中广核矿业（1164 HK）：哈萨克斯坦拟议新政策：对资产权利影响甚微但存在估值风险

Newly proposedpolicy in Kazakhstan: little impact onasset rights butrisk tovaluation Target PriceHK$3.67Up/Downside12.8%Current PriceHK$3.25 What’snew?According to news report(link),the draft by Kazakhstanlawmakers to tighten the control ofuranium miningJVs has been passed bythelower house and await Senate review.The draft requiresKazatomprom (KAPLN,NR), the state-owned and world largest uranium producer in terms ofproduction volume,to receive 90% stake in JV upon contract renewal. KAP haslong been having a number of JVs with different foreign partners in uraniumminingin Kazakhstan. According to KAP, negotiationswithJV partners areunderway and some partners haveexpressedreservations about the initiative. China MaterialsWayne FUNG, CFA(852) 3900 0826waynefung@cmbi.com.hk Analysis.According to the data of Nuclear Energy Agency and theInternational Atomic Energy Agency,Kazakhstanranked 2ndin the world interms of recoverable uranium resources with 14%ofglobal market share(by end-2022).Kazakhstan ranked 1stin terms of production (in 2022) asthe country has the highest portion oflow-costmines across the globe. Inview of the tight supply of uranium over the coming decade, the policychange in Kazakhstan is not totally out of surprise. Insignificantimpact on CGN Mining’s ownership of reserves...Currently,CGN Mining has two JVs (four mines)with KAP(49% stake forCGN Mining).Except for Semizbay mine, the other three mines’ mininglicence will cover the entire estimated mine life. Therefore, the potentialchange in policy will not affect these mines. ForSemizbay mine (license tobe expired by 2031), the current annual uranium output is ~410t (15% oftotal consolidated mining output of the four JVs). We estimate the reservesof Semizbay(5,300t by end-2024)willbe enough to support production by2037intheory,assuming no big changes in the annual output. In otherwords, the JV structureof Semizbay minecould be subject to change after2031. …But potential impact on our target valuation.OurNPV calculation onlycovers the miningcash flowuntilthe depletion of reserves or expiry ofmining license, whichever earlier. Therefore, the change in policy will notaffect ourNPVcalculation. That said, given that wehaveassigneda multipleof 3.5x on our NPV value in order to reflect the extension of mining licenseand the potential conversion of resources to reserve driven by higheruranium price, such policychange will create uncertainty to our targetmultiple.We have left our TPunchangedbutwill monitorthe developmentof the policy change going forward. Related reports: Uranium sector–Further upside driven byhigher uranium price–2 Oct 2025 (link) CGN Mining–Further upside driven byhigher uranium price–2 Oct 2025 (link) Uranium price Source: Cameco, CMBIGM 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 is to reflect(1)the potential conversionfrom resourcestoreservesamid the uptrend of uranium price; and (2) the potential extension of mininglicenses (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. Figure6:New NPV assumptions Risk factors:(1) uncertainties of policy in Kazakhstan; (2) pullback of spot uraniumprice; (3) delay of sulphuric acid capacity commencement in Kazakhstan. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, inwhole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his orher compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in thisreport.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issuedby 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 thedate 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 listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with p