中广核矿业(1164.HK)：铀价上涨推动进一步上行

CGN Mining (1164 HK) Further upside driven byhigheruranium price Target PriceHK$3.67(Previous TPHK$2.42)Up/Downside16.4%Current PriceHK$3.15 Wemaintain our construction stance ontheuraniumprice, giventhe strongdemandfrom nuclear power but uncertain uraniumsupply arising from thecommencement of new mines(fordetails please refer to oursectorreport “Tighturanium supplycontinuestosupportamulti-year upcycle”).Werevise up our2026E-27E earnings forecast by9-11%, after incorporating higher uraniumspotprice assumptions.We reviseupour NPV-based TPtoHK$3.67fromHK$2.42.Despite the rally over the past two months,we expect the continuous recoveryof uranium price driven by tight supply, will serve asashare price catalyst.ReiterateBUY. China MaterialsWayne FUNG, CFA(852) 3900 0826waynefung@cmbi.com.hk Higheruranium price assumptions.We revise up our 2026E/27Euranium spot price forecastsboth by 9% to US$90/93 per pound. Weestimate this, together with the new off-takeagreementsignedwith parentcompany (2026-28), will boost earnings growth of 235% YoY in 2026E (lowbase in 2025) and 19% in 2027E. New NPV-based TP.We roll over our valuation base to 2026E.Our long-term uranium price assumption (starting from 2031E) is revised up fromUS$96 to US$120 per pound.Our multiple for NPV is revised up to 3.5xfrom 3x, to reflect higher chance of conversion from resources to reserveson the back of rising uraniumprice. Risk factors:(1)unexpectedtrading loss; (2) pullback of spot uraniumprice;and(3)delay of sulphuric acid capacity commencement inKazakhstan. Related reports:CGN Mining-Potential loss in 1H25E but recoveryin 2H25E;Expect a solidturnaround in 2026E–24 Jul 2025 (link) CGN Mining-New pricing formula for off-take agreement a big surprise–4 Jun2025 (link) CGN Mining–Uranium price gap likely tofurther narrow, a key catalyst for CGNMining–15 May 2025 (link) CGNMining–Further downside riskshouldbereducedwithlargecontract/spot uranium price gap–23 Mar2025 (link) Uranium price Source: Bloomberg, CMBIGM Operating data and assumptions Source: Company data, CMBIGM Source:Company data, CMBIGM Valuation We apply NPV methodology to value CGN Mining. Based on the life of the mines or relevantlicenses, future cash flow (mainly from JVs dividends) is discounted to the present value. Our target multiple of3.5xNPV (previously3x) is to reflect(1)the potential conversion fromresourcesto reservesamid the uptrend of uranium price;and(2) the potential extension ofmining licenses (currently our cash flow projection is based on expiry of mining right). Our long-term assumptions include: (1) uranium price increasing5% p.a. fromUS$99/lbduring 2027-31, (2) a stabilized priceat US$120/lbthereafter, and (3)unitproduction costs rising 1% p.a. during 2027-42 to reflect inflation. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) allof the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listedcompanies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential returnof +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months CMB InternationalGlobal MarketsLimited Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International CapitalCorporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important DisclosuresThere are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGM does not provide i