Event: the company's 2017 net profit is expected to increase by 470% Mel 520%
The company disclosed on the evening of January 30 that the company expects to achieve a net profit of 294 million yuan to 319 million yuan in 2017, a substantial increase of 470% to 520% over 51.4929 million yuan in the same period last year, deducting non-return net profit of 182 million yuan to 200 million yuan. The main reason for the increase in performance is the rise in the price of copper in the cathode of Pengxin Mining and its main products.
Against the backdrop of rising copper prices, the surge in performance is expected to continue.
The average price of LME copper in 2017 was 6194 US dollars per ton, up 27.26 percent from 4867 US dollars per ton in 2016. The company's copper production increased, which led to a substantial increase in the company's 2017 performance. We believe that the copper industry will enter a 2-3-year economic cycle, the industry supply and demand will change from surplus to shortage and the gap will gradually expand, and the copper price center will gradually move upwards. At present, the LME copper price has reached 7107 US dollars / ton, which is 14.74% higher than the average annual price in 2017. against the background of rising copper prices, the company's performance is expected to continue.
Based on China, develop overseas, copper and gold business is developing at the same time.
In terms of resources, the company has a 72.5% stake in Xitulu Mining Copper Mine, 74% stake in Oney Gold Mine, and 16.19% stake in Syerston Nickel Cobalt Scandium project, as well as an underwriting agreement with Gerald. In terms of processing capacity, Xitulu Mining currently has a production capacity of 40,000 tons of cathode copper; the company is building a project of 20,000 tons of cathode copper and 7000 tons of cobalt. When all is completed, 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 under construction of 11.2 tons of 95% composite gold project, which is expected to contribute more than 1.3 billion yuan to gross profit.
Actively distribute cobalt and nickel to enjoy the dividend of new energy industry
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, Clean TeQ acquired the highest quality Syerston nickel-cobalt mine outside Africa and used its key technology to produce battery-grade cobalt sulfate and nickel sulfate at low cost from laterite nickel ore, and downstream signed a five-year underwriting agreement with Dangsheng Technology, locking in about 20 per cent of cobalt sulfate and nickel sulfate production. Syerston Nickel-Cobalt Mine will build a project with 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.
Profit forecast and investment advice: according to the company's performance forecast, we adjust the performance in 2018 to 313 million yuan, and estimate that the net profit from 2018 to 2019 is 557 million / 731 million yuan, the EPS is 0.29amp 0.39 yuan per share, and the corresponding current price PE is 29max 22x, respectively. If the fixed increase is successfully completed, it is expected that the exam preparation EPS is 0.270.35 yuan per share. Considering that the company's new production capacity will significantly increase the company's performance, while Xitulu Copper Mine's original capacity will remain stable in the next five years, the company's performance is expected to maintain the company's "buy" rating in the context of high copper prices.
Risk hint: the price of copper, cobalt and other metals has fallen, and there is uncertainty in the acquisition of overseas assets.