Guosen Securities International: Maintains a "buy" rating for CGN MINING (01164) with a target price of HK$2.25.

GuoZheng International released a research report, maintaining a "buy" rating for CGN MINING (01164), with estimated net profit attributable to the parent company of HKD 420 million, HKD 850 million, and HKD 1 billion for the years 2024-2026, with EPS of HKD 0.055, HKD 0.112, and HKD 0.137, respectively. The target price is HKD 2.25. In the third quarter, the company's jointly owned companies produced a total of 692.6 tons of uranium, with a completion rate of 97.2%, meeting expectations. The bank expects that with the global focus on nuclear power, efforts in nuclear power plants and small nuclear reactors by both China and the US will increase the demand for upstream natural uranium mines, benefiting the company's performance. Key points from GuoZheng International: - Completion rate of natural uranium production in the third quarter was 97.2%. - In the third quarter of 2024, the company's natural uranium production totaled 692.6 tons, with a completion rate of 97.2%. The Xie mine produced 95 tons of uranium with a completion rate of 99.4%, the Yi mine produced 133.9 tons with a completion rate of 101.6%; the Zhong mine of the Ao company produced 431.6 tons of uranium with a completion rate of 94.9%, and the Yi mine produced 32.2 tons of uranium with a completion rate of 105.3%. The company's overseas uranium production is steady, and the annual production is expected to be in line with the production plan. In the trading business segment, as of September 30, 2024, the company held a total of 2.35 million pounds of U3O8 uranium with a weighted average cost of $78.77 per pound of U3O8; the amount of uranium in undelivered orders was 11.58 million pounds of U3O8 with a weighted average cost of $75.64 per pound of U3O8. - New signed orders increased quarter-on-quarter, and the price difference between procurement and sales increased. - In the third quarter, the company's new signed procurement orders totaled 1179 tons of uranium, a decrease of 47.1% year-on-year but an increase of 14.9% quarter-on-quarter; the signing price was $78.94 per pound, an increase of 25.9% year-on-year but a decrease of 10.4% quarter-on-quarter; new signed sales orders totaled 1288 tons of uranium, a decrease of 43.2% year-on-year but an increase of 44.9% quarter-on-quarter; the sales price was $81.98 per pound, an increase of 29.5% year-on-year but a decrease of 1.0% quarter-on-quarter. In the third quarter, as the procurement price rapidly decreased while the sales price remained relatively stable, the price difference between procurement and sales widened, increasing the company's trading business gross margin. Additionally, compared to the same period last year, due to the increase in uranium prices, there was additional pressure on signing new orders, but the gross margin increased, offsetting the impact of the decrease in quantity. Risk warning: Generation output lower than expected; overhaul time longer than expected; electricity price lower than expected; nuclear power plant construction progress slower than expected; nuclear fuel price higher than expected; tightening of nuclear power industry policies.