Zijin Mining (601899) Annual Report Commentary Report: Volume of Mining Copper Helps Steady Growth in Results Overseas Projects Promote Continuous Development
The company released its 2018 annual report and achieved 1,059 operating income.90,000 yuan, an increase of 12 in ten years.11%; gross profit 133.400 million, net profit attributable to mother 40.930,000 yuan, an increase of 16 in ten years.71%; EPS is 0.18 yuan / share, an annual increase of 12.5%; mother deduction is not 30.6 ppm, an increase of 13 in ten years.51%.Among them, Q4 achieved net profit attributable to mother 7.41 trillion, slightly lower than expected. The continuous heavy volume of the copper sector has brought about steady growth in performance. The heavy volume of the copper sector has risen in tandem with gains: in 2018, spot copper rose first and then suppressed the average price.9% to 5.1 million / ton, the company’s copper ore gross profit was 4.4 billion, accounting for 33%.Mineral copper sales 24.9 initially, 5 exceptions per year.The company’s Kluweqi Copper Cobalt Wet Process Plant (4 tons / year) and the second phase of Duobaoshan (6 tons / year) have been put into operation smoothly. The continuous heavy volume of mineral copper is still the primary factor for the company’s performance growth.The output of the gold sector increased, and the cost rose: In 2018, the gold sector achieved an average gross profit of US $ 1,269 / tonne, an increase of 0.8%, the average price of RMB 271 yuan / gram, exceeding the reduction of 1.5%.The company’s mining gold sector achieved gross profit 28.6 ppm, the gross profit margin dropped slightly to 31 due to the increase in grade and cost.7%.At the same time, due to the impact of the Pograginkin earthquake in early 2018, the output shifted by 1 ton.The cost control of the lead-zinc sector appeared, and the gross profit margin remained high: in 2018, zinc in Lun held steady, and Shanghai zinc contracted and declined.At 7%, the lead-zinc segment achieved a gross profit of 26.2 ppm, the management effect of ore and zinc mining grade control is considerable, and the gross profit margin is still maintained above 65%. Q4 is affected by financial expenses / asset impairment, and subsequent capital expenditures can be controlled.In the fourth quarter of 2018, single-quarter profit decreased by 10% from the previous quarter, mainly due to financial expenses4.5 ppm and asset impairment8.Impact of 10,000 yuan.But annualized, financial expenses (12.5%) and asset impairment (15%) average annual decline of more than 30%, mainly due to reduced exchange losses.Previous company issue 3.5 billion US dollars of debt, the probability of the next two years will be able to sustain about 100 million operating net cash flow (10.2 billion in 2018), RTB and Camoa’s subsequent investment can basically be met, improve financial costs after the public offering, assets and liabilitiesThe rate may decrease further.Expansion of existing mines such as Korovic / Duobaoshan is continuously diluting costs, and financial costs are expected to be in a controllable range. RTB / Nevsun / Kamoa is progressing smoothly, and the overseas layout continues to exert force.In 2018, the company completed the acquisition of RTB and Nevsun and the pre-feasibility study report of Camoa, of which RTB currently produces copper mines4.3Precipitation (annual production of copper in the first phase of expansion).2)), Nevsun is producing Bisha mine12.5 zinc zinc, copper 1.7. The pre-feasibility study annual copper output of Kamoa in construction reached 29.In January, the overall growth of self-produced copper and zinc from 2019 to 2022, the climbing output is still expected to bring the company continued profit growth. Profit forecast and rating company After the completion of overseas mining acquisitions, copper, zinc, and gold production is expected to continue to increase. Considering that the completion of the RTB acquisition and the release of profits requires the integration process and zinc prices may be under pressure, we slightly reduce the company’s net profit attributable to the parent in 2019-2021 to 50.500 million, 55.900 million (previous value: 53.200 million, 63.700 million), 65.6 trillion, EPS is 0.22 yuan / share, 0.24 yuan / share (previous level 0.23 yuan / share, 0.28), 0.28 yuan / share, corresponding to the current closing price 苏州夜网论坛 of PE is 16, 15, 13 times. Maintain BUY rating. Risk reminder: Kamoa’s exploration reserves are at risk, development progress is less than expected risk, development costs are significantly higher than expected risks, and copper prices may fall risk