\u3000\u3 Shengda Resources Co.Ltd(000603) 979 Jchx Mining Management Co.Ltd(603979) )
Event: the company issued the 2021 annual report. The company achieved an operating revenue of 4.504 billion yuan in 2021, with a year-on-year increase of 16.57%; The net profit attributable to the parent company was 471 million yuan, a year-on-year increase of 28.93%; Basic earnings per share + 27% to 0.8 yuan. In addition, the company released the first quarter report of 2022 in the same period. The revenue of 22q1 company was + 22.68% to 1.142 billion yuan, the net profit attributable to the parent company was + 27.25% to 159 million yuan, and the EPS increased by 28.6% to 0.27 yuan.
The mine development service business grew steadily and rapidly, and the scale of mining operation and management increased. The company's mine development and management business has expanded steadily. The company has undertaken 32 large-scale mine engineering construction and mining operation management projects at home and abroad, and the total project revenue has risen to about 4.3 billion yuan (+ 15.6%). The total mining volume and excavation volume of the company in 21 years reached 329743 million tons and 3.5846 million cubic meters respectively (CAGR in recent 3 years was 7.67% and - 1.33% respectively). Considering the insufficient operation rate of mining projects caused by epidemic situation, logistics and other force majeure factors in 21 years, In combination with the company's operation target of 329743 million tons of mining volume (+ 3.45%) and 3.5846 million cubic meters of total tunneling volume (+ 6.23%) in 2022 (China Hainan Mining Co.Ltd(601969) , Western Mining Co.Ltd(601168) , Yunnan Chihong Zinc & Germanium Co.Ltd(600497) , Tianyi mining and other contracts have been effectively signed) and the gradual improvement of project operation rate, we believe that the company's mining business will continue to maintain strong growth in 22 years and the gross profit level may be further improved (or increased from 26.78% to 29.13%). In addition, the scale of the company's mining operation and management projects increased, and the proportion of its business in the main business income increased from 47.96% to 63.53%, while the proportion of mine engineering construction in the main business decreased from 48.1% to 31.7%, reflecting that some mine engineering projects have changed from construction period to operation period, which helps to strengthen the stability of the company's main business growth.
The company has entered a new stage of leapfrog development, and the proportion of international business has risen to 59%. The volume of overseas business of the company has increased rapidly (revenue + 35.8% to 2.54 billion yuan), accounting for 59.12% of the main business from 39.4% in 2019. On the basis of existing contracts, the company has successively signed mining contracts related to the lower ore belt of kamoa kakura, chukalu peji copper gold mine, baruba, the north mining area of southeast ore body, such as Wasi mining, which shows the continuous improvement of the company's popularity and expansion in the overseas mining service industry. The company's nearly 20 years of overseas operation experience has formed a replicable overseas business model of "management technology output + localized operation", and the company's competitive advantage in the overseas mining management market continues to appear (which can be confirmed by the expansion of the company's mining service mine project from a regional well-known mine to a world-class well-known mine). Considering the effective distribution of the company's mining business in mining resource countries such as South Africa, Mongolia, Indonesia, the Democratic Republic of the Congo, Zambia, Kazakhstan and Laos and the strong stickiness of mining stock projects, we believe that the company's overseas mine development and management business still has strong growth, and the company has entered a new stage of leapfrog development.
The company's own mine projects will contribute performance flexibility in 2022. At present, the company has three mining rights and seven exploration rights and shares in Columbia copper, gold and silver mining project. The total mineral equity reserves are 1.06 million tons of copper metal, 19.2 million tons of 32.65% high-grade phosphorus ore, 249 tons of silver metal and 7 tons of gold metal. Guizhou Liangchahe Phosphate Mine of the company (90% equity, mining right equity, resource volume of 21.334 million tons, annual production capacity of 800000 tons, p205 grade of 32.7%, 300000 tons in the southern mining area, construction period of 1 year, 500000 tons in the northern mining area, construction period of 3 years) Dikulushi (DRC) (100% equity, 80000 tons of equity copper metal and 192 tons of silver, with copper and silver grades as high as 6.33% and 144g / T respectively, 150000 tons of ore per year, put into operation in December 21, and expected to produce 10000 tons of copper metal in 22 years) Congo (DRC) lonshi (100% equity, current equity copper metal 870000 tons @ 2.82%, with long-term storage prospects, with an annual output of 40000 tons of copper after reaching the production capacity, which is planned to be put into operation at the end of 23 and reach the production capacity in 24 years) and Colombia sanmatias copper, gold and silver mine (19.995% equity, pre feasibility study shows that the project resources are about 102 million tons of raw ore, and the grades of copper, gold and silver are 0.41%, 0.26g/t and 2.3g/t respectively). We expect dikulushi project (with an annual output of 10000 tons of copper) to take the lead in making performance contribution from 2022; By 2025, when lonshi and Liangchahe projects are put into operation, the company will form a P2O5 production capacity of 50000 tons of copper + more than 800000 tons.
Four core competitiveness to build the company's growth advantages. The company adheres to the driving force of scientific and technological innovation and won the Luban Award for China Construction Engineering in the 20th / 21st year (the only award-winning project for underground mine construction of national nonferrous metals system). In the field of mine development services, the company has the advantages of specialized technology and integrated operation in terms of design, construction, filling, equipment production, maintenance and intelligent mining and unloading, as well as the advantages of comprehensive development services for deep well projects such as ultra kilometer deep resources, High recognition brand advantages of mining and beneficiation service industry.
The growth of the company will benefit from: considering the strong rigid supply constraints of the global mining and beneficiation industry, the metal price may remain high under the growth of new energy demand. Mining capital expenditure may enter a strong business cycle (strong growth in the industry), the continuous and stable expansion of the company's main mining service projects and the continuous rise of the market share in overseas markets (improving the company's growth), and the gradual release of the company's own mining projects (improving the company's performance and valuation elasticity).
Profit forecast and investment rating: we expect the company to achieve operating revenue of 6.13 billion yuan, 8.14 billion yuan and 9.69 billion yuan respectively from 2022 to 2024; The net profit attributable to the parent company was 806 million yuan, 1.122 billion yuan and 1.615 billion yuan respectively; EPS is 1.36 yuan, 1.89 yuan and 2.72 yuan respectively, and the corresponding PE is 16.5, 11.85 and 8.24 respectively. Considering the stable growth of the company's main business and the flexible release of mining business, we give the company a 30 times PE valuation in 2022, with a target price of RMB 4.04 (market value of about RMB 24 billion), and maintain the "recommended" rating.
Risk warning: liquidity contraction risk; The global mine capital expenditure plan is less than expected; Political risks in the project country; The output of the mining project is lower than the expected output of the company.
