Providing timely assistance, ICBC signed a bank-enterprise cooperation agreement with the company, and financial support is expected to reach 500 million yuan. According to the company's website, on the afternoon of January 4, the launching ceremony of the "political Bank and Enterprises hand in hand with Industrial and Commercial Bank of China" activity in Chenzhou was held in Xiongsen Hotel. Chenzhou Branch of China Industrial and Commercial Bank of China Co., Ltd. signed a framework agreement on bank-enterprise cooperation with the company on the spot, promising to issue 500 million yuan of medium-term notes to Jin Gui Silver. and provide deposits, financing, international settlement, financial management, investment and other banking and financial services, promote the company's high-quality development, is expected to solve the financing problems in production and circulation
The company is the domestic silver leader, the layout of the whole industrial chain, to create a silver empire. The company was founded in 2004, mainly engaged in silver smelting and deep processing, has basically formed a silver-rich lead concentrate-lead anode slime-silver (and comprehensive recovery of other valuable metals)-silver products deep processing-"Internet +" industrial chain system, silver output is expected to reach 2000 tons in 2019, ranking first in the country, accounting for about 10% of the country, accounting for about 7% of the world.
State-owned assets are expected to enter the market to promote the rapid development of the company. According to the company announcement and information on its website, the company has launched a comprehensive strategic cooperation with Great Wall assets, which will provide the company with a package of comprehensive financial services of more than 1.5 billion yuan, of which 300 million yuan has been landed; in December 2018, the company is expected to cooperate with Caixin Financial Holdings (the only provincial state-owned financial holding platform in Hunan Province). It can be predicted that if state-owned assets enter the market and effectively solve the risk of equity pledge, it can not only make the company's operation unaffected, but also improve the company's competitiveness, which is expected to enable the company to climb another high-rise building at the mineral acquisition end.
The upstream continues to acquire mines to improve the self-sufficiency rate of raw materials. The company acquired Tibet Gold and 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 planned to acquire 65% of Chifeng Yubang Mining Co., Ltd. The Shuangjianzishan Silver-lead-Zinc Mine under Yubang Mining has silver reserves of more than 18000 tons, which is currently the largest silver mine in Asia. If the acquisition is successful, the company's profitability will increase exponentially.
Silver bull market trend is obvious, maintain the buy rating, target price 8.6 yuan. In 2019, we expect the US economy to slow marginally, the Fed to raise interest rates into the final stage, and the weakening of the US dollar is a high event. Coupled with the fact that the gold-silver ratio is at a 20-year high, it will gradually fall back later, and silver prices are expected to enter a big bull market. Taking into account the company's business growth and state-funded bail-outs, we maintain a "buy" rating with a six-month target price of 8.6 yuan.
Risk hint: the company's cooperation with state-owned assets is not as expected; the number of interest rate increases in the US dollar exceeds market expectations.