Western Mining(601168) 广发证券·2024-10-21 01:11Investment Rating - The report assigns a "Buy" rating to Western Mining (601168 SH) with a target price of 25 16 yuan per share [4] Core Views - Yulong Copper Mine's increased production and efficiency improvements drove a 26% QoQ growth in net profit attributable to the parent company in Q3 2024 [2] - Q3 2024 revenue reached 11 7 billion yuan (+23% YoY -16% QoQ) while net profit attributable to the parent company was 1 1 billion yuan (+61% YoY +26% QoQ) [2] - The Yulong Copper Mine achieved record high copper metal production with an annualized processing capacity of 24 46 million tons exceeding its 22 8 million ton capacity [2] - Copper molybdenum recovery rates improved by 2 31% and 2 12% respectively after technical upgrades in July 2024 [2] Financial Performance - 2024E revenue is projected at 51 78 billion yuan (+21 1% YoY) with net profit attributable to the parent company of 3 997 billion yuan (+43 3% YoY) [3] - EPS is forecasted to grow from 1 68 yuan in 2024E to 1 87 yuan in 2026E [3] - ROE is expected to increase from 25 4% in 2024E to 26 1% in 2026E [3] - The company's debt-to-asset ratio decreased by 0 54 percentage points to 59 61% at the end of Q3 2024 [2] Operational Highlights - Yulong Copper Mine's processing volume and recovery rate improvements offset the impact of declining copper prices [2] - Q3 2024 operating cash flow was 3 1 billion yuan (+6% YoY -32% QoQ) [2] - The company's minority interest income increased by 111 million yuan QoQ in Q3 2024 mainly due to Yulong Copper Mine's performance [2] Valuation Metrics - The report values Western Mining at 15x 2024E PE [2] - Current P E ratios are 10 37x for 2024E and 9 29x for 2026E [3] - EV EBITDA is projected to decrease from 5 84x in 2024E to 5 10x in 2026E [3]