\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
The company announced the first quarterly report of 2022: in 2022q1, the company achieved a revenue of 64.771 billion yuan, a year-on-year increase of 36.4% and a month on month increase of 15.4%; The net profit attributable to the parent company was 6.124 billion yuan, a year-on-year increase of 143.9% and a month on month increase of 40.1%; Net profit deducted from non parent company was RMB 6.043 billion, with a year-on-year increase of 144% and a month on month increase of 44.2%. It achieved the best first quarter performance in history and exceeded our expectations.
In 2022q1, the core of the substantial year-on-year and month on month growth of gross profit lies in the contribution of mineral copper sector. In 2022q1, the gross profit of the company increased by 4.111 billion yuan year-on-year and 1.443 billion yuan month on month, of which the gross profit of mining copper production business increased by 911 million yuan month on month and 3.45 billion yuan year on year, contributing 58% and 75% of the gross profit increment respectively. The core reason for the month on month growth of gross profit in 2022q1 lies in the resonance of volume increase, price increase and cost decrease. The increase of sales volume, the increase of selling price and the decrease of cost have brought about the thickening of gross profit of about 690 million yuan, 470 million yuan and 220 million yuan respectively, contributing 50%, 34% and 16% of the growth of gross profit of mining products respectively.
Single quarter measurement, price and this data: 2022q1, ① sales side: mineral gold, mineral silver, mineral copper, mineral zinc and iron concentrate were + 4.97%, + 21.65%, + 10.00%, – 8.00% and – 3.51% month on month respectively, of which the output of mineral gold increased by only 0.75% month on month, and the growth of sales volume mainly came from the sales of zelavshang inventory; The sales growth of mineral copper may mainly come from the climbing production of Julong copper mine, koluwezi, bor and other projects. ② Price side: mineral gold, mineral silver, mineral copper, mineral zinc and iron concentrate were + 1.90%, + 2.45%, + 2.19%, + 11.77% and – 7.59% month on month respectively. ③ Cost side: mineral gold, mineral silver, mineral copper, mineral zinc and iron concentrate were + 0.65%, – 7.64%, – 1.43%, – 12.77% and – 39.75% month on month respectively.
Look forward to the blooming of the three copper mining clusters. In the copper sector, the three world-class copper mines will contribute a large increment every year in 2022. According to our calculation, under the assumption of copper price of 66000 yuan / ton (including tax) and gold price of 400 yuan / gram (including tax), kamoa kakula, Timok and Julong copper mines may contribute net profit attributable to the parent company of 3.17 billion yuan, 5.39 billion yuan and 1.66 billion yuan respectively in 2022. In the gold sector, the signing of the amendment to the start-up agreement of bogla Gold Mine indicates that the resumption of production of bogla gold mine is imminent. It is expected that bogla will contribute about 4 tons to the company’s equity mineral gold production in the future. In addition, the multi project technical transformation in 2022 is expected to increase the annual output of gold by 12 tons and complete the annual output planning. In the new energy sector, the company acquired lithium salt lake to enter the field of new energy metals. It is expected that it will have an annual capacity of 20000 tons of lithium carbonate by the end of 2023, and the target of lithium carbonate capacity in 2025 is 50000 tons. We predict that the company’s copper output may reach 88 / 102 / 112 / 1370000 tons, gold output may reach 62 / 76 / 81 / 84 tons, and copper output may exceed 1 million tons in 2023, reaching the production target of 2025 ahead of schedule.
Profit forecast and investment suggestions: the company may be ushering in a new era of performance and valuation. The output guidance of the main product copper, gold, zinc and lead in 2022 is significantly higher than that in 2021. The superimposed copper and gold price is expected to remain high. We continue to be optimistic about the realization of the company’s alpha logic. We maintain the company’s profit forecast. It is expected that from 2022 to 2024, the company will realize net profit attributable to the parent company of 27.4 billion yuan, 31.6 billion yuan and 32.4 billion yuan. The PE corresponding to the closing price on April 11 is 11x, 10x and 9x, maintaining the “recommended” rating.
Risk tip: the project progress is less than expected, the price of copper and gold falls, geopolitical risks, etc.
