\u3000\u3000 Zijin Mining Group Company Limited(601899) (601899)
Event: the company released a performance forecast on the evening of January 16. It is estimated that the net profit attributable to shareholders of listed companies will be about 15.6 billion yuan in 2021, with a year-on-year increase of 139.67%, and the non net profit attributable to shareholders of listed companies will be about 14.5 billion yuan, with a year-on-year increase of 129.36%.
Comments:
Inventory carry forward affects 2021q4 performance, and the annual performance benefits from the simultaneous rise of volume and price. In Q4, the net profit attributable to the parent company in a single quarter was 4.3 billion yuan, a year-on-year increase of + 122% and a month-on-month increase of – 7.6%. The unrealized sales of copper inventory of kamoa copper minerals underwritten by the subsidiary affected part of the performance (offsetting the net profit attributable to the parent company in 2021 of about 400 million yuan). The annual performance growth in 2021 stems from 1) volume: 47.5 tons of mineral gold in 2021, a year-on-year increase of + 17%; 584000 tons of mineral copper, a year-on-year increase of + 29%; Mineral zinc (lead) 434000 tons, year-on-year + 15%; 309 tons of mineral silver, a year-on-year increase of 3%, and 4.248 million tons of iron concentrate, a year-on-year increase of + 10%. 2) Price: the average price of Shanghai copper in 2021 is 68000 yuan / ton, a year-on-year increase of + 40%; The average price of zinc in Shanghai was 22000 yuan / ton, a year-on-year increase of + 23%; The average price of Shanghai silver was 5259 yuan / kg, a year-on-year increase of + 11%.
In 2022, the output of mineral copper increased by 47% year-on-year, and the output of mineral gold increased by 26% year-on-year. The company announced that the planned indicators of main products in 2022 are: 60 tons of mineral gold, 860000 tons of mineral copper, 480000 tons of mineral zinc (lead), 310 tons of mineral silver and 3.2 million tons of iron concentrate. Among them, the output of mineral copper increased by 47% and that of mineral gold increased by 26%. The company’s kamoa kakula copper mine phase I in the Democratic Republic of the Congo, the upper ore belt of peji copper gold mine in Serbia and the Julong copper mine phase I in Tibet will be completed and put into operation in 2021. The output of copper gold projects is expected to increase rapidly in the future.
Acquisition of new lithium company and acquisition of 3q Salt Lake project in Argentina: in October 2021, the company announced that it would acquire all the issued and circulating shares of neolithium (new lithium company) in Canada with cash of C $960 million (about RMB 4.939 billion). The core assets of new lithium company are the Argentine 3Q lithium salt lake project held by 100%. According to the estimation results of new lithium company in June 2021, 3Q project has a total lithium carbonate equivalent resource of about 7.565 million tons (lithium ion concentration cut-off grade 400mg / L), of which the proven + control lithium carbonate equivalent resource is 5.304 million tons. The total proved + approximate lithium carbonate equivalent reserves are 1294000 tons, including 328000 tons of confirmed lithium carbonate equivalent reserves and 966000 tons of approximate lithium carbonate equivalent reserves.
Profit forecast, valuation and rating: considering the rise of copper and zinc prices, assuming that the average price of Shanghai gold in 2021 / 2022 / 2023 is 376 / 375 / 380 yuan / g, the average price of Shanghai copper is 6.8/6.5/65000 yuan / ton, and the average price of Shanghai zinc is 2.2/2.1/20000 yuan / ton, the net profit attributable to the parent company in 2021-2023 is expected to be 15.6/223/27.5 billion yuan respectively, with a year-on-year increase of 140% / 43% / 23% (an adjustment of 11% / 17% / 11% compared with the previous forecast), The PE corresponding to the current share price is 17 / 12 / 9 times respectively, maintaining the “overweight” rating.
Risk tip: the price of copper, gold and zinc fell more than expected, and the construction of copper, gold and other major projects of the company was less than expected; Overseas operation risk.
