Event: in the first half of 2017, the company realized operating income of 637 million yuan and net profit of 241 million yuan, up 30.67% and 293.92% respectively over the same period last year. During the reporting period, the company produced 5800 tons of lead concentrate, 33700 tons of zinc concentrate, 884.88 tons of copper concentrate and 138000 tons of sulfur concentrate.
Core ideas:
Metal prices have risen, and the company's performance has increased significantly. Lead, zinc and copper prices fly together, the profitability of the industry to a higher level, the company as a typical resource-based enterprises, performance improvement is particularly prominent. The main reason for the increase in the company's profit in the first half of the year was that the sales unit prices of the company's main products lead concentrate, zinc concentrate and copper concentrate in the reporting period were higher than those in the same period last year. Since the beginning of the year, the average prices of lead, zinc and copper are 17664 yuan / ton, 22554 yuan / ton and 46555 yuan / ton respectively, an increase of 33%, 50% and 22% over the same period last year. Lead, zinc and copper prices are expected to continue to rise, and the company's performance will continue to benefit and improve significantly.
The reserve of resources is constantly expanding, and the production capacity and output keep growing. The company's resource reserves are constantly expanding. From 2012 to 2016, the company's Dongshengmiao polymetallic Mine carried out reserves verification work below 700m in the mining area, and it is expected that a total of 79.58 million tons of new ore will be added, including 34.22 million tons of pyrite ore and 903000 tons of zinc metal. lead metal 15000 tons, copper metal 15000 tons. It is guaranteed to maintain the growth of production capacity and output. During the reporting period, East Coal Mine perfected the original mining system and the optimization and upgrading project of the new mining system.
As the shortage persists, the price of lead and zinc may rise. The increase of environmental protection, the resumption of production of small and medium-sized mines and the launch of new mines are not as expected, the supply of recycled lead is shrinking, and the tight supply of lead and zinc will continue. At present, zinc stocks continue to decline, and the global inventory consumption ratio is at a five-year low. Copper fundamentals continue to improve, benefit from the global economic recovery, prices may continue to rise.
Give a buy rating. Volume and price rise, the company as a typical resource enterprise, performance improvement is expected.
It is estimated that in 17-19, the EPS is 0.59,0.67 and 0.76 yuan respectively, and the corresponding PE is 19 times, 16 times and 14 times respectively.
Risk tip: metal prices fluctuate sharply.