\u3000\u3000 Hainan Mining Co.Ltd(601969) (601969)
Events
The company released the performance forecast for 2021 on the evening of January 27. It is expected to realize the net profit attributable to the parent company of 801-960 million yuan in 2021, with a year-on-year increase of 461.70% to 573.66%; The net profit deducted from non parent company was 521 million yuan to 681 million yuan, with a year-on-year increase of 273.31% to 387.65%.
Commentary
Q4 performance is slightly lower than expected. In 21 years, the net profit attributable to the parent company in q1-q3 was 978 million yuan, and the net profit attributable to the parent company in Q4 was 18-177 million yuan, mainly due to the sharp decline of the proctor’s index of Q4 iron ore, which fell to 87.20 US dollars / ton, down 63% from the high of 233.10 US dollars / ton in the year, and the sales settlement price of iron ore products of Q4 company fell to some extent; In the year of 21, Rockwell petroleum plans to withdraw $23.18 million of exploration asset impairment reserves; The board of directors considered and approved that the company will make a one-time provision of about 150 million yuan for the expenses of employees leaving their posts for retirement in the year 22-24, which is expected to affect the net profit attributable to the parent company in the consolidated statements of -112.5 million yuan.
The transformation of new energy is worth looking forward to. The “14th five year plan” of the company will take the mining, beneficiation and processing business of upstream mineral resources in the new energy industry as an important direction of industrial transformation and upgrading in the next five years. In August 21, the company plans to invest in the construction of 20000 tons of battery grade lithium hydroxide (phase I) in Dongfang City, Hainan. The land acquisition of the project is under way. The process flow and plane layout design of the project have been completed, and the construction will be officially started after obtaining the land. Li Jing’s bearing continues, and the average price in 22-23 years will be maintained at 300000 yuan / ton. Considering the one-and-a-half year cycle of the company’s project construction, it is expected to continue to enjoy the high prosperity dividend of the industry after it is put into operation in early 23.
The main industry of iron ore + oil and gas has developed steadily. In the 21st year, due to the favorable influence of iron ore, oil and gas and other bulk commodities along the cycle, the sales price of the company’s products increased and the profit increased. At the same time, the holding subsidiary of the company, rockoil, acquired 100% equity of BAJIAOCHANG natural gas field in May 21, further improving its profitability. In November 21, the company officially started the construction of Shilu iron ore suspension magnetization roasting technology to fixed value-added project. After the project is completed, the grade of the company’s iron concentrate will be increased from 62.5% to more than 65.0%, and the recovery rate of iron metal will be increased from 60.0% to 85.0%.
Profit forecast & investment suggestions
According to the performance forecast for 21 years, the net profit attributable to the parent company for 21-23 years was reduced by 23%, 29% and 29% to 894 million yuan, 1059 million yuan and 1684 million yuan respectively, with corresponding EPS of 0.44 yuan, 0.52 yuan and 0.83 yuan respectively, and corresponding PE of 27 times, 23 times and 14 times respectively, maintaining the “buy” rating.
Risk tips
Risk of lithium battery new business not meeting expectations, risk of iron ore and crude oil price fluctuation, exchange rate risk, etc
