Key points of investment
This Thursday (March 23), “CITIC Metals”, a company listed on the Main Board, asked for a quote.
CITIC Metals (601061): The company is mainly engaged in the trading business of metals and mineral products; the types of trade mainly include ferrous metal products such as iron ore and steel, non-ferrous metal products such as niobium, copper, aluminum, etc., and other trade products. The company achieved operating revenue of 76.942 billion yuan/119,116 billion yuan/119.175 billion yuan respectively in 2020-2022, YOY was 21.55%/46.63%/5.64% in that order, and the three-year compound annual revenue growth rate was 23.48%; it achieved net profit of 1,138 million yuan/1,823 million yuan/2,215 million yuan, in that order, YOY was 59.84%/60.16%/21.55%, and the three-year compound annual growth rate of Gumo's net profit was 45.99%. According to preliminary forecasts, the company achieved net profit of 370 to 520 million yuan in January-January 2023, a year-on-year change of -28.72% to 0.17%.
Investment highlights: 1. The company is a leader in domestic metals and mineral products trade. Among them, ferrous metal trade volume ranks among the highest in the country all year round, and niobium metal trade is close to domestic monopoly. In the field of ferrous metal trade, the company's annual iron ore trade volume exceeds 50 million tons; and in terms of resource acquisition, it has established long-term stable cooperative relationships with world-renowned mining companies such as Rio Tinto, BHP Billiton, Anglo-American Resources, and Vale. In terms of channel construction, it has formed a large and medium-sized steel enterprise customer base represented by Baowu Group, Hegang Group, and Shangang Steel Group, laying a solid customer base for the company's sustainable development. In the field of non-ferrous metals trade, the company has been the exclusive distributor of CBMM in the Chinese market since 1998 and has a history of cooperation with CBMM for over 30 years; CBMM is the world's largest producer of niobium products, controlling more than 70% of the world's niobium resource reserves, and its niobium production accounts for about 80%-85% of the world's total production. As the exclusive distributor of CBMM in the domestic market, the company accounts for about 80% of the domestic niobium product market. 2. Through equity participation, the company invests in mining enterprises such as CBMM and LasBamBas to expand upstream minerals, which helps the company to master scarce high-quality mineral resources and consolidate its competitiveness in metal trade. The company acquired 15% of CBMM's shares through an investment consortium formed with major domestic steel companies; it also obtained offtake interests in Peru's LasBamBas copper mine project and KK project in Peru by participating in 15% of the shares of LasBamBas and 25.97% of the shares of the Canadian listed company Ivanhoe, which helped the company broaden its resource channels and further consolidate the supply of upstream mineral products.
Comparison of listed companies in the same industry: The company focuses on the trading business area of metals and mineral products; according to business and scale similarity, relevant metal and mineral product traders such as Minmetals Development, Luoyang Molybdenum, Xiamen Xiangyu, and Zijin Mining were selected as comparable listed companies of CITIC Metals. Looking at the comparable companies mentioned above, the average revenue scale of the industry from the fourth quarter of 2021 to the third quarter of 2022 was 257.282 billion yuan, the comparable PE-TTM (arithmetic average) was 16.05X, and the gross sales margin was 7.89%. In comparison, the company's revenue scale and gross margin fell short of the industry average.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons. The company content is mainly based on the content of prospectuses and other public information, there is a risk that the selection of listed companies in the same industry is inaccurate, there may be interpretation biases in the content of the content data, and the risks of specific listed companies are shown in the content of the text.