Event description:
The company released its report for the third quarter of 2017, with operating income of 7.43 billion yuan in the first three quarters, an increase of 37.41% over the same period last year. The net profit of shareholders belonging to listed companies was 186 million yuan, up 40.63% from the same period last year. Earnings per share in the first three quarters were 0.35 yuan per share, up 34.62% from the same period last year.
Event comments:
Fund-raising projects have reached production one after another, and their performance has increased significantly. During the reporting period, the company's revenue from electricity silver and comprehensive recycled products increased due to the recovery of the non-ferrous metals market. In addition, the gradual completion of the company's fund-raising projects has improved the deep processing capacity of the company's silver products and increased the production and sales of silver. The company's net profit increased by 46.46% compared with the same period last year. With the production of fund-raising projects and the gradual emergence of scale effects, the company's future performance will grow step by step.
During the period, the cost control was effective, and the gross profit margin decreased slightly. The company's sales expenses in the third quarter were 6.35 million yuan, an increase of 21.3% over the same period last year; management expenses and financial expenses were 104 million yuan and 190 million yuan respectively, down 38.4% and 2.2% from the same period last year. Among them, the sharp decline in management costs is mainly due to the reduction in technological development fees incurred in the current period. The comprehensive gross profit margin was 7.32%, down 1.84% from the same period last year, mainly due to the annual maintenance of the production line and the reduction of self-production of anode mud.
Adjust the industrial planning, the profit can be increased. The company acquired a 100% stake in Junlong Mining for 380 million. Junlong Mining currently holds two exploration rights in Diji Mining area and Bangda Mining area. Among them, Diji mining area currently has proved reserves of 431,800 tons of lead, 24500 tons of zinc and 376.11 tons of silver. At the same time, the company raised funds in the first half of the year for the implementation of "2000t/a High Pure Silver Clean extraction and expansion Project", "30,000 t Compact a Secondary Antimony Resources Comprehensive Utilization Project" and "National Enterprise Technology Center Construction Project", which will be conducive to the further expansion of silver production capacity, improve the comprehensive recovery capacity and improve the added value of silver products. At present, the company is in the layout of the whole industry chain, the scale effect and synergy effect are gradually highlighted, and the performance is expected to grow significantly in the future.
Profit forecast and investment advice: the company's 2017-2019 return net profit is expected to be 2.57,4.05 and 485 million yuan respectively, and the EPS is 0.45,0.72,0.86 yuan respectively.
Risk hint: silver price is not as good as expected, and the performance of acquired enterprises is not as expected.