, the company accrues current dividend withholding tax according to the general dividend withholding tax rate and makes up the withholding tax on dividends for previous years according to the difference. Among them, the withheld income tax rate for the past year was 5%, and the company currently uses the 15% withholding income tax rate for all dividends collected in the past year and the current year. 2) The company exchanged 2.61% of the shares of Paladin with 11.26% of Fission Uranium's shares. The company lost significant influence over the associated company. The difference between the book value of 11.26% of Fission's shares and the fair value of Paladin's 2.61% equity caused the company to terminate its business and lose HK$0.17 billion.

The sales price of uranium ore has increased, the amount of uranium extracted from the self-produced trade is in line with the production schedule, and production costs have increased. In 2024, the company underwrote 1,294 Tu of its own production and trade, which was basically the same as the previous year. The average sales price was 75.04$/lBu3O8, and the average sales cost was 80.80$/lBu3O8. The actual amount of uranium extracted by Xie Company was 976 Tu, and after deducting processing losses, it produced a total of 964 Tu. Of these, Xie Mine produced 407 Tu, with a production cost of 32 $/LBu3O8; Yikang produced 569 Tu, with a production cost of 24 $/LBu3O8. The actual amount of uranium extracted by the Austrian company was 1,783 tU, and after deducting processing losses, it produced a total of 1,739 tons. Of these, China Mining produced 1,663 Tu, with a production cost of 22$/LBU3O8; Mining produced 120 Tu, with a production cost of 31 $/LBU3O8. The average production cost of the mine was 24 $/lBu3O8, an increase of 4 $/lBu3O8 over the previous year. It was mainly due to the increase in raw material prices due to the sulfuric acid supply gap and the increase in underground resource use tax due to the increase in sales prices.

The spot price of natural uranium surged up and fell, and the long-term trade price rose steadily and slowly. At the beginning of 2024, the spot price of natural uranium rose, once exceeding 100 $/lBu3O8, but since then the spot price continued to fall, and spot trading volume also fell 27.7% year on year. Among them, the purchase volume of nuclear power owners decreased by about 58% year on year, and the purchase volume of producers increased by about 50% year on year; sales volume of producers fell by about 72% year on year, and sales volume of intermediaries decreased by 20% year on year. Meanwhile, the price of Changmao showed a steady upward trend, rising from 58$/lbu3O8 at the beginning of the year to 80$/lbu3O8.

Risk warning: price fluctuations, exchange rate risk, project progress falling short of expectations, nuclear safety risks.

Investment advice: Lower profit forecasts and maintain the “better than the market” rating. Taking into account the decline in natural uranium spot prices and the increase in China Mining's underground resource usage tax rate, the company is expected to return net profit of HK$0.635/0.785/0.836 billion in 2025-2027 (the original forecast for 2025-2026 was HK$0.728/0.969 billion, with an additional 2027 forecast), with a year-on-year growth rate of 86%/24%/6%, corresponding to the current stock price PE of 18/14/13X, maintaining a “superior to the market” rating.