HUAYOU COBALT(603799) 海通证券·2024-08-01 07:31Investment Rating - The investment rating for the company is "Outperform the Market" [2] Core Views - The company is experiencing significant growth in nickel production due to the successful ramp-up of its projects in Indonesia, which is expected to enhance its earnings [6][7] - The company is benefiting from rising copper prices, which positively impacts its copper-cobalt business [6] - The company's earnings for the second quarter of 2024 are projected to show a substantial increase compared to the first quarter, driven by the integration of its operations and the successful production of nickel resources [7] Financial Summary - The company achieved a net profit of 15.0-18.0 billion yuan for the first half of 2024, with a year-on-year decrease of 13.7%-28.1% [7] - The expected earnings per share (EPS) for 2024-2026 are projected to be 2.11, 2.73, and 3.11 yuan per share, respectively [7][10] - Revenue is forecasted to grow from 66.3 billion yuan in 2023 to 81.4 billion yuan in 2024, representing a year-on-year increase of 22.7% [8][10] Production and Cost Analysis - The company has successfully reached production capacity for its 120,000-ton nickel project, which is the largest of its kind globally, significantly boosting its nickel output [6] - The production cost of nickel is expected to remain low due to the company's integrated operations and the benefits of wet-process refining technology [6] Market Comparison - The company's nickel products have been registered for delivery on major exchanges, which is anticipated to reduce sales discounts and enhance profitability [6] - The average price of electrolytic nickel in Q2 2024 was 143,000 yuan per ton, reflecting a 7.8% increase from the previous quarter [6]