Zijin Mining Group Company Limited(601899) (601899)
Event: Julong copper phase I project was completed and put into operation.
On December 27, 2021, the company announced that the phase I project of Tibet Julong copper industry was completed and put into operation, and the overall goal of completion and operation by the end of 2021 was successfully achieved. After the phase I project of Qulong copper mine is put into operation, coupled with the output of zhibula copper mine, Julong copper is expected to produce 120000-130000 tons of copper in 2022; After the first phase of the project is completed, the annual output of copper is about 160000 tons.
Julong copper mine is the largest world-class porphyry copper mine in China.
Julong copper owns the mineral rights of Qulong Copper Polymetallic Mine, rongmutola copper mine and zhibula Copper Polymetallic Mine in Tibet, with resource reserves of 10.72 million tons of copper and 570000 tons of associated molybdenum; Qulong Copper Mine and rongmucola copper mine are the same porphyry copper ore body. At present, they are applying for the merger of mining rights; After the merger, the mine name will be renamed Julong copper mine, which is the largest world-class porphyry copper mine in China. There are a large number of low-grade copper resources with a grade of about 0.2%, and the total amount of resources (according to the boundary grade of 0.15%) exceeds 20 million tons. At present, Julong copper is carrying out the overall planning of mine development, and is finally expected to achieve an annual mining and beneficiation ore volume of about 200 million tons, with an annual copper output of 600000 tons, becoming one of the largest copper mines in the world.
After the project is put into operation, it will steadily boost the output and increase the profit of 3.34 billion yuan.
① Cost: according to the feasibility study report at the time of Zangge Holding Company Limited(000408) acquisition, the unit production costs of open-pit mining and underground mining and beneficiation of zhibula Copper Polymetallic Mine are 17400 yuan / ton and 30800 yuan / ton respectively, and the unit copper production cost of Qulong Copper Polymetallic Mine is 20500 yuan / ton, which has obvious advantages in ton cost.
② Output: Julong copper mine is put into operation to increase output. It is estimated that the total copper output of Julong copper mine from 2021 to 2023 will be 117500, 127200 and 177600 tons. We expect that from 2021 to 2025, the copper output of the company is expected to reach 560000 tons, 820000 tons, 910000 tons, 950000 tons and 1.03 million tons respectively, becoming a leading copper company in the world.
③ Profit: from 2021 to 2024, the net profit attributable to the parent company of Julong copper mine may be 117 million yuan, 1.107 billion yuan, 1.531 billion yuan and 1.675 billion yuan.
Profit forecast and investment suggestions:
The company is ushering in a period of high performance. The product price is high. Kamoa, Timok shangdai mine and Julong copper mine have been put into operation. The subsequent mainland gold, Norton gold field technical transformation and other projects are gradually put into operation. The company will usher in a period of rapid growth of performance with both volume and price. We continue to be optimistic about the fulfillment of the company’s alpha logic and raise the company’s profit forecast, From 2021 to 2023, the company is expected to realize net profit attributable to the parent company of 16.6 billion yuan, 25.8 billion yuan and 27.3 billion yuan, and PE corresponding to the closing price on December 31 is 15x, 10x and 9x. At present, wind of comparable companies in the industry ( Jiangxi Copper Company Limited(600362) , Yunnan Copper Co.Ltd(000878) , Western Mining Co.Ltd(601168) , Yintai Gold Co.Ltd(000975) ) unanimously expects PE to be 15 times in 2022. The company’s valuation is lower than the average of comparable companies, maintaining the company’s “recommended” rating.
Risk tips:
The progress of the project is not as expected, the price of copper and other major metal products fluctuates, geopolitical risks, etc.
