\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
Core view:
Investment Event: the company released the first quarterly report of 2022. In the first quarter of 2022, the company realized an operating revenue of 64.771 billion yuan, a year-on-year increase of 36.35%; The net profit attributable to shareholders of listed companies was about 6.124 billion yuan, a year-on-year increase of about 143.88%; The net profit attributable to shareholders of listed companies after deduction of non profits was about 6.043 billion yuan, with a year-on-year increase of about 144.01%; Earnings per share was 0.233 yuan, a year-on-year increase of 145.26%.
The volume and price of gold and copper rise together, the cost control is stable, and the profit goes up again. With the successful operation of key projects such as the upper belt of peji copper and gold mine in Serbia, kamoa kakula copper mine and Julong copper mine in Tibet, the output of the company’s main mineral varieties continues to grow. During the reporting period, the company produced 13100 kg of mineral gold, with a year-on-year increase of + 17.19% and a month on month increase of + 0.75%; The production of mineral copper was 193600 tons, with a year-on-year increase of + 52.7% and a month on month increase of + 9.98%; 108200 tons of mineral zinc were produced, with a year-on-year increase of + 12.38% and a month on month increase of – 2.54%. In terms of product price, the average sales price of mineral gold of 2022q1 company was 350.20 yuan / g, up 0.06% year-on-year and 1.80% month on month; The average sales price of mineral copper was 55348 yuan / ton, up 10.92% year-on-year and 2.72% month on month; The average sales price of mineral zinc was 17285 yuan / ton, up 38.31% year-on-year and 11.77% month on month. In terms of cost, the unit sales cost of mineral gold of 2022q1 company was 172.85 yuan / g, a year-on-year increase of – 3.53% and a month on month increase of + 0.49%; The unit sales cost of mineral copper was 18305 yuan / ton, with a year-on-year increase of -0.49% and a month on month increase of -0.23%; Only due to the decline of mine grade, the unit sales cost of mineral zinc increased by 13.28% year-on-year to 7063 yuan / g, with a chain comparison of – 12.77%. The price rise of the company’s main mineral varieties and the excellent performance in cost control increased the company’s comprehensive gross profit margin and the gross profit margin of mining enterprises by 2.36 and 3.87 percentage points to 17.32% and 61.12% respectively during the reporting period. The company’s net profit attributable to the parent company in 2022q1 reached a record high performance in a single quarter.
During the reporting period, the construction of key projects at home and abroad of the company was carried out in an orderly manner. In terms of copper mine, the company’s kamoa kakula copper mine phase II 3.8 million ton concentrator started commissioning with materials, which was completed and put into operation about 4 months ahead of the original plan. It plans to increase the original design mining and beneficiation capacity from 7.6 million tons to 9.2 million tons through one-year technical transformation, achieving an annual copper output of more than 450000 tons, becoming the fourth largest copper mine in the world; The 40000 t / D technical transformation project of saizi copper VK mine is expected to be put into operation in 2022q2, and the new mineral copper output is about 35000 tons after reaching the production capacity; The first phase of Julong copper mine in China was put into operation in December 2021, and the preliminary work of the second phase project is being planned. In terms of gold mine, the Norton gold field binduli North low-grade ore project with an annual raw ore capacity of 5 million tons is expected to be completed and put into operation in 2022q3, and the output of mineral gold will be increased by about 2.5 tons after it is completed; The construction of Norton gold field refractory gold mine project has started, and strive to be completed and put into operation by the end of 2022; The main project of intelligent mining, dressing, reconstruction and expansion of the new 6000 ton / day mine in Zijin, Shanxi Province is expected to be completed in 2022q2, and the output of mineral gold will be increased by 3-4 tons after reaching the production capacity. In terms of new energy metals, the company’s first lithium mine project, Argentina 3Q salt lake lithium extraction project, has been officially started. The phase I 20000 ton battery grade lithium carbonate project is expected to be completed and put into operation by the end of 2023. At the same time, the company will continue to optimize the process design scheme, and the lithium recovery rate and output are expected to be further improved; The company will also simultaneously carry out the feasibility study of phase II project of 3q Salt Lake in Argentina to expand production as soon as possible. In addition, a large number of major projects such as the core project of caving mining in the lower ore belt of sazijin Peggy copper gold mine, the caving project of sazijin JM copper mine and the phase I project of Aurora mining are progressing smoothly.
Investment suggestion: several world-class mining projects of the company were successfully put into operation, and the superimposed energy pushed up the metal price, driving the company’s single quarter performance to a record high. At present, the company still reserves a number of key mining projects for development. In the future, the output of gold and copper mines will increase significantly, and strategically enter the development of new energy metal lithium and other resources with high growth, so as to lay a solid foundation for the growth of the company.
With the gradual release of the company’s new mineral output of gold and copper and the high metal price under high inflation, the company’s future performance is still expected to grow. It is estimated that the company’s net profit attributable to shareholders of Listed Companies in 20222023 will be 24.1 billion yuan and 26.8 billion yuan, corresponding to EPS of 0.92 and 1.02 yuan in 20222023 and PE of 13X and 11x in 20222023, maintaining the “recommended” rating.
Risk tips: 1) the price of gold, copper and other metals fell sharply; 2) The new project of the company was put into operation less than expected; 3) The release of new production capacity of the company is less than expected; 4) Overseas geopolitical factors.
