\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
Event: the company disclosed its 2021 annual report. 1) From the perspective of the whole year, the net profit attributable to the parent company will reach 15.7 billion yuan in 2021, with a year-on-year increase of 141%; The non net profit deducted was about 14.3 billion yuan, an increase of 83% year-on-year. 2) In a single quarter, 21q4 achieved a net profit attributable to the parent company of 4.4 billion yuan, a year-on-year increase of 126% and a month on month decrease of 5%; The non net profit deducted was 4.2 billion yuan, a year-on-year increase of 153% and a month on month decrease of 4%.
The rise in volume and price resonates with performance. Volume: in 2021, the sales of copper, gold and zinc were 567000 tons, 457000 tons and 399000 tons respectively, with a year-on-year increase of 26.1%, 19.5% and 14.9% respectively; Price: the selling prices of core minerals copper, gold and zinc in 2021 are 53600 yuan / ton, 34869 yuan / g and 14100 yuan / ton respectively. The simultaneous rise of volume and price of copper and zinc and the growth of gold output jointly boost the performance in 2021. Among them, the copper business contributed 24% of revenue and 53% of gross profit; Gold business contributes 45% of revenue and 21% of gross profit; Zinc (lead) business contributes 5% of revenue and 8% of gross profit; Silver, iron, cobalt, sulfuric acid and other businesses contributed 26% of revenue and 18% of gross profit.
The expansion of the three world-class copper mines was at the right time. In 2022, the copper output is 860000 tons, which is mainly due to the production of the three major copper mines. 1) Kamoa kakula copper mine: phase I 3.8 million ton concentrator was completed and put into operation in May 2021, with an annual output of 200000 tons of copper after reaching the production capacity, and 106000 tons of copper exceeded the plan in 2021; The phase II 3.8 million ton concentrator was put into operation four months in advance on March 21, 2022, and the overall annual output of the mine is expected to reach 340000 tons of copper; In the follow-up, the mining and beneficiation capacity of 7.6 million tons will be increased to 9.2 million tons through one-year technical transformation, realizing an annual output of 450000 tons of copper; After the third phase is put into operation in 2024, the annual output of copper is expected to exceed 800000 tons. 2) Peggy copper gold mine: the upper ore belt was officially put into operation in October 2021, with an annual output of 91400 tons of copper and 2.5 tons of gold, and a peak annual output of 135000 tons of copper and 6.1 tons of gold. 3) Julong copper mine: phase I was completed and put into operation in December 2021. It is estimated that the annual output of copper will be 160000 tons after reaching the production capacity.
The 20000 ton Salt Lake phase I project was started, and the strategic layout of the new energy track was the first work. In October, the company invested 4.9 billion yuan to acquire the new lithium company. Its core asset is the 3Q lithium salt lake project in Argentina, with 7.63 million tons of LCE resources, 1.67 million tons of LCE reserves and an average lithium concentration of 786mg / L. The delivery of the project was completed on January 25, 2012 and officially started on March 20. According to the feasibility study plan, the first phase of the project is to produce 20000 tons of battery grade lithium carbonate per year. The project investment is 2.4 billion yuan. It is mainly produced by precipitation process. It is expected to be completed and put into operation by the end of 2023. In view of the previous low lithium recovery rate, the company also believes that there is obvious room for improvement after preliminary experimental research; Meanwhile, the second phase of the project is also expected to start construction in 2023. After completion, the lithium salt production capacity will be increased by 4-6 tons. Back to the specific capacity, the company is expected to have 20000 tons of lithium salt capacity by the end of 2023 and 50000 tons of lithium salt capacity by 2025.
Investment advice: influenced by many factors such as overseas economic recovery and inflation expectations, copper and gold prices continue to remain high. The company is rich in mineral resources and the “Zijin model” improves the business efficiency. We expect the company’s revenue to be 277.65/313.29/323.76 billion yuan from 2022 to 2024, with a year-on-year growth rate of 23.3% / 12.8% / 3.4% respectively; The corresponding net profit attributable to the parent company was 27.307/31.8/35.42 billion yuan respectively, with a year-on-year growth rate of 74.2% / 13.8% / 13.9% respectively. The corresponding PE of the current stock price was 11x / 10x / 8x respectively, maintaining the “buy” rating.
Risk warning: the production of important mining projects under construction of the company is not as expected; Copper and gold prices fell sharply; Fluctuation of RMB exchange rate, etc.
