矿山端：2023 年上半年，公司生产精矿铅锌金属量13.41 万吨，同比下降1.5%，完成年度计划的48.6%；其中国内矿山企业生产铅锌金属量8.28 万吨，比上年同期下降11.14%。冶炼端：2023 年上半年，公司冶炼企业生产铅锌产品21.52 万吨，同比增长27.64%，完成年度计划的50.8%；生产阴极铜19.21 万吨，完成年度计划的48%；生产工业硫酸93.79 万吨，硫磺1.96 万吨，粗铜800 吨，白银60 吨，电镓8.67 吨，锗精矿含锗8.13 吨。Incidents:
On August 29, 2023, the company announced the 2023 semi-annual report. Achieved operating income of 37.21 billion yuan, up 3.9% year on year; net profit of 540 million yuan, down 36.3% year on year; net profit after deducting net profit of 500 million yuan, down 38.8% year on year.
The mining side and smelting side are generally in line with the annual production plan
Mining side: In the first half of 2023, the company produced 134,100 tons of lead and zinc metal concentrate, down 1.5% from the previous year and 48.6% of the annual plan; its mining enterprises in China produced 82,800 tons of lead and zinc metal, down 11.14% from the same period last year. Smelting end: In the first half of 2023, the company's smelting enterprises produced 215,200 tons of lead-zinc products, an increase of 27.64% over the previous year, and 50.8% of the annual plan; produced 192,200 tons of cathode copper, 48% of the annual plan; produced 937,900 tons of sulphur, 800 tons of crude copper, 60 tons of silver, 8.67 tons of gallium, and 8.13 tons of germanium concentrate.
The decline in concentrate revenue and the increase in financial expenses are the main reasons for the decline in profits. By product, the company's revenue from concentrate products was 1.19 billion yuan, a year-on-year decrease of 49.18%, and gross profit margin of concentrate decreased by 19.9% year-on-year. At the same time, the company's financial expenses for the current period increased by 109 million yuan over the same period last year due to the expansion of the loan scale, an increase of 122.1% over the same period last year.
Copper smelter self-developed technology to achieve industry leadership
CICC Copper achieved a profit of 250 million yuan in the first half of the year, with impressive profitability. The “Zhongjin Lingnan Two-Stage Short-Process Copper Smelting Process” independently developed by CICC Copper realizes that the copper smelting process has changed from “three stages” to “two stages”, solving the technical problems of long processes and high heat loss common in existing copper smelting processes.
The construction of the Maimon mine in Dominica is as planned
As of June 30, 2023, the construction progress of the company's convertible bond project, the Dominican Maimon mine project, is 81%. Overall, the project is progressing smoothly. It is expected to be officially put into operation in December 2024.
Profit Forecasts, Valuations, and Ratings
Considering factors such as the increase in the company's financial expenses, fluctuations in metal prices, and the expansion of the revenue scale of copper smelters, we expect 2023-2025 revenue to be 740.7/787.5/85.58 billion yuan (original value: 580.8/600.9/61.8 billion yuan), with a year-on-year growth rate of 33.8%/6.3%/2.3%, respectively, and net profit of 12.3/18/2.68 billion yuan (original value of 1,904/27.67/3451 billion yuan), with a year-on-year growth rate of 1.1%/46.5%/ 49.5%, three-year CAGR is 30.3%, EPS is 0.33/0.48/0.72 yuan/share, and the corresponding PE is 16x/10.9x/7.3x, respectively. Referring to comparable companies, 14 times the 24-year PE, corresponding to the target price of 6.72 yuan, maintained the “buy” rating.
Risk warning: Risks such as falling metal prices, overseas mine commissioning, and mine resource reserves.