CGN MINING(01164) 国信证券·2024-09-01 07:44Investment Rating - The investment rating for China General Nuclear Power Corporation (CGN) is "Outperform the Market" [1][3][8] Core Views - The company's revenue increased by 39% year-on-year to HKD 4.073 billion in H1 2024, primarily driven by rising natural uranium prices. However, the net profit attributable to shareholders decreased by 37% to HKD 113 million due to increased tax provisions related to dividend withholding tax [1][4][8] - The production of natural uranium met the production plan with a completion rate of 96.9%, and future production is expected to increase due to ongoing projects in Kazakhstan and Canada [1][7] - The strong momentum in nuclear power development supports long-term demand for uranium, with a total of 416 operational nuclear reactors globally as of June 30, 2024, and 59 reactors under construction [1][7] Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of HKD 4.073 billion, a 39% increase year-on-year. The pre-tax profit was HKD 324 million, up 38%, while the net profit attributable to shareholders was HKD 113 million, down 37% [1][4] - The average sales price for uranium was USD 78.47 per pound, a 36% increase year-on-year, while the total sales revenue from uranium trading was HKD 8.93 billion [1][4][8] Production and Projects - The company produced a total of 1,334.1 tons of natural uranium in H1 2024, with a production completion rate of 96.9%. The second quarter saw a production of 727.4 tons, exceeding the planned target [1][7] - The company is focusing on resolving supply issues related to sulfuric acid, which has affected production rates in certain mines. The completion of the first phase of the Zha Mine is expected by the end of 2024 [1][7] Market and Industry Outlook - The nuclear power sector is experiencing robust growth, which is expected to drive uranium demand. As of August 19, 2024, the Chinese government approved five nuclear projects, continuing a trend of approving ten or more units for three consecutive years [1][7] - The average spot price for natural uranium was USD 84.38 per pound as of June 2024, reflecting a 7.3% decrease since the beginning of the year, while long-term contract prices have risen by 16.9% [1][7]