Core ideas:
Benefit from the rise in molybdenum prices, 23H1 return net profit increased by about 124%. According to the semi-annual report of Gold and Molybdenum shares in 2023, the company's 23H1 revenue and return net profit were 55.1 yuan and 1.49 billion yuan respectively, an increase of 13% and 124% respectively over the same period last year. The annual revenue and net profit of 23Q2 were 28.7 yuan and 660 million yuan respectively, up 8% and 69% respectively over the same period last year. During the 23H1 period, molybdenum prices first fell and then rose, the overall high shock. By strengthening production and operation, seizing market opportunities, adjusting product structure, strictly reducing cost and increasing efficiency, the company's business performance reached the best level in the same period in history.
Molybdenum: stable supply and strong demand, grasp the upstream rhythm. Our report on March 19, 23, "Molybdenum:
Supply and demand is strong, grasp the upward rhythm, "it is expected that the sustained shortage of supply in the medium term will support the stable and strong price, and pay attention to the rhythm of steel recruitment and release." Supply and demand: in the past 10 years, the fluctuation of molybdenum supply growth rate has gradually narrowed, and the supply is weaker than the demand in 21-22 years. Direction: there is a correlation between supply and demand gap and molybdenum price, considering that the supply increment mainly comes from a small number of associated molybdenum mines at home and abroad (excluding the potential supply impact caused by the decline of overseas associated ore grade, regional political instability and meteorological upheaval); on the demand side, there is a small increase in global demand (China is stronger than overseas), and it is expected that the global demand will be stronger than the supply growth rate in 23-24, and the gradual expansion of the gap between supply and demand is expected to promote the stability of molybdenum price. Rhythm: molybdenum price is associated with downstream steel move, with macro recovery, 23H2 steel move is expected to gradually stabilize, focusing on the later replenishment volume.
Profit forecast and investment advice: give the company a "buy" rating. It is estimated that the EPS of the company in 23-25 will be 0.91 USD 0.99 won 1.06 yuan per share, the PE corresponding to the closing price on August 21, 23 is as much as 12-11-10, and the average PE valuation of the company since the beginning of 22 is 17 times. The company is the leader of the molybdenum industry, considering that the company benefits from the performance growth space brought by the rising molybdenum price, and with reference to the comparable company valuation, we think that it is more reasonable to give the company a 23-year 17-fold PE valuation, corresponding to a reasonable value of 15.42 yuan per share, giving the company a "buy" rating.
Risk hint. Stringent environmental standards lead to mine production interruption or cost rise; trade protection may lead to a decline in global economic growth affecting molybdenum demand; overseas copper-molybdenum associated mines or adopt the mining method of rich molybdenum and poor copper to rapidly increase molybdenum supply, resulting in a drop in prices.