In 2022, the company achieved revenue of 50.047 billion yuan, an increase of 20.94% over the previous year; net profit of Guimu was 499 million yuan, an increase of 9.74% over the previous year; after deducting net profit of 625 million yuan, an increase of 4.91% over the previous year. The company's performance reached a new high since listing. 2022Q4, the company achieved revenue of 15.509 billion yuan, up 62.16% year on year and 18.43% month on month; Guimu's net profit was 94 million yuan, down 10.78% year on year and 32.18% month on month.
Increased production led to revenue growth, and smelting contributed the main profit. The revenue of gold/silver/electrolytic copper/sulfuric acid in 2022 was 178.5/36.93/119.83/46 billion yuan, a year-on-year change of +21.39%/-8.96%/-0.23%/-2.47%; the gross profit ratio was 23.33%/15.41%/23.95%/9.36%, respectively. The company's annual gold/silver/electrolytic copper/sulfuric acid production was 46.76 tons/825.53 tons/202,200 tons/1,3523 million tons, a year-on-year change of +18.08/+9.02/+2.77/ -1.63%. The increase in production led to a sharp increase in revenue. In the future, we will move towards production targets of 47.7 tons of gold, 791.83 tons of silver, and 1912 thousand tons of copper.
Both the cost rate and gross margin declined during the period. The corporate expenses rate in 2022 was 1.64%, down 0.82 pct from the previous year. Among them, the sales/management/finance expense ratio was 0.06%/0.94%/0.64%, respectively, with a year-on-year change of 0.01/-0.61/-0.23pct. The increase in the sales expense ratio was mainly due to the increase in employee remuneration in 2022; the financial expense ratio decreased by 0.23 pct year-on-year, mainly due to the increase in exchange earnings in 2022 compared to last year. The gross margin for the whole year declined year-on-year. By product, the gross margin of gold/silver/electrolytic copper/sulfuric acid was 2.46%/7.84%/3.76%/38.19%, respectively, with year-on-year changes of -1.27/+2.38/-0.17/-7.62pct.
Production capacity continues to expand, and projects under construction are progressing steadily. The company currently has an annual smelting capacity of 50 tons of gold, 1,000 tons of silver, 250,000 tons of electrolytic copper, and 1.3 million tons of sulfuric acid, and can comprehensively recycle rare metals such as antimony, bismuth, tellurium, and arsenic. The company continues to expand production capacity based on leading smelting levels to strengthen large-scale operating advantages: 1) The company plans to issue 3.16 billion yuan convertible bonds mainly to invest in comprehensive recycling technology projects for valuable elements in gold-containing polymetallic ores. After completion of the project, it will have the capacity to process 450,000 tons of ore per year, with an estimated annual output of 11.49 tons of gold ingots, 84,700 tons of grade copper, and 3791,000 tons of sulfuric acid; 2) Key procedures for the complex gold concentrate multi-element recycling project have been approved; 3) High-purity materials and R&D and industrialization projects are in phase II of the 2022 project Trial production was completed in November, and a series of new material products such as high-purity arsenic, antimony, and tellurium will be fully industrialized.
Building our own mines, participating in overseas projects, and future asset injections, the mining resources side is worth looking forward to. By the end of 2022, the company and its subsidiaries held a total of 150.38 tons of gold resources. Among them, the key procedures for the Mou Ping Liaoshang gold mine expansion and capacity expansion project have been approved. After completion, 900,000 tons/year of ore sampling and production capacity can be formed; the company's participation in Wanguo Mining is 20.87% of its shares to allocate overseas resources, and its overseas mines have been officially put into operation in 2022, beginning to contribute investment income. Furthermore, Jiangxi Copper, the controlling shareholder of the company, promised to inject its high-quality gold assets into the company and start injecting gold assets into the company after the relevant conditions of the gold mine affiliated with Jiangxi Gold have been met.
Profit forecast and investment suggestions: The company's performance reached a record high, and production expansion projects are progressing steadily. Considering the future injection of high-quality resources, the company's net profit for 2023-2025 is expected to be 6.01/7.27/889 million yuan. Based on the closing price on April 7, the corresponding PE is 24/20/16 times, maintaining the “careful recommendation” rating.
Risk warning: product price fluctuation risk, prospecting and mining risk, raw material supply risk