\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 988 Chifeng Jilong Gold Mining Co.Ltd(600988) )
Core view
The company is one of the gold enterprises with the fastest growth in output. At present, the company has established the development strategy of "focusing on gold". In 2021h1, the company achieved a mineral gold output of 3.9 tons, with a year-on-year increase of 225.62%. The growth rate of gold output in the current period ranks first in China. With the gradual shift of the company's production and operation to gold, the company's performance also continued to strengthen. The gross profit margin of the company has reached 32.4% in the first three quarters of 2021, about 1.6 PCT higher than that in 2020; The company's net interest rate has reached 21.72%, a five-year high.
Short, medium and long-term factors catalyze resonance, and the gold industry welcomes the allocation opportunity. In the short term, the Fed's interest rate hike process has begun. Looking back on the past interest rate hike process, the average rise and fall of gold in the first year and the first half of the year after the interest rate hike were 6.67% and 7.81% respectively. The release of risk factors significantly promoted the gold price. Meanwhile, as of March 31, 2022, the tonnage of the world's largest gold ETF increased by 11.9% over the beginning of the year, and market forces are also driving the strength of gold. In the medium term, the current expectation of stagflation is strong. In February 2022, the CPI of the United States increased by 7.9% year-on-year, reaching a new high in 40 years. As of March 31, the interest rate spread of us two-year-10-year treasury bonds had fallen to 0.04%. In the long run, the sanctions against Russia from Europe, America and other countries continue to escalate. At present, Russia has restricted the use of swift and some foreign exchange in the financial field. In this context, we expect that the proportion of the US dollar in the global foreign exchange reserves will accelerate downward on the basis of 59.2% in the third quarter of 2021, and the foreign exchange reserves of countries around the world will gradually move closer to physical assets such as gold, thus driving the demand for gold reserves to rise.
Comprehensively promote production and cost reduction, with solid internal skills to meet the glorious moment. The company is currently continuing to increase gold production and reduce gold costs. In terms of output, the company is adding new ore treatment projects in most mining areas in China. The 3000 t / D concentrator of Wulong mining is expected to be put into operation. The 800 t / D project of Jilong mining technology transformation is expected to be completed by the end of 2022. Meanwhile, according to the company's 2021 interim report, it is expected that the gold output of SEPON mine in Laos will reach 10-12 tons in 2022, with a maximum increase of 4 tons compared with 2021. In terms of cost, in recent years, the company has gradually invested in new projects, and some equipment of relevant projects need to be debugged in the initial stage of construction. Therefore, the gross profit margin of the mining industry shows a certain downward trend, but rebounded in 2020, reaching 37.4%. With the completion of mining projects in wasa and the gradual increase of the production cost of related projects in wasa, Laos, it is expected that the construction cost of mining projects in wasa will continue to rise in the future.
Investment advice
The value of gold continues to highlight, the company's development plan is clear, and the company's future performance is expected to continue to grow. It is expected that the company's net profit attributable to the parent company in 2021, 2022 and 2023 will be 795 / 20.04 / 2.529 billion yuan respectively, and the corresponding EPS will be 0.45/1.05/1.25 yuan respectively. Based on the closing price of 21.73 yuan on April 11, 2022, the corresponding PE is 48.70/20.62/17.36 times respectively. Combined with the prosperity of the industry, we are optimistic about the development of the company. For the first time, give a "strongly recommended" rating.
Risk tips
International geopolitical changes, repeated covid-19 epidemic and changes in environmental protection policies.
