\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 988 Chifeng Jilong Gold Mining Co.Ltd(600988) )
External mine development + internal mine potential tapping, and the number of gold upstarts increased simultaneously:
1) Company alpha
① performance: there is room for optimization of rapid volume of foreign mines + cost
Volume: Chifeng Jilong Gold Mining Co.Ltd(600988) in the case of relatively small mine volume in China, accelerate the pace of overseas gold mine M & A. Vientiane gold mine and wasa gold mine, as mature mines in production, can contribute major gold output to the company every year. In 2022 / 2023, we expect the total contribution output of Vientiane + wasa + inner mine to be 8.5 + 5.5 + 3 = 17 tons and 10 + 7 + 3 = 20 tons respectively. Vientiane and wasa mines have great potential for increasing reserves, and gold production may rise to a higher level in the future.
Profit: a) due to the relatively complex metallogenic conditions and high cost, Vientiane mine is in the optimization stage at the initial stage of project completion. The recovery rate is improved by building new oxygen compressor equipment. It is estimated that the full cost will be reduced from US $1400 to US $1200, and may be further reduced to US $1100 in the future; b) Vasa mining is relatively mature, and there is room for continuous cost reduction through shaft engineering efficiency improvement, control of procurement costs and management expenses. The full cost is also expected to be reduced from US $1300 to US $1200, and may be further reduced to US $1100 in the future; c) At present, the cost of Nei mine is low, and there is little room for cost reduction.
② strategy: focus on gold, stabilize inside and expand outside
The company's current development strategy takes gold as the main line, and the business outside the mining industry is gradually stripped off. In 2021, the solid waste treatment enterprise Xiongfeng environmental protection is stripped off. At present, Guangyuan Technology, which is still in the body of listed companies, is engaged in demolition business, with a small volume. With the strategic support of focusing on the main business of gold, at present, the asset liability ratio of the company has decreased from 60% to 39%, and the proportion of gold revenue has increased from 40% to 84%. The company's approach to developing gold business is to expand inside and outside steadily. The inner mine is mainly to tap potential, and the outer mine is mainly to acquire high-quality resources. SEPON mine and wassa mine were acquired in 2018 and 2021 respectively, and they are both in production mines with high resource reserves. Through the improvement of the company's technology, equipment and management, both mines have large volume space, and the strategy of international mining enterprises has been steadily promoted, Overseas assets account for more than 70%.
2) industry beta: high inflation and low real interest rate hidden under risk aversion support the gold price center to remain high
At present, the gold price has risen to US $1920 / oz, which seems to be the impact of risk aversion caused by the repeated conflict between Russia and Ukraine and the epidemic, but behind it is the high inflation and low real interest rate that are difficult to change in the short term. The US CPI data in February increased by 6.4% year-on-year. Under the background of high inflation, it is difficult for the US bond interest rate to outperform inflation, especially the current economy seems to be in a stagflation state, Compared with conventional inflation, it is more difficult to quickly get out of inflation through monetary means. It is difficult for the rhythm of the Fed's interest rate hike to have a greater upward driving force on the real interest rate, which is good for the gold price center to maintain a high level. We believe that the gold price center may further rise to $20 Yunnan Yuntou Ecology And Environment Technology Co.Ltd(002200) / ounce, which also brings both volume and price to the company.
Investment advice
We expect the company to achieve revenue of 4.02 billion yuan, 7.36 billion yuan and 8.8 billion yuan respectively from 2021 to 2023, with a year-on-year increase of - 12%, + 83% and + 20% respectively; The net profit attributable to the parent company was 850 million yuan, 2.06 billion yuan and 2.81 billion yuan respectively, with a year-on-year increase of + 8%, + 143% and + 37% respectively. The PE corresponding to the current market value is 32x, 13X and 10x respectively. For the first time, give a "buy" rating.
Risk tips
The gold price is lower than the expected risk, the mine output is lower than the expected risk, the project progress is affected by the overseas epidemic and the local political environment, the resource exploration is lower than the expected risk, and the safety accidents affect the production risk.
