CGN Mining (1164 HK) Summary
Core Content Overview
CGN Mining (1164 HK) recently issued a profit alert, indicating a decline in net profit after tax for 2024, primarily due to one-off items. The company expects a net profit after tax drop of HK$130-180 million year-over-year (YoY). However, excluding these non-operational factors, pretax profit from continuing operations is projected to increase by HK$230-280 million YoY, representing a 41-50% growth, which slightly exceeds the forecast.
Key Financial Highlights
- Net Profit (HK$ mn): 178 (2023A), 443 (2024E), 675 (2025E), 1,100 (2026E)
- Adjusted Net Profit (HK$ mn): 178 (2023A), 443 (2024E), 675 (2025E), 1,100 (2026E)
- EPS (Adjusted) (HK$ cents): 5.83 (2023A), 8.89 (2024E), 14.47 (2026E)
- P/E Ratio (x): 26.1 (2024E), 17.1 (2025E), 10.5 (2026E)
- P/B Ratio (x): 2.7 (2024E), 2.3 (2025E), 1.9 (2026E)
- Dividend Yield (%): 0.6 (2024E), 0.9 (2025E), 1.4 (2026E)
- ROE (%): 10.8 (2024E), 14.6 (2025E), 20.2 (2026E)
Main Reasons for Profit Decline
- One-off Dividend Withholding Tax Payment: In the first half of 2024, CGN Mining paid a one-off dividend withholding tax, contributing to the higher tax expenses. This is expected to normalize in 2025E.
- Fair Value Loss from Share Swap with Paladin Energy: In December 2024, Paladin Energy acquired Fission Uranium, converting CGN Mining's 11.26% equity interest in Fission Uranium to a 2.61% equity interest in Paladin Energy. This resulted in a loss from discontinued operations.
Analyst Recommendations
- Rating: BUY
- Target Price: HK$2.36
- Upside/Downside Potential: 55.5%
- Current Price: HK$1.52
Earnings Summary
| Year |
Revenue (HK$ mn) |
YoY Growth (%) |
Adjusted Net Profit (HK$ mn) |
YoY Growth (%) |
| FY22A |
3,649 |
101.8 |
497.1 |
(3.5) |
| FY23A |
7,363 |
101.8 |
497.1 |
(3.5) |
| FY24E |
10,992 |
49.3 |
443.4 |
(10.8) |
| FY25E |
11,852 |
7.8 |
675.4 |
52.3 |
| FY26E |
13,084 |
10.4 |
1,099.6 |
62.8 |
Shareholding Structure
- China General Nuclear Power Corporation: 56.9%
- China Chengtong Holding Group: 10.0%
Stock Performance
| Period |
Absolute Return (%) |
Relative Return (%) |
| 1-mth |
-2.6 |
-9.4 |
| 3-mth |
-7.9 |
-21.6 |
| 6-mth |
9.4 |
-19.0 |
Financial Summary
Income Statement (HK$ mn)
| Item |
2021A |
2022A |
2023A |
2024E |
2025E |
2026E |
| Revenue |
3,860 |
3,649 |
7,363 |
10,992 |
11,852 |
13,084 |
| Cost of goods sold |
(3,771) |
(3,501) |
(7,231) |
(11,097) |
(12,004) |
(12,848) |
| Gross Profit |
88 |
148 |
132 |
(105) |
(151) |
235 |
| Selling Expense |
(14) |
(13) |
(19) |
(11) |
(12) |
(13) |
| Admin Expense |
(42) |
(49) |
(52) |
(55) |
(59) |
(65) |
| Others |
(1) |
(3) |
(6) |
(11) |
(7) |
(8) |
| Other Income |
8 |
16 |
12 |
20 |
18 |
20 |
| Share of (losses)/profits of associates/JV |
205 |
523 |
606 |
948 |
1,031 |
1,114 |
| EBITDA |
41 |
101 |
69 |
(161) |
(212) |
169 |
| Interest Income |
2 |
6 |
18 |
28 |
35 |
53 |
| Interest Expense |
(50) |
(62) |
(131) |
(87) |
(87) |
(86) |
| Net Interest income/(expense) |
(48) |
(56) |
(114) |
(60) |
(52) |
(34) |
| Pre-tax Profit |
197 |
567 |
559 |
727 |
768 |
1,250 |
| Income Tax |
(18) |
(52) |
(62) |
(283) |
(92) |
(150) |
| Net Profit |
178 |
515 |
497 |
443 |
675 |
1,100 |
| Adjusted Net Profit |
178 |
515 |
497 |
443 |
675 |
1,100 |
Balance Sheet (HK$ mn)
| Item |
2021A |
2022A |
2023A |
2024E |
2025E |
2026E |
| Current Assets |
1,933 |
2,447 |
2,214 |
3,644 |
3,142 |
4,991 |
| Cash & Equivalents |
81 |
52 |
1,017 |
823 |
1,496 |
2,033 |
| Account Receivables |
99 |
343 |
462 |
562 |
607 |
612 |
| Inventories |
1,743 |
2,048 |
697 |
2,221 |
1,002 |
2,307 |
| Total Liabilities |
4,194 |
3,518 |
2,870 |
4,022 |
3,092 |
4,138 |
| Total Shareholders Equity |
2,155 |
3,348 |
3,880 |
4,324 |
4,932 |
5,931 |
Cash Flow (HK$ mn)
| Item |
2021A |
2022A |
2023A |
2024E |
2025E |
2026E |
| Net Cash from Operations |
258 |
113 |
1,040 |
(967) |
(109) |
(296) |
| Net Cash from Investing |
(3,337) |
419 |
499 |
810 |
885 |
971 |
| Net Cash from Financing |
1,981 |
(550) |
(582) |
(37) |
(103) |
(138) |
| Net Change in Cash |
81 |
52 |
1,017 |
823 |
1,496 |
2,033 |
Valuation Metrics
| Metric |
2021A |
2022A |
2023A |
2024E |
2025E |
2026E |
| P/E Ratio (x) |
56.2 |
21.2 |
23.2 |
26.1 |
17.1 |
10.5 |
| P/B Ratio (x) |
4.7 |
3.5 |
3.0 |
2.7 |
2.3 |
1.9 |
| Dividend Yield (%) |
0.0 |
0.0 |
0.6 |
0.9 |
1.4 |
1.4 |
| ROE (%) |
16.6 |
18.7 |
13.8 |
10.8 |
14.6 |
20.2 |
Analyst Meeting
CGN Mining will host an analyst meeting and conference call on 21 Mar, providing further insights into its financial performance and future outlook.
Industry Outlook
The uranium sector is expected to benefit from a structural growth cycle in global nuclear energy over the next decade. CGN Mining, with its low-cost uranium mining operations, is well-positioned to capitalize on this trend.
Risk & Disclaimer
This report contains general information and is not tailored to individual investors. It is for informational purposes only and should not be relied upon for investment decisions without consulting a professional financial advisor. The value of investments is subject to market fluctuations and may not be guaranteed.
CMBIGM Ratings
- BUY: Stock with potential return of over 15% over next 12 months
- HOLD: Stock with potential return of +15% to -10% over next 12 months
- SELL: Stock with potential loss of over 10% over next 12 months
- NOT RATED: Stock not rated by CMBIGM
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark
Important Disclosures
- The information is based on publicly available data and CMBIGM's estimates.
- CMBIGM does not provide individually tailored investment advice.
- The report is for the use of intended recipients only and may not be reproduced or distributed without prior consent.