\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
Events
The company’s annual report was released on March 18, 2021. During the reporting period, the company achieved an operating revenue of 225102 billion yuan, a year-on-year increase of 31.25%; The net profit attributable to the parent company was 15.673 billion yuan, a year-on-year increase of 140.80%.
Comments
The output of main minerals continued to increase, and the leading position continued to deepen. In terms of gold business, in 2021, the company achieved a cumulative output of 47.5 tons of mineral gold, a year-on-year increase of 17.2%; The gold output is slightly lower than the early planning target. With the continuous production of incremental projects such as the reconstruction and expansion of the company’s gold mine in the future, the company’s gold output is expected to continue to rise. In terms of copper business, the company achieved a cumulative mineral copper output of 584000 tons in 2021, a year-on-year increase of 28.8%; In 2021, the successive production of important copper mines such as kamoa copper mine and Timok upper ore belt has significantly increased the company’s mineral copper output. In the future, with the production expansion of many world-class copper mines such as Julong and kamoa, the company will become the fastest growing company of mineral copper of major copper enterprises in the world.
The traditional business continued to expand production, and the new energy business began to layout. In terms of traditional business, the company is expected to produce 860000 tons of mineral copper, 60 tons of mineral gold, 480000 tons of mineral zinc (lead), 3.2 million tons of iron concentrate and 310 tons of mineral silver in 2022. Among them, the output of mineral copper and mineral gold will increase by 47.3% and 26.3% respectively compared with 2021. In terms of new energy business, the company has completed the project merger and acquisition of 3q lithium salt lake in Argentina. As one of the largest and highest grade projects of the same type of Salt Lake in the world, the company’s lithium carbonate (LCE) capacity is expected to reach 50000 tons in 2025.
Gold prices are expected to rise strongly, and the company is expected to usher in a simultaneous rise in volume and price. Judging from the current gold market situation, the US inflation level continues to be high, and the power of gold price rise is sufficient. According to the data of the US Department of labor, the US CPI rose by 7.9% year-on-year in February 2022, and the inflation level hit a 40 year high. In this context, the current price of London gold has closed at US $192120/oz on March 18, 2022, up about 5.9% from the beginning of the year. It is expected that the gold price will continue to be strong in the future. With the continuous expansion of the company’s gold production and the simultaneous rise of volume and price, the company’s performance is expected to continue to shine.
Investment advice
The output growth of the company is clear, and the product price is generally upward. It is expected that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 22.8/24.4/26.3 billion yuan and EPS will be 0.86/0.93/1.00 yuan respectively, corresponding to 12.30/11.47/10.64 times of the share price PE on March 18, 2022. Maintain a “strongly recommended” rating.
Risk tips
The production progress of the project is less than expected, the mining environmental protection policy changes significantly, and the exchange rate fluctuates.
