The company is a domestic silver leader, laying out the entire industry chain and creating a silver empire. The company was founded in 2004. Its main business is silver smelting and deep processing. It has basically formed a silver-rich lead concentrate - lead anodic clay - silver (and comprehensive recycling of other valuable metals) - deep processing of silver products - “Internet +”. Silver production is expected to reach 2000 tons in 2019, ranking first in the country, accounting for about 8% of the country and about 6% of the world;
Upstream continues to acquire mines to reinforce self-sufficiency in raw materials. The company acquired Tibet Jinhe Mining and Tibet Junlong Mining in 2016 and 2017 respectively, increasing the company's self-sufficiency rate of raw materials such as silver and lead. In May 2018, the company announced that it plans to acquire 65% of Chifeng Yubang Mining's shares. Yubang Mining's Shuangjianzishan silver lead-zinc ore has silver reserves of more than 18,000 tons. It is currently the largest silver mine in Asia. If the acquisition is successful, the company's profitability will increase exponentially;
Midstream projects are gradually reaching production, and production capacity continues to be increased. The “2000 ton high-purity silver clean extraction project”, the “50,000 ton lead ice and copper slag resource comprehensive utilization project” and the “30,000 tons/year secondary antimony resource comprehensive utilization project” will be put into production in 2019, continuing to increase the production capacity of the company for silver, electric lead and other valuable metals, which is the main increase in performance. At the same time, downstream Jingui Silver City focuses on silver product processing and industrial tourism projects, effectively improving the company's industrial chain and forming a closed industrial loop;
State-owned assets are expected to enter the market, helping the company develop rapidly. According to company announcements and official website information, the company and Great Wall Asset will launch comprehensive strategic cooperation to provide the company with a package of comprehensive financial services of more than 1.5 billion yuan to bail out Jinggui Banking, of which 300 million yuan has already been implemented. In December 2018, the company is expected to cooperate with Caixin Financial Holding (the only provincial state-owned financial holding platform in Hunan Province). It is foreseeable that if state-owned assets enter the market and effectively address equity pledge risks, not only can the company's operations not be affected, but it can also improve the company's competitiveness, which is expected to take the company to the next level on the mineral acquisition side;
Silver is expected to enter a big bull market, covered for the first time, and given a “buy” rating. In 2019, we expect a marginal slowdown in the US economy, and the US dollar as a whole entering the end of the interest rate hike cycle. The weakening of the US dollar is a probable event. In addition, the gold to silver ratio has been high in the past 20 years and is expected to gradually decline, and silver prices are expected to enter a big bull market. We covered it for the first time and gave it a “buy” rating based on considerations such as the increase in the company's business and the relief of the country's financial resources.
Risk warning: The company's cooperation with state-owned assets fell short of expectations; the number of interest rate hikes in the US dollar exceeded market expectations