\u3000\u3000 Zijin Mining Group Company Limited(601899) (601899)
Event: the company disclosed the 2021 performance pre increase report. 1) From the perspective of the whole year, it is estimated that the net profit attributable to the parent company will be about 15.6 billion yuan in 2021, with a year-on-year increase of 139.67%; The non net profit deducted was about 14.5 billion yuan, a year-on-year increase of 129.36%. 2) From the single quarter of Q4, it is estimated that the net profit attributable to the parent company in 21q4 is about 4.3 billion yuan, with a year-on-year increase of 122.0% and a month on month decrease of 7.6%; The non net profit deducted was 4 billion yuan, a year-on-year increase of 142.2% and a month on month decrease of 8.4%.
The simultaneous rise of volume and price boosted the annual performance, and Q4 net profit was affected by kamoa inventory carry forward. Volume: in 2021, the output of gold, copper, zinc (lead), silver and iron concentrates of the company’s minerals was 475000 tons, 584000 tons, 434000 tons, 309 tons and 4248000 tons respectively, with a year-on-year increase of 17.3%, 28.9%, 14.8%, 3.3% and 9.7% respectively; Price: the average prices of core minerals gold, copper and zinc in 2021 were 373.1 yuan / g, 68600 yuan / T and 22400 yuan / T respectively, with a year-on-year increase of – 4%, + 41% and + 21% respectively. The simultaneous rise in volume and price of copper and zinc and the growth of gold production jointly contributed to the sharp rise in performance in 2021. Looking at Q4 alone, the performance decreased month on month, mainly due to the underwriting of kamoa copper mine. There is copper that has not been exported as inventory carry forward, which offsets the net profit attributable to the parent company by about 400 million yuan. The performance of kamoa copper mine is not fully reflected in the statements.
The release of gold production capacity is affected by the epidemic, and the production of the three major copper mines is progressing smoothly and will continue to increase. Due to the epidemic situation and other factors, the production capacity release rhythm of overseas gold mines such as mainland gold mines is lower than expected. Compared with the 53-56 tons mentioned in the production guidelines in 2021, the actual production is 47.5 tons, 5.5-8.5 tons less than expected at the beginning of the year, and the production guidelines in 2022 in the performance forecast are 60 tons, which is also reduced by 7-12 tons accordingly. Against the background of the sharp rise in copper prices, the three world-class copper mines of kamoa kakura, Timok and Julong released their production capacity as scheduled, and the actual output slightly exceeded the output guidelines, and the output guidelines were further increased to 860000 tons in 2022.
Multi point flowering, merger and acquisition of lithium resources to become a new energy track. After the three major copper mines are put into operation successively, they will continue to produce large quantities: kamoa kakula was put into operation ahead of schedule in May 21, with an estimated annual output of 200000 tons of copper, and phase II is expected to be put into operation in Q2 in 22 years; Timok was put into operation in October 21, with an estimated annual output of 91400 tons of copper + 2.5 tons of gold; Julong phase I (estimated annual capacity of 160000 tons) is put into operation, and the copper production is expected to be 120000-130000 tons in 22 years. In October 21, the company acquired the 3Q lithium salt lake project in Argentina. The lithium carbonate resource is 7.655 million tons, the average lithium concentration is 621mg / L, and the volume ranks among the top five in the world. Zijin quickly ranks among the new energy tracks.
Investment suggestion: influenced by many factors such as overseas economic recovery and inflation expectations, copper and gold prices continue to remain high. The company is rich in mineral resources and the “Zijin model” improves the business efficiency. We expect the company’s revenue to be RMB 209.19/227.46/240.76 billion from 2021 to 2023, with a year-on-year growth rate of 22.0% / 8.7% / 5.8% respectively; The corresponding net profit attributable to the parent company was 15.67/20.97/25.83 billion yuan respectively, with a year-on-year growth rate of 140.8% / 33.8% / 23.2% respectively. The corresponding PE of the current stock price was 17x / 12x / 10x respectively, maintaining the “buy” rating.
Risk warning: the production of important mining projects under construction of the company is not as expected; Copper and gold prices fell sharply;
