Sales increased, silver prices rose, and performance increased month-on-month in the third quarter.
According to the company announcement, the company's revenue in the first three quarters was 656 million yuan, down 24% from the same period last year, while the net profit returned to its mother was 74.851 million yuan, down 60.2% from the same period last year. The company made a net profit of 35.795 million yuan in the third quarter, an increase of 76% compared with the previous quarter, mainly due to the sales volume of 7504.9 tons of metal in the company's zinc concentrate, an increase of 65% over the previous month, and 5792.0 tons of lead and antimony (silver) concentrate, an increase of 17% over the same period last year. At the same time, lead prices rose 1.9% month-on-month in the third quarter, while silver prices rose 15.9%, another important factor in the increase in performance compared with the previous quarter.
The mining environmental assessment of Keyue lead polymetallic mine has been approved, and the company's mining capacity is expected to be greatly improved.
According to the company's announcement of September 27, the environmental report of the mining project of Keyue lead polymetallic Mine in Tibet was approved. Getting the EIA approval is a step further for obtaining the mining right certificate. After the mining license is approved, the listed companies will increase the mining scale to 400000 tons of lead, zinc and antimony ore per year, an increase of 62 percent over the current mining capacity of 650,000 tons per year.
Investment suggestion
According to the price of lead, zinc, silver and antimony, the EPS of the company from 2019 to 2021 is expected to be 0.23 picks up 0.80 yuan respectively, and the PE of the corresponding share price is times that of 39-15-12, considering that the original business profit of the company is in the stage of bottoming out and rising; after the company is put into production, the company's revenue is expected to increase by 78%, and the company's profit is expected to increase by 178%. The precious metal sector accounts for nearly 50 per cent of total revenue in 2020 (excluding price increases), which may lead to both performance and valuation gains. The average PB of the same type of company in the reference industry is 3.5times, the company is in the process of transformation, the PB is 3 times, and the reasonable value is 11.97yuan / share. In view of Huayu Mining's 2020 performance valuation by leaps and bounds, 15 times PE is far lower than the company's average 26 times, maintaining a "buy" rating.
Risk hint
The production of Ta aluminum gold project is not as expected; the price of precious metals fluctuates sharply.