Hengzhen Mining is a mining and washing company based in Hebei Province. According to the AME report, Hebei Province had the highest production and consumption of mineral ores in China in 2012. At that time, the company has and operates four markets, namely, orphaned, prosperous, private and branch-owned, all of which are located in Yuanyuan, Hebei Province. The company's mining industry has close and convenient roads and transportation networks, so it is easy to reach Hebei and Shanxi provinces, that is, areas with high demand for diamond products. According to the reports of qualified persons, as of the first half of 2013, the company had a total of about 414 million tons of controlled resources and 327 million tons of viable resources, compared with about 224 million tons of recommended resources. Before the start of trial production or commercial production of the company's mines in early 2013, the company invests in the slope dressing and quarry of the company's mines, recovers the mineral ores and ore-bearing rocks in the process, and washes them to the sphene products for sale. The branch mining started commercial production in April 2013, while the orphan, prosperous and plug-in mines all started production in May 2013 and started commercial production in October 2013.
We recommend that investors invest in speculative stocks.
The company is in charge of
(1) the cost of the company is low due to favorable mining and geographical environment, well-designed planning and well-equipped washing facilities; (2) the company is located in a strategic position in Hebei Province. Hebei Province is the province with the highest production capacity and mineral ore consumption in China, and there are convenient roads and transportation networks to deliver the products to China's existing customers and customers. (3) experienced and stable management practice; and (4) the company's diamond products have the characteristics of commercial attractiveness, such as low-grade and high-grade fine powder.
Overview of the industry
According to the AME report, China is the world's largest consumer goods producer, accounting for about 45.0% of the world's GDP since 2009. China's crude output increased from 348 million tons in 2005 to 717 million tons in 2012, with a compound annual growth rate of 10.9 percent. Due to China's large-scale model production, China has become the world's largest demand for mineral ores, accounting for about 57.3% of the global demand for mineral ores in 2012. China's demand for minerals and minerals increased from 530 million tons in 2005 to 1.071 billion tons in 2012, with a compound annual growth rate of 10.6 percent.
The Chinese government has implemented measures to reduce China's production capacity. According to China's Ministry of Industry and Information Technology, 698 tons of crude output will be phased out in 2013, which has been ordered to be shut down because of its low pollution monitoring and control, low energy efficiency and technology. At present, the utilization rate of industrial energy in China and Hebei Province is estimated to be 70% to 75%. Of course, the surplus of China's production capacity has been widely reported and the government has imposed compulsory production capacity, but the output of China or Hebei Province was not very low in 2013. According to the State Statistics Bureau, from January to July 2013, China's crude output increased by about 8.7% to about 456 million tons in the same period in 2012, while the crude output of Hebei Province increased by about 10.0% to about 1.2 million tons in the same period.
According to the State Statistics Bureau, China's crude mineral production increased from 397 million tons in 2005 to 1.329 billion tons in 2012, with a compound annual growth rate of 18.8 percent. Most of China's crude stone production is located in Hebei, Sichuan, Shaanxi and Shanxi provinces, all of which are adjacent to China's main production centers, namely Hebei and Shanxi provinces. According to China's maritime data, with the exception of one-off and decline in 2010, China's import of mineral ores has increased steadily over the past decade, from about 275 million tons in 2005 to about 746 million tons in 2012, that is, a complex annual growth rate of 15.3%.
According to the State Statistics Bureau, Hebei Province is China's largest producer province, accounting for about 25.2% of China's total GDP in 2012. The output of crude grain in Hebei Province increased from about 7420 million tons in 2005 to about 181 million tons in 2012, that is, the annual growth rate of crude grain in Hebei Province is about 13.5%. At the same time, in 2012, Hebei Province had the largest demand for mineral ores in China, accounting for about 24.8% of China's total mineral demand.
Profit ability and duty number
The company's income increased by 204.2% from 219 million yuan up to the first half of 2012 to 667 million yuan up to the first half of 2013, mainly due to an increase in the volume of all three mineral product categories. After the completion of the integration project, orphan, prosperous and plug-in mines began production in May 2013, while branch companies started commercial production in April 2013. To make efforts to increase the output of mineral products. Gross profit increased by 701.9% from 48.3 million yuan as of the first half of 2012 to 387 million yuan as of the first half of 2013. The company's gross profit margin increased from 22.0% as of the first half of 2012 to 58.1% as of the first half of 2013, mainly due to the low cost of unit gold production, which was partly offset by the decline in the average sales of mineral products under unfavorable market conditions. The profit of the company's shares should be 232 million yuan, while the share of shares should be 4.8 million yuan as of the first half of 2012.
Collection purpose
HK $1.129 billion (calculated at HK $3.25 per share) from this collection will be used for the following purposes: about 70% will be used to pay off the company's plan; about 20% will be used to reimburse the Rongcheng branch of China Construction Bank Co., Ltd., a total of 200 million yuan, and about 10% will be used for financial assistance and general corporate purposes.
Valuation
The company's 2012 earnings were 48.5 million yuan, and the company's price-to-earnings ratio ranged from 75.6 to 82.9 times. If you take the first half of 2013 earnings as the basis, excluding the forecast, the price-to-earnings ratio is about 10 times, while the price-to-earnings ratio ranges from 4.5 times to 4.6 times. The price-to-earnings ratio and price-to-earnings ratio of the same industry are 9.6 times and 1.3 times respectively. By contrast, the company's rating is too high to be attractive. The advantage of the company is that its mines start to have commercial production, and the future growth will continue. Coupled with the fact that the company is located in Hebei Province, the demand for mineral ores in this province is the largest in China, so the company has a position of responsibility. In addition, the recent investment atmosphere has been good, but the focus of the market is not on this industry, so we recommend investors to invest in speculative stocks.
Negative factor
(1) the operation and operation of the company depends on the market value of the diamond products, and the market is subject to factors beyond the company's control; (2) the company may have the ability to effectively manage the company's future growth and recharge; (3) the company's operating costs may be higher than expected; (4) the company's plan to obtain extra mineral resources may not be successfully implemented; (5) the company may not be successful in terms of a small number of major customers.