\u3000\u3 Shengda Resources Co.Ltd(000603) 993 China Molybdenum Co.Ltd(603993) )
The company released the annual report of 2021: the 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%; The net profit deducted from non parent company was 4.103 billion yuan, a year-on-year increase of + 276.24%. 21q4 achieved a revenue of 47.304 billion yuan in a single quarter, a year-on-year increase of + 44.77% and a month on month increase of + 13.32%; The net profit attributable to the parent company was 1.548 billion yuan, a year-on-year increase of + 115.19% and a month on month increase of + 34.61%; The net profit deducted from non parent company was RMB 2.189 billion, with a year-on-year increase of + 549.86% and a month on month increase of + 326.71%. The proportion of cash dividends in 2021 is about 30%. The company achieved its best year in history.
In 2021, the company achieved good results in expanding production and increasing efficiency of key projects, and the output of TFM copper and cobalt reached a new high in recent years. In 2021, the output of molybdenum metal was 16385 tons, a year-on-year increase of + 18.90%, and the output of tungsten metal was 8658 tons, a year-on-year increase of – 0.25%; NPM (80% equity) produced 23534 tons of copper metal, a year-on-year increase of – 12.83%, and 22034 ounces of gold, a year-on-year increase of + 5.44%; TFM produced 209120 tons of copper metal, a year-on-year increase of + 14.53%, and 18501 tons of cobalt metal, a year-on-year increase of + 19.86%; The output of niobium metal was 8586 tons, with a year-on-year increase of – 7.68%, and the output of phosphate fertilizer (HA + LA) was about 1.12 million tons, with a year-on-year increase of + 2.75%. In addition, according to the production guidelines for 2022 given by the company, TFM copper and cobalt production still has room for growth, and the copper production is expected to be 2270 Guosheng Financial Holding Inc(002670) 00 tons; The output of cobalt is 175 Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) 0 tons.
The company still has great growth potential in the copper cobalt sector of DRC in the future. In 2021, the company released TFM copper cobalt mixed ore project, which plans to invest 2.51 billion US dollars and plan to build three production lines, namely 3.5 million T / a mixed ore production line, 3.3 million T / a oxidized ore production line and 5.6 million T / a mixed ore production line, with a total annual ore processing capacity of 12.4 million tons. The project is planned to be completed and put into operation in 2023. When it is completed, it is estimated that the annual output of new copper is about 200000 tons and that of new cobalt is about 17000 tons. In addition, in April 2021, the company signed the strategic cooperation agreement with the Contemporary Amperex Technology Co.Limited(300750) indirect holding company Bangpu times. Bangpu times acquired 25% of the equity of KFM company with a total consideration of USD 137.5 million through its wholly-owned subsidiary, times new energy. Kisanfu mining area is rapidly promoting the preliminary work such as compensation, environmental assessment, river diversion, mining right integration, feasibility study design optimization and surface clearing. To sum up, the company has two high-quality copper and cobalt mines, TFM and KFM. As a responsible cobalt producer, the company is expected to carry out overall planning and development of TFM and KFM projects in the future, so as to give full play to the synergy with the existing business in DRC.
Risk warning: the price of core products fell; The production and sales of core products did not meet expectations.
Investment suggestion: raise the profit forecast and maintain the “buy” rating.
The profit forecast is raised. It is estimated that the company’s revenue from 2022 to 2024 will be 2084 / 209.5/215.4 billion yuan respectively, with a year-on-year growth rate of 19.9% / 0.5% / 2.8%; The net profit attributable to the parent company was RMB 6.935 billion / 7.429 billion / 9.101 billion respectively, with a year-on-year growth rate of 35.8% / 7.1% / 22.5%; Diluted EPS is 0.32/0.34/0.42 yuan respectively, and the corresponding PE of the current stock price is 16 / 15 / 12x. Considering that the company’s global multi variety layout can effectively reduce risks, effective internal cost reduction and efficiency improvement measures, rich reserves of existing mine resources, and copper and cobalt still have great growth potential in the future, the “buy” rating is maintained.
