The Zhitong Finance App learned that China Securities International released a research report stating that maintaining the “buy” rating of CGN Mining (01164), the estimated net profit of the 2024-2026 company was 0.42 billion/0.85 billion/1 billion HKD, and the EPS was 0.055/0.112/0.137, with a target price of HK$2.25. In the third quarter, the company's participating companies produced a total of 692.6 tons of uranium, with a planned completion rate of 97.2%, in line with expectations. The bank expects that in the context of a renewed global focus on nuclear power, China and the US are working on nuclear power plants and small nuclear reactors respectively, which will boost the demand for upstream natural uranium ore and benefit the company's performance.

The main views of China Securities International are as follows:

The completion rate of the natural uranium production plan for the third quarter was 97.2%

In the third quarter of 2024, the company produced a total of 692.6 tons of uranium, with a planned completion rate of 97.2%. Among them, Xie Company's Xie Mine produced 95 tons of uranium, with a planned completion rate of 99.4%; Iran Mine produced 133.9 tons of uranium, with a planned completion rate of 101.6%; Austrian Company's China Mine produced 431.6 tons of uranium, with a planned completion rate of 94.9%, and the Iraqi mine produced 32.2 tons of uranium, with a planned completion rate of 105.3%. The company's overseas uranium production is steady, and it is expected that the annual production can be completed according to the production plan. In the trading business sector, as of September 30, 2024, the company held a total of 2.35 million pounds of natural uranium U3O8, with a weighted average cost of 78.77 US dollars/pound of U3O8; the amount of undelivered natural uranium was 11.58 million pounds of U3O8, and the weighted average cost was 75.64 million pounds of U3O8.

New orders increased month-on-month in the third quarter, and the difference between procurement and sales rose

In the third quarter, the company signed a new purchase order of 1,179 tons of uranium, a year-on-year decrease of 47.1% and a year-on-month increase of 14.9%; achieved a contract price of 78.94 US dollars/lb, an increase of 25.9% year-on-year and a decrease of 10.4% month-on-month; and achieved a sales price of 81.98 US dollars/lb, an increase of 29.5% year-on-year and 1.0% month-on-month. In the third quarter, as prices on the purchasing side fell rapidly, while prices on the sales side remained basically stable, the gap between procurement and sales widened, and the gross profit margin of the company's trade business increased. At the same time, compared with the same period last year, due to the increase in uranium ore prices, the pressure to sign new orders has increased, but the margin for gross profit has increased, offsetting the impact of the decline in volume.

Risk warning: Unit power generation fell short of expectations; unit overhaul time exceeded expectations; electricity prices fell short of expectations; nuclear power plant construction progress fell short of expectations; nuclear fuel prices exceeded expectations; nuclear power industry policies were tightened.