YCC(000878) 国信证券·2024-09-01 07:41Investment Rating - The investment rating for Yunnan Copper Industry (000878.SZ) is "Outperform the Market" [5][17]. Core Views - The company reported a year-on-year net profit growth of 4.9% in H1 2024, with total revenue reaching 85.27 billion yuan, an increase of 20.5% [1][6]. - The copper production remained stable, while the smelting business saw profit improvements despite a significant drop in cathode copper production due to the relocation of Southwest Copper [1][6]. - The company is expected to benefit from a high copper price environment and strong cash flow, with potential asset injections from its major shareholder, Chalco [2][6]. Financial Performance Summary - Revenue and Profit: In H1 2024, the company achieved revenue of 85.27 billion yuan (+20.5%) and a net profit of 1.06 billion yuan (+4.9%). The net cash flow from operating activities was -3.1 billion yuan, primarily due to inventory increases [1][6]. - Production Metrics: The copper concentrate production was 31,700 tons (+1.6% YoY), while cathode copper production was 508,700 tons (-22.8% YoY) due to the relocation of Southwest Copper [1][6]. - Profit Distribution: The company proposed a cash dividend of 0.3 yuan per 10 shares, totaling 60 million yuan [1][6]. Future Projections - Profit Forecast: The projected net profits for 2024-2026 are 2.09 billion, 2.40 billion, and 3.35 billion yuan, with year-on-year growth rates of 32.5%, 14.8%, and 39.5% respectively [2][15]. - Earnings Per Share (EPS): The diluted EPS for the same period is expected to be 1.04, 1.20, and 1.67 yuan, with corresponding price-to-earnings (PE) ratios of 10.8, 9.4, and 6.7 [2][15]. Key Financial Indicators - Revenue Growth: The company’s revenue is projected to grow from 134.92 billion yuan in 2022 to 160.11 billion yuan in 2024, reflecting a compound annual growth rate (CAGR) of approximately 8.9% [3][15]. - Net Profit Margin: The net profit margin is expected to improve from 1.3% in 2022 to 2.2% in 2024 [3][15]. - Return on Equity (ROE): The ROE is projected to increase from 11.4% in 2023 to 18.0% in 2026 [3][15].