\u3000\u30 China Baoan Group Co.Ltd(000009) 75 Yintai Gold Co.Ltd(000975) )
Event: the company issued the 2021 annual report. The company achieved an annual operating revenue of 9.04 billion yuan, a year-on-year increase of 14.35%; The non net profit attributable to shareholders of listed companies was 1.202 billion yuan, a year-on-year increase of 3.3%; The basic earnings per share was 0.459 yuan, a year-on-year increase of 2.48%.
The reserves of gold resources have increased significantly, and the value of the company’s mining rights may increase: by 2021, the company has 7 mining rights and 13 exploration rights, with a total resource ore volume of 1019417 million tons (year-on-year + 29.6%). Among them, the amount of gold metal is 170452 tons (+ 76.9%), silver metal is 715406 tons (- 2.8%), lead + zinc metal is 1076400 tons (- 37.4%), copper metal is 63500 tons and tin metal is 18200 tons. In 2021, the company acquired 60% equity of Huasheng gold mine through cash acquisition and included it in the scope of consolidated statements. In addition, the company invested 101.9 million yuan (+ 26.6%) in exploration during the year, including copper tin ore found in the deep part of huaaobao special silver lead mine, important copper gold ore body found in Banmiaozi, Jilin Province, and 10.87 tons of gold metal newly explored in Dachaidan. We expect that with the advancement of the company’s exploration progress and the implementation of the company’s reserve increase plan, the mineral right report of each mining area or the update of the resource of copper, tin and gold and other metals, the company’s mineral right value and reserve scale may be further improved.
The output of mineral products increased steadily, and the capacity of the later project will continue to expand: in 2021, the output of mineral gold / silver / lead / zinc and copper of the company reached 7.21 tons / 178.37 tons / 10500 tons / 13200 tons and 201 tons respectively, and the output of mineral products increased by + 18% / + 14.3% / + 9.2% / + 15.4% and + 43.2% respectively, of which the output of Heihe Yintai, Jilin Banmiaozi and Dachaidan reached 2.854 tons (accounting for 39.6%), 2.218 tons (30.8%) and 2.136 tons (29.6%) respectively. With the completion of the reconstruction and expansion of Heihe Yintai concentrator, the promotion of Banmiaozi shaft and lane project, the full completion of the reconstruction project of Yulong mining concentrator (there is still room for the release of lead-zinc and silver output), the completion of the underground exploration and pit glass project in Dachaidan, the increase of the production capacity of Huasheng gold mine (the annual output scale increases from 100000 tons to 1.2 million tons) and the lifting of the sealing of the mining Certificate (the open-pit mining party has the conditions for rapid resumption of production), We expect that the company’s mineral gold output may still have more than 30% growth space.
The output cost of core mineral products increased, and there was room for optimization in the later stage: Although the comprehensive gross profit margin of the company’s mineral products remained at a high level (59.2%), the overall production cost of the company’s mineral products increased due to the rising factors such as mining preparation drilling and raw materials. In the past 21 years, the company’s cost of mineral gold increased by + 11.9% to 148.82 yuan / g (gross profit margin 60.3%), the cost of mineral silver increased by + 32.3% to 1.72 yuan / g (gross profit margin 65.8%) and the cost per ton of mineral lead and zinc refined powder increased by + 25% and + 64.4% to 5289.3 yuan / ton and 6514.3 yuan / ton respectively (gross profit margin above 55%). Considering that the expansion of the company’s mining production scale and the plan can effectively improve the production capacity and equipment operation rate, it is expected that the company’s unit output cost may fall, and the appearance of the scale effect of output means the increase of gross profit of mineral products in the later stage.
The financial risk is low, and many indicators are better than the average level of the industry: the asset liability ratio of the company has been low for a long time. Although the asset liability ratio of the company increased by 8.3pct to 22.56% (the median of the gold industry is 44.6%), it is still the mining enterprise with the lowest asset liability ratio in the China National Gold Group Gold Jewellery Co.Ltd(600916) industry, indicating that the company has strong expansion ability. In addition, the company’s historical roe has been maintained at about 12% for a long time (the industry median value is 6.4%), and continues to rank among the top three in the industry; The operating profit margin has remained stable at around 21% since 2018 (the industry median value in 21 years is 1.86%), reflecting the strong operation and profitability of the company.
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. The price of zinc and lead may remain high under the background that the periodic supply of fundamentals is still tight. We expect the company to achieve operating revenue of 11.535 billion yuan, 14.069 billion yuan and 16.009 billion yuan from 2022 to 2024 respectively; The net profit attributable to the parent company was 2.01 billion yuan, 2.387 billion yuan and 2.839 billion yuan respectively; EPS is 0.72 yuan, 0.86 yuan and 1.02 yuan respectively, and the corresponding PE is 14.52, 12.23 and 10.28 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 progress of raising funds for investment and technical transformation of the project is lower than the expected risk, and the risk of mining right acquisition transaction.
