According to the company's third quarterly report released on October 25, the company achieved operating income of 3.123 billion yuan from January to September, an increase of 5.84% over the same period last year; the net profit attributed to the parent company was-414 million yuan, corresponding to EPS-0.4015 yuan; the quarterly loss in the third quarter was 81 million yuan, and the quarterly EPS-0.0785 yuan in a single quarter was lower than expected.
The main reasons for the lack of obvious improvement in the company's performance are as follows: 1. The company's long-term loans increased by 1.2 billion yuan over the same period last year, an increase of 113%, resulting in a significant increase in financial costs; 2, the phosphorus chemical business during the reporting period is still understarted, and the price is still low; 3. Due to market fluctuations, the company's hedging lost about 94 million yuan, or 0.092 yuan per share. 4. The company's sales expense rate and management expense rate are 3.38% and 10.21%, respectively, an increase of 2.92% and 6.73% over the same period last year.
The inflection point of single-quarter performance is beginning to appear. On the one hand, as zinc prices gradually move out of the mid-year low, the company's provision for inventory price decline in the first half of the year can be gradually reversed; on the other hand, benefiting from the rise in agricultural prices, the company's phosphorus chemical business trend should be a high probability event, the company's overall business is expected to usher in a comprehensive improvement situation, performance inflection point is expected to appear.
At present, the developed countries are plagued by low inflation, low growth and high unemployment, and the second quantitative easing is on the brink.
In order to fend off a possible devaluation of the currency, a large amount of money went into the stock market and commodity markets. Non-ferrous metals can not only carry liquidity, but also are seen as an ideal choice below inflation. Rising prices have contributed to an improvement in corporate earnings, while abundant liquidity has contributed to higher stock valuations, and the percentage effect of two-wheel drive is expected to drive sizeable gains.
Resource revaluation provides a clear margin of safety. Lanping lead-Zinc Mine is the largest lead-zinc mine in Asia. if its lead and zinc metal reserves are estimated on the basis of conservative 244 and 11.82 million tons respectively, the total value of lead and zinc resources is about 45 billion yuan, then the company's equity resource value is 27 billion yuan. At present, the company's total market value is about 18.8 billion yuan, and the resource value / market value is 1.43 times, which has obvious advantages compared with its peers.
Maintain the "overweight" rating. Under the assumption of zinc price of 17000 yuan, 18500 yuan and 19055 yuan per ton in 2010-12, we adjust the profit forecast of the company to-0.28,0.30,0.70 yuan in 2010-12, respectively. The company's main business operation is sound, the stock price has the margin of safety, and the expectation of the major asset restructuring that failed in the early stage always exists.
Risk hint: future demand can not effectively offset the negative impact of monetary tightening, phosphorus chemical industry continues to be depressed.