\u3000\u3 Shengda Resources Co.Ltd(000603) 993 China Molybdenum Co.Ltd(603993) )
Events
The company released its 21st Annual Performance express on the evening of March 15. In 21 years, the company's revenue was 173863 billion yuan, a year-on-year increase of + 53.89%; The net profit attributable to the parent company was 5.106 billion yuan, a year-on-year increase of + 119.26%; EPS is 0.24 yuan.
Commentary
High bulk prices drive high profits, and there is still room for improvement in 22h1 month on month. 1) Price: in the past 21 years, the prices of the company's main products have increased significantly. The average price of 21q4 LME copper + 90% / MB cobalt + 35%, and the average price of LME copper + 51% / MB cobalt + 56% throughout the year. The rise of product price has contributed to great performance elasticity. 2) Volume: the expansion project of copper cobalt mine in the Democratic Republic of the Congo reached production in September, and the output of copper cobalt in Q4 is expected to further increase compared with Q3. In the second half of the year, affected by the poor logistics of South African ports, copper and cobalt production was not converted into sales in time, and the sales volume of Q4 is expected to be the same as that of Q3. It is expected that the annual copper sales volume will be stable year-on-year, and the cobalt sales volume will decline; The production and sales volume of other products changed slightly. 3) The 21h2 logistics problem delayed the profit realization of the company's new copper and cobalt production. Under the condition of high commodity prices and gradual easing of logistics problems, there is still room for improvement in the chain comparison of 22h1 performance.
Since 22 years ago, Indonesia's nickel sector has contributed new growth points. The company indirectly holds 30% equity of Huayue nickel cobalt, which is accounted as an associated enterprise. The Huayue Indonesia wet process project was put into operation at the end of the 21st century and is expected to reach production in 22h1. After that, it can produce 60000 tons of nickel + 7800 tons of cobalt metal MHP per year. Conservative calculation of the profit of the Huayue project: as the wet method has significant cost advantages over the fire method, the cost of the fire method is conservatively estimated at about 10000 US dollars / ton of nickel. Under the assumption of 140000 yuan / ton of electrolytic nickel tax inclusive price and MHP nickel discount coefficient of 0.9 throughout the year, the gross profit of the Huayue project can reach 2.9 billion yuan, forming a strong supplement to the company's profit. From January to February of 22, the average price of electrolytic nickel was 170000 yuan / ton. Under the high nickel price, the profit increment contributed by 22q1 Huayue is worth looking forward to.
The output of copper and cobalt is expected to double within three years. The TFM copper cobalt mixed ore project announced by the company in August 21 is expected to be put into operation in 23 years. After the project is completed, the annual ore processing capacity reaches 12.4 million tons, which can increase the output of 200000 tons of copper + 17000 tons of cobalt. The output is doubled compared with the current level. After the scale effect is enhanced, the cost can be further optimized, and the increase of volume + profit will bring strong medium-term performance growth.
Investment advice
Considering that the sales volume of copper and cobalt in 21 years is slightly lower than our previous forecast due to logistics problems, we reduce the profit in 21 years, and the forecast change from 22 to 23 years is small. It is estimated that the net profit attributable to the parent company in 21-23 years will be 51.06 (down - 10.30%) / 6.747/7.758 billion yuan respectively, the corresponding EPS will be 0.24/0.31/0.36 yuan respectively, and the corresponding PE will be 20 / 15 / 13 times respectively, maintaining the "buy" rating.
Risk tips
The project is not put into operation as expected; The price of metal is lower than expected; RMB exchange rate fluctuation risk, etc
