CGN MINING(1164.HK):KAZATOMPROM'S SUPPLY CUT TO FURTHER FUEL URANIUM RALLY
CGN MINING(1164.HK):KAZATOMPROM'S SUPPLY CUT TO FURTHER FUEL URANIUM RALLY
Last Friday evening, Kazatomprom (KAP LI, NR) announced that it will revise down 2024 production guidance on shortage of sulfuric acid supply, and its 2025 output is also subject to adjustment depending on progress in new deposits. While CGNM is not immune from the reduced production and offtake volume at its JV/associate mines in Kazakhstan, we expect the surge in uranium prices would be more than enough to offset it and eventually benefit its bottom line. We lift SOTP- based TP to HK$2.30 as we adjust up our 2024/25 earnings forecasts by 15%/7% respectively. Reiterate BUY rating on CGNM.
上週五晚上，哈薩克斯坦工業股份公司（KAP LI，NR）宣佈，由於硫酸供應短缺，它將下調2024年的產量預期，其2025年的產量也將根據新礦牀的進展進行調整。儘管CGNM無法倖免於其在哈薩克斯坦的合資企業/關聯礦山的產量和承購量下降，但我們預計，鈾價格的上漲將足以抵消鈾價格的上漲並最終提高其利潤。我們將基於SOTP的目標股價上調至2.30港元，因爲我們將2024/25年的收益預測分別上調了15％/7％。重申對CGNM的買入評級。
Key Factors for Rating
評級的關鍵因素
KAP's production update. The company announced on last Friday that it expects 2024 production target to be adjusted down due to supply challenges of sulfuric acid - a key material for its in-situ recovery (ISR) uranium mining method. Its 2025 production target may also be affected depending on the development progress of new deposits. KAP will give detailed production guidance at its 4Q23 results announcement on or before 1 Feb.
KAP 的生產更新。該公司上週五宣佈，由於硫酸的供應挑戰，預計2024年的產量目標將下調，硫酸是其原地回收（ISR）鈾礦開採方法的關鍵材料。其2025年的產量目標也可能受到影響，具體取決於新礦牀的開發進度。KAP將在2月1日當天或之前的23年第四季度業績公告中給出詳細的產量指導
Our take: The shortage of sulfuric acid has been one of the operational challenges haunting KAP in the past two years and it is not really a surprise for the company to cut production guidance, in our view. To address the problem, KAP is building a 800,000 tonne sulfuric acid plant in the southern Kazakhstan city of Turkestan, but it will only be completed before 2026. Sulfuric acid accounts for 12-16% of KAP's production costs during 2018-22 period.
我們的看法：在過去兩年中，硫酸短缺一直是困擾KAP的運營挑戰之一，在我們看來，該公司削減產量指導並不奇怪。爲了解決這個問題，KAP正在哈薩克斯坦南部城市土耳其斯坦建造一座80萬噸的硫酸工廠，但要到2026年才能完工。在2018-22年期間，硫酸佔KAP生產成本的12-16％。
Impact on uranium price. Spot uranium price responded strongly to KAP's announcement overnight, with mid-price jumping to US$103.5/lb according to Numerco. Uranium ETFs also surged 5.8-10.1% in US trading sessions. The tight uranium market is highly sensitive to any marginal supply changes, not to mention KAP's - the largest producer in the world with a 43% market share in primary supply in 2022 (100% basis). Global utilities companies may take further actions to secure their long-term fuel supply, and the uranium rally may still have legs in the coming months, in our view. We lift our 2024/25 average spot uranium price from US$82.5/92.5 to US$100/110 per pound of U3O8.
對鈾價格的影響。根據Numerco的數據，現貨鈾價格對KAP的宣佈反應強烈，中間價躍升至每磅103.5美元。鈾ETF在美國交易時段也飆升了5.8-10.1％。緊張的鈾市場對任何邊際供應變化都高度敏感，更不用說KAP了。KAP是世界上最大的生產商，2022年在初級供應中的市場份額爲43％（100％）。全球公用事業公司可能會採取進一步行動來確保其長期燃料供應，我們認爲，未來幾個月鈾的漲勢可能仍會持續下去。我們將2024/25年的平均現貨鈾價格從82.5/92.5美元上調至每磅U3O8的100/110美元。
Impact on CGNM. We believe CGNM will see a net positive impact from the move. On one hand, CGNM's JV/associate mines with KAP will also suffer from reduced output, but the increase in uranium price will more than offset the volume loss on our estimates. We cut our 2024-25 output assumptions by 9%/15% respectively (100%), but raise EPS forecasts by 15%/7%.
對 CGNM 的影響。我們相信，此舉將對CGNM產生淨的積極影響。一方面，CGNM與KAP的合資/關聯礦山也將遭受產量減少的影響，但鈾價格的上漲將足以抵消我們估計的產量損失。我們將2024-25年的產出假設分別下調了9％/15％（100％），但將每股收益預測提高了15％/7％。
Key Risks for Rating
評級的主要風險
Higher-than-expected uranium supply; unexpected nuclear accident.
鈾供應高於預期；意想不到的核事故。
Valuation
估價
Maintain BUY rating. Our new SOTP-based TP of HK$2.30 represents 12x 2024x P/E.
維持買入評級。我們基於止損交易所的新目標股價爲2.30港元，市盈率爲2024倍的12倍。
譯文內容由第三人軟體翻譯。