The performance of primary lead exceeded expectations, with an actual profit of over 100 million in the past 15 years.
Company announcement: the net profit attributed to shareholders of listed companies is expected to be 10 million yuan to 15 million yuan in 2015. From January to September 2015, the company lost 41.64 million yuan. Based on this, the company made a profit of more than 51 million yuan in the fourth quarter, significantly exceeding market expectations. In 2015, the RMB depreciated by 6%, and the company reported half-yearly foreign currency liabilities of about US $300 million. Based on this calculation, the annual exchange loss exceeded 100 million. If the one-time exchange profit and loss impact is not taken into account, the company's net profit is expected to exceed 100 million in 2015, an increase of more than 300% over the same period last year.
Supply-side reform has contributed to the rise of processing fees, and the 16-year performance has become a foregone conclusion.
In 2015, the comprehensive upgrading of government environmental law enforcement led to a substantial contraction in the supply of illegal recycled lead; during the same period, low lead prices led to the closure of small and medium-sized lead smelting capacity downstream, and large inventories of lead concentrates (especially low-grade) in upstream mining enterprises. this has led to a reversal of the relationship between supply and demand upstream and downstream, and smelting processing fees have risen sharply. The lead processing fee rose from 1700 yuan / ton to 2700 yuan / ton in 2015. With the deepening of supply-side reform, we expect that the lead processing fee will be high for 12-18 months and there is still room for increase. The processing fee rose to 2900 yuan / ton in January 2016. at present, the company's complete lead smelting cost is about 1900 yuan / ton and the smelting capacity is 400000 tons. based on this calculation, the company's lead smelting will make a profit of about 400 million yuan in 2016.
Seize the first machine cloth channel, the prospect of regenerated lead is bright.
In the next three years, a large number of small and medium-sized recycled lead enterprises in China will be eliminated due to environmental protection problems, and the number of enterprises is expected to be reduced from 200 to less than 10, which will benefit the company as an industry leader. Recycling channel is the core competitiveness of renewable resources enterprises, the company has decided to build a "waste lead-acid battery recycling network system", covering six provinces, build a national waste lead-acid battery recycling network, it is estimated that the recovery capacity will reach 720000 tons. In the future, China's recycled lead corresponds to a profitable market scale of 50-6 billion yuan, and the company is expected to gain more than 20% market share by virtue of technology and channel advantages, and the profit prospect is bright.
Give a "buy" rating
Considering the maximum dilution of equity (the increase will be completed in 16 years), we raise the EPS of the company for 15-17 years to 0.04,0.79,1.06 yuan (original value:-0.23,0.41,0.85 yuan). In view of the fact that the company's primary lead profitability has been reversed, 16 years of performance is a foregone conclusion, and the prospect of recycled lead business is bright. We previously gave a fair value of 20.50 yuan, corresponding to a 16-year PE of 26 times, given a "buy" rating.
Risk hint
Lead smelting processing fees fell, and the implementation of recycled lead environmental protection policy was lower than expected.