Based on China, develop overseas, the coordinated development of polymetallic business
Since listing, we have adopted a number of measures to consolidate copper business, develop gold business, and actively increase the upstream nickel and cobalt business of new energy, so as to achieve the coordinated development of multi-metals. In terms of resources, the company holds a 72.5% stake in Xitulu Mining Copper Mine, 74% stake in Oney Gold Mine, and 16.19% stake in Syerston Ni-Co-SC project, as well as an underwriting agreement with Gerald. In terms of processing capacity, Hituru Mining currently has a production capacity of 40,000 tons of cathode copper; the company is under construction of 20,000 tons of cathode copper and 7000 tons of cobalt projects. Upon completion, the company will have a production capacity of 62700 tons of cathode copper and 8174 tons of cobalt, with a net profit estimated at current prices of US $179 million; at the same time, Oni Gold Mine is building an 11.2t 95% composite gold project, which is expected to contribute more than 1.3 billion yuan to gross profit. In addition, the Syerston nickel-cobalt mine project will have an average annual output of 18700 tons of nickel, 3222 tons of cobalt and 49.2 tons of scandium. After reaching production, it is expected to confirm an annual investment income of 248 million yuan.
The layout of new energy is emerging, and the company is expected to achieve a second take-off.
The company's new energy layout is beginning to take shape. in the Democratic Republic of the Congo, the upstream lock in high-quality and cheap cobalt ore raw materials through strategic partners and underwriting agreements signed with Gerald and Mid-Colorado and the establishment of a cobalt trading center. downstream and Gepai New Energy signed a 5-year underwriting agreement to lock in 30% of cobalt hydroxide production. In Australia, the Clean TeQ stake won the highest quality Syerston cobalt mine outside Africa and used its key technologies to produce battery-grade cobalt sulfate and nickel sulfate at low cost. Downstream signed a five-year underwriting agreement with Dangsheng Technology, locking in about 20 per cent of cobalt and nickel sulfate production. With the gradual progress of the company's project, the distribution of cobalt and nickel resources upstream of the company's new energy will become more and more perfect, and it is expected to take advantage of the new energy wave to achieve a second take-off in the future.
Clean TeQ has the key technology of extracting nickel and cobalt, which is expected to be produced on a large scale in the future.
Clean TeQ has resin ion exchange adsorption technology, which can be directly extracted from nickel laterite to produce battery-grade nickel sulfate and cobalt sulfate without further refining, and has the characteristics of short process flow, low cost and low investment. Nickel sulfate is the source of nickel metal in ternary materials, and the increase of ternary proportion and high nickelization will lead to the rapid growth of demand. Under the background that there is a bottleneck in the expansion of nickel sulphide ore and the traditional production process can not produce nickel sulfate from nickel laterite, the shortage of nickel sulfate is a high probability event. The company's low-cost nickel-cobalt technology is expected to be produced on a large scale in the future.
Profit forecast and investment rating: we estimate that the company's 2017-2019 homing net profit is 353 million / 557 million / 731 million yuan, the corresponding EPS is 0.19 scarp 0.29x0.39 yuan per share, and the corresponding current price PE is 49mm31max 24x, respectively. If the fixed increase is successfully completed, it is estimated that the exam preparation EPS is 0.17ppm 0.27exp 0.35 yuan per share. Considering that the company's new production capacity will greatly increase the company's performance, while the original production capacity of Xitulu Copper Mine will remain stable in the next five years, the company's performance is expected in the context of high copper prices. On September 7, 2017, the company's first phase of employee stock ownership plans to increase its shareholding by 511100 shares at an average price of 9.5449 yuan per share. Employee stock ownership shows corporate confidence. It will be upgraded to the buy rating with reference to the target price of 13.05 yuan given by similar listed companies, corresponding to 45 times PE in 2018.
Risk hint: new capacity volume is lower than expected, copper, gold and cobalt prices fall, Clean TeQ performance is lower than expected, strategic cooperation framework agreement is not legally binding, and specific implementation content and progress are still uncertain.