\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
Event: the company issued the 2021 annual report. The company achieved operating revenue of 225.1 billion yuan in 2021, with a year-on-year increase of 31%; The net profit attributable to the parent company was 15.67 billion yuan, a year-on-year increase of 141%; The non net profit attributable to the parent company was 14.68 billion yuan, a year-on-year increase of 132.2%; Basic earnings per share + 140% to 0.60 yuan. The volume and price of the company's main metal products increased simultaneously, which promoted the substantial growth of the company's performance.
Technological innovation advantage has become the core competitiveness of the company. The continuous technological innovation advantage has become the core guarantee for the company to build a "green high-tech super first-class international mining group". The company has profound experience and strong technical advantages in geological survey, mine design, construction and operation, hydrometallurgy and resource recycling, large-scale project development and management, etc. From the data observation, the effective geological exploration technology enables the company to independently investigate the new copper, gold and zinc (lead) resources over the years, accounting for 49.6% (31.16 million tons), 54.6% (1295 tons) and 85.1% (8.19 million tons) respectively; The "five rings of ore flow" management mode of the company takes ore flow as the trend, from exploration and mining to beneficiation and metallurgy and environmental protection to form an overall control with high efficiency and high efficiency and maximize the economies of scale (the implementation of natural caving method in the later stage will further improve the output and cost advantage of the company). Technology and innovation advantages help to improve the company's Value Elasticity (low cost of increasing reserves of mining projects / obtaining mineral resources), improve the company's performance elasticity (low-cost and efficient operation), and help the company maintain a high growth trend (high growth rate of production capacity and output).
The company has abundant resource reserves and expands to the new energy industry: the company is the enterprise with the largest amount of mineral resources in China and the listed group with the largest China National Gold Group Gold Jewellery Co.Ltd(600916) resource reserves and copper resource reserves. The company has 2373 tons of gold metal reserves (year-on-year + 1.67%, accounting for 41.1% of the national reserves), 62.06 million tons of copper metal reserves (+ 1.14%, accounting for 72.3% of the national reserves), 9.62 million tons of zinc metal reserves (- 6.9%, accounting for 14.7% of the national reserves) and 7.63 million tons of new lithium carbonate resources. From the regional distribution of mineral resources, the company has mining projects in 13 countries around the world, of which overseas gold and copper resources account for 74% and 76% respectively; Overseas gold and copper production accounted for 60% and 53% respectively. In addition, the company actively distributes strategic emerging mineral resources. In addition to completing the M & A of the 3Q Salt Lake project in Argentina, the company also carries out hard rock lithium exploration in the Democratic Republic of the Congo. Considering the technical advantages of the company's mineral resources exploration, construction and operation, we believe that the company's mineral resources reserves may continue effective diversified development.
The company's mineral gold and copper business has formed a large-scale growth group effect: the company's 2021 annuity, copper, zinc and silver business output has shown structural expansion, with growth rates of + 17.2% / + 28.8% / 14.9% / + 3.38% respectively; Among them, the output of mineral products: Gold / copper / zinc / silver reached 475 tons / 584000 tons / 434000 tons / 309 tons respectively. The company has become the company with the fastest growth of copper production in copper mines in the world, and the company's three world-class copper projects have been gradually completed and put into operation (kamoa kakula / Timok / Tibet dragon). Among them, the trial production of kamoa kakula copper mine in 2022 (the trial production of 3.8 million tons concentrator has been started in advance) and the production capacity in 2023 (about 157000 tons of equity mineral copper), Timok upper belt mine (with an average of about 91400 tons of mineral copper), Qulong Copper Mine (with an estimated contribution of 65000 tons of equity mineral copper in 2022) and the technical transformation of MS and VK mines of rtbbor (about 70000 tons of equity mineral copper) have been completed. We expect the copper output of the company to rise to 930000 tons by 2024, 59% higher than 2021. In addition, from the view of the company's mineral gold sector, with the completion of 4000 tons / day technical transformation and expansion of wulitika gold mine (6.3 tons of annual equity mineral gold, reaching 9.1 tons after the overall delivery), the completion of technical transformation and process optimization of Guyana gold mine (2 tons of new gold, with an annual output of about 3.3 tons of mineral gold in 2022), and the completion of 2000 tons / day mining and beneficiation of Longnan Zijin LIBA Gold Mine (about 5 tons of mineral gold in 2022), The 6000 T / D reconstruction and expansion project of Shanxi Zijin has reached the production capacity (put into operation in Q2, 2022, and the annual increase of mineral gold is about 3.5 tons), the 5 million T / a technical transformation and process optimization of Norton gold field have been completed (2.5 tons of new gold, and the annual output of mineral gold is about 6 tons in 2022), and the technical transformation of mercury cave gold mine (about 2.5 tons of gold in 2022). It is expected that the annual output of mineral gold of the company will reach 84 tons by 2024, an increase of 76.8% over 2021.
The company's resource advantage has been effectively transformed into benefit advantage: the company's mineral resources with rich reserves and low cost are superimposed, and the effective project optimization highlights the company's overall production cost competitiveness. In 2021, under the background that the total cost of ore raw materials increased by 46.2% year-on-year, the company's overall mineral gross profit increased by 11.27pct to 58.98%, of which the production cost of mineral gold and mineral copper decreased by 0.66% (to 176.22 yuan / g) and 9.46% (to 18194 yuan / ton) respectively. Considering the completion of the technical transformation of the company and the mine / smelting, the scale benefit of the company is expected to be further expanded. We believe that the overall gross profit level of the company is expected to increase from 15.4% to 17.3%.
The company began to expand into the field of new energy and new materials and accelerated the establishment of ESG system: the company has begun to enter the metal mineral resources related to new energy and new materials such as lithium, cobalt and nickel, and has established a new energy and Materials Research Institute. In the later stage, the company will promote production factor projects related to clean energy construction, such as lithium iron phosphate, high-performance alloy materials and electrolytic copper foil. The appropriate extension of the company's industrial chain will help the company further transform its resource advantages into benefit advantages. In addition, the company has accelerated the establishment of a highly adaptable and international ESG governance system, which is conducive to the sustainable and orderly development of the company's overseas business, and the company's latest ESG rating has obtained a - in the Hang Seng sustainable development index.
Profit forecast and investment rating: considering the fermentation of gold hedging premium, liquidity premium and exchange rate premium and the trend expansion of global physical position ETF, the average price of RMB gold may remain above 400 yuan / g. Copper prices remain strong periodically due to the tight supply at the mine end and the expansion of new energy demand. From a long-term perspective, the continuous tight balance between copper supply and demand is expected to guide copper prices to maintain a high level before 2023. We estimate that the company's operating revenue from 2022 to 2024 will be 266.97 billion yuan, 296726 billion yuan and 320993 billion yuan respectively; The net profit attributable to the parent company was 21.797 billion yuan, 24.564 billion yuan and 26.523 billion yuan respectively; EPS is 0.83 yuan, 0.93 yuan and 1.01 yuan respectively, and the corresponding PE is 13.70, 12.16 and 11.26 respectively, maintaining the "recommended" rating.
Risk warning: the risk of sharp contraction of liquidity and the risk of falling metal prices; Risk that the output is lower than expected; The project raised investment progress and the project technical transformation progress are lower than the expected risk, the risk of exchange rate fluctuation and the risk of non force majeure in the country where the project is located.
