HUAYOU COBALT(603799) Minsheng Securities·2024-04-26 06:30Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on the closing price on April 25, 2024, at 27.65 CNY [2]. Core Views - The company achieved a revenue of 66.304 billion CNY in 2023, a year-on-year increase of 5.19%, but the net profit attributable to shareholders decreased by 14.25% to 3.351 billion CNY [1][7]. - The company is expanding its production capacity, with significant growth in nickel and lithium battery materials sales, despite a challenging market environment [1][9]. - The company has a robust integrated layout in lithium battery materials, which is expected to provide a competitive edge in the market [1][26]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 66.304 billion CNY, with a net profit of 3.351 billion CNY, reflecting a decline in profitability [1][7]. - For Q4 2023, the company recorded a revenue of 15.213 billion CNY, a year-on-year increase of 6.22%, but a significant decline in net profit by 62.56% [1][7]. - The Q1 2024 results showed a revenue of 14.963 billion CNY, a year-on-year decrease of 21.70%, with a net profit of 5.22 billion CNY, down 48.99% [1][7]. Production and Sales - The company’s nickel production reached 128,300 tons in 2023, a year-on-year increase of 83.33%, with sales growing by 87.78% [1][10]. - Lithium product production surged by 140.97% to 11,500 tons, with sales increasing by 104.46% [1][10]. - The company’s cobalt production was 40,600 tons, with sales of 41,400 tons, reflecting increases of 5.58% and 12.20%, respectively [1][10]. Project Developments - The company is advancing its overseas resource projects, including the completion of the world's largest nickel wet smelting project [1][9]. - The company has successfully secured minority stakes in two Indonesian mines, enhancing its nickel resource security [1][9]. Investment Outlook - The company’s upstream resource layout is well-established, and its lithium battery materials are expected to see rapid growth, supported by partnerships with international resource and automotive giants [1][26]. - The projected net profits for 2024-2026 are estimated at 3.652 billion CNY, 4.778 billion CNY, and 5.432 billion CNY, respectively, indicating a positive growth trajectory [2][26].