The company disclosed its results for the first half of '24. The company achieved net profit of 15.084 billion yuan in the first half of '24, an increase of 46% over the previous year; net profit without deduction to mother was 15.433 billion yuan, an increase of 60% over the previous year. Looking at a single quarter, 24Q2 achieved net profit of 8.824 billion yuan, a year-on-year increase of 82% and a month-on-month increase of 41%; net profit without deduction to mother was 9.209 billion yuan, an increase of 115% year-on-year and 48% month-on-month. Semi-annual dividend plan: Each share will receive a cash dividend of 0.1 yuan (tax included), with a total cash dividend of 2.658 billion yuan.

The volume and price of the copper and gold business have risen sharply. 1) Volume: The company's Q1 mine produced 0.5186 million tons of copper in '24, up 5.3%; the mine produced 35.4 tons of gold, up 9.5% year on year; 2) Price: the unit price of gold ingots in the first half of '24 was 498.18 yuan/gram, up 18% year on year; the unit price of gold concentrate was 469.74 yuan/gram, up 26% year on year; the unit price of copper concentrate was 64965 yuan/ton, up 14% year on year; the unit price of electrolytic copper was 65,8/ Tons, up 10% year over year.

The unit sales cost of copper and gold declined month-on-month. The company's gold ingot cost in the first half of '24 was 284.78 yuan/gram, up 4.90% year on year, down 4.39% month on month; gold concentrate cost was 151.50 yuan/gram, down 2.50% year on year and 6.73% month on month; copper concentrate cost was 18,578 yuan/ton, down 5.41% year on year, down 8.82% month on month; electric copper cost was 3,072 yuan/ton, up 16.29% month on month; electrolytic copper cost was 35,778 yuan/ton, down 0.62% year on month, down 20.19% month on month.

Significant results have been achieved in the new round of prospecting. The major geological prospecting results of the company's Julong Copper Mine and Heilongjiang Tongshan Copper Mine were reviewed and approved by the natural resources authorities. The two copper mines added a total of 18.377 million tons of copper resources and 5.777 million tons of copper reserves, accounting for 14.2% of China's copper reserves at the end of 2022. In addition, the southern MG exploration of the Peji copper-gold mine in Serbia is expected to uncover new large-scale high-grade copper-gold deposits. Exploration of the Buritika gold mine, northeastern Manono lithium mine, Norton gold field, Shanxi Zijin, Xiangyuan lithium mine, and preparations for iron ore have all made positive progress. The company's equity resources increased by 6.197 million tons of copper, 53.71 tons of gold, and 3,334 tons of silver compared to the beginning of the year.

Key copper and gold projects are being accelerated. The Camoa Copper Mine Phase III plant was completed and put into operation half a year ahead of schedule, and the annual copper production will increase to more than 0.6 million tons after delivery; the 2.4 million tons/year gold mining and 5 tons/year gold smelting project at the Sabayalton Gold Mine was completed and put into operation as scheduled. The Zitong and Saizijin projects with a total annual total copper output of 0.45 million tons, the first and second phases of the Julong Copper Mine Phase II renovation and expansion project, the Heilongjiang Copper Mountain Mine, the first phase of mining in Aurora, Guyana, and the construction of the “Two Lakes and Two Mines” lithium sector are progressing in an orderly manner.

Profit forecasting and valuation. The company is a leading global mining enterprise. We expect the company's net profit to usher in a period of rapid growth over the next 3 years as the company continues to expand production of high-quality projects such as Saizi Gold, Saizi Copper, and Julong Copper Mine in the copper sector, as well as the commissioning of projects such as Rosebel in the gold sector. We expect the company's 24-26 EPS to be 1.16, 1.60, and 1.80 yuan/share, respectively. Referring to the valuation level of comparable companies and the historical valuation level of the company, a PE valuation of 17-18 times 2024 is given, corresponding to a reasonable value range of 19.78-20.94 yuan/share, giving a rating of “superior to the market”.

Risk warning. Production expansion fell short of expectations; copper prices fell short of expectations; raw material costs rose.