Introduction to this report:
Taking into account factors such as the market environment and related policies, the company decided to discontinue this fixed increase. Wait for Zijin to increase its shareholding ratio in other ways.
Incidents:
The company announced the termination of the issuance of A-shares to specific targets in 2023.
Commentary:
Maintain the “Overweight” rating. We believe that the company is actively deploying energy storage cells, energy storage system integration, and wind and landscape operations, and that the progress in transforming the new energy business has exceeded expectations. The predicted net profit for the company for 2023-2025 was 1,364, 17.98, and 2,341 billion yuan, respectively. The corresponding EPS was 1.26, 1.67, and 2.17 yuan, respectively, and the target price was maintained at 28.89 yuan, maintaining the “increase in holdings” rating.
Taking into account factors such as the market environment and related policies, the company decided to discontinue this fixed increase. 1) In July 2023, Zijin Mining plans to participate in a fixed increase of capital of no more than RMB 1.54 billion for energy storage battery manufacturing and bank loan repayment with a full cash subscription of 14.31 yuan/share. 2) Currently, the proportion of capital raised and used by the company last time is low. Taking into account factors such as the current capital market environment, relevant policies, and the actual situation of the company, after careful verification, it is intended to end the current plan to issue A-shares to specific targets.
Zijin continues to increase its shareholding ratio, and the increase in its holdings at a high level shows confidence. 1) In early November 2023, Zijin Investment, a wholly-owned subsidiary of Zijin, increased its holdings by 1,495 million shares in the secondary market, accounting for 0.14% of the company's total share capital.
Currently, Zijin holds 170 million shares of the company, accounting for 15.86% of the company's total share capital; it controls a total of 280 million voting shares of the company, accounting for 25.76% of the company's total share capital. 2) Zijin Mining is determined to turn Longjing Environmental Protection into its mining green energy platform, and its continuous increase in holdings shows confidence.
The new energy business is progressing rapidly on schedule, and the traditional environmental protection business has sufficient orders. 1) In terms of landscape business, the company has now completed the target registration of about 2 GW of projects, and is currently proceeding with construction of nearly 1 GW. 2) In terms of energy storage business: ① The Longjing Honeycomb energy storage battery pack and system integration project was completed and put into operation on August 28, 2023, and the new energy storage contract has reached 1,235 billion yuan; ② The 5GWH lithium iron phosphate energy storage cell project in Shanghang County is about to be put into production. 3) In terms of traditional environmental protection business: Under the trend of increasing new installed capacity for coal power, the company added 7.9 billion yuan in project contracts in the first three quarters of 2023. The growth rate was remarkable. At the end of the period, the project contracts in progress were 19.9 billion yuan, and there were sufficient orders in hand.
Risk warning: Flue gas equipment sales, solid and hazardous waste project management, new energy business expansion falling short of expectations, etc.