The company released the 2023 report and the 2024 quarterly report
In 2023, Luoyang Molybdenum achieved operating income of 186.269 billion yuan, and realized net profit of 8.250 billion yuan, +35.98% year over year; 24Q1 achieved operating income of 46.121 billion yuan, +4.15% year over year, and realized net profit of 2,072 billion yuan, or +553.28% year over year.
TFM and KFM hybrid mineral production, accelerated release of copper-cobalt production capacity
The company's revenue growth in 2023 was mainly from the mining side. In 2023, the company's mine-side revenue was 44.518 billion yuan, +75.44% year over year. Thanks to the successive commissioning of KFM and TFM's two major hybrid mining projects, the company turned the company's resource advantage into a capacity advantage. In 2023, the company produced 419,500 tons of copper (+51% year over year) and 55,500 tons of cobalt (+174% year over year), all of which reached record highs. Copper production was close to the top ten in the world, and cobalt production ranked first in the world. In terms of trade, IXM contributed 913 million yuan to net profit, the highest level in history, and the synergy between the company's mines and trade continues to increase.
24Q1 achieved copper production of 147,500 tons (+122.86% YoY), cobalt production of 25,500 tons (YoY +392.23%), 0.35,000 tons of molybdenum (-15.66% YoY), 0.19,000 tons of tungsten (+0.33% YoY), 0.25 million tons of niobium (+9.9% YoY), and 278,800 tons of phosphate fertilizer (YoY +3.34%). Except for phosphate fertilizer, the company's major metal output all exceeded a quarter of the annual guideline.
Copper and cobalt in the Congo will continue to contribute to the increase in production capacity
By the end of the 2024Q1 period, all three TFM hybrid production lines had reached full production, achieving a copper production capacity of 450,000 tons/year and a cobalt production capacity of 37,000 tons/year. According to the company's 2024 production guidelines, it is expected to produce 52-570,000 tons of copper metal, 60,000 to 70,000 tons of cobalt metal, and 12,000-15,000 tons of molybdenum metal. Copper and cobalt production is expected to reach a new high. At the same time, the company plans to expand production capacity in Africa, launch TFM Phase III and KFM Phase II expansion projects in due course, and push the African region to meet production capacity standards.
Investment advice
Luoyang Molybdenum is the world's leading copper and cobalt company. The Democratic Republic of the Congo (DRC) TFM and KFM have continued to increase production to achieve two-wheel drive for industrial metals and energy metals. The company's stock projects have fully met production standards, and incremental projects are progressing efficiently and rapidly. We expect net profit to be 113.5/130.7/14.79 billion yuan in 2024-2026 (previous value was 121.5/13.2 billion yuan in 2024-2025, respectively, carefully lowered expectations considering fluctuations in cobalt prices), 15.4/13.4/11.8 times corresponding to PE, maintaining a “buy” rating.
Risk warning
Prices of metals such as copper, cobalt, and molybdenum fluctuated greatly; production capacity releases fell short of expectations; overseas business risks, etc.