The company ploughed deep into precious metal smelting, and its revenue rose sharply in 2022. The company is one of the leading domestic gold smelting enterprises, the main business includes gold mineral resources development, precious metal smelting, high-tech material research and production, international trade and so on.
The company's gold production and sales increased in 2022, with operating income of 50.047 billion yuan, an increase of 20.94% over the same period last year, and net profit of 499 million yuan, up 9.74% over the same period last year.
The Fed's interest rate hike has gradually slowed down, and the opportunity for gold allocation has increased. The Fed raised interest rates in this round to ease the high inflation in the United States during the epidemic, which is showing a continuous downward trend. With the subsequent further decline in inflation, the Fed may gradually withdraw from the process of raising interest rates. As the price of gold is negatively related to real interest rates, the Fed's interest rate hike gradually slows down, providing opportunities for gold allocation.
The upward trend in global gold reserves may lead to an upward trend in gold prices. Gold has a natural monetary attribute, the supply has remained stable in the past decade, and the demand has increased significantly since 2020. At present, the global gold reserves have begun to rise, reaching 35459.50 tons by 2022, mainly by Russia and China. Domestic gold reserves will continue to grow in 2023, which may lead to a gradual rise in gold prices.
Vigorously develop smelting business and lay out new materials. Smelting business is one of the core businesses of the company's profits, and the gold smelting industry has obvious economies of scale. The company currently has an annual production capacity of 50 tons of gold, 1000 tons of silver, 250000 tons of electrolytic copper and 1.3 million tons of sulfuric acid. (1) the company raises funds to invest in the technical transformation project of comprehensive recovery of valuable elements from gold-bearing polymetallic ores by issuing convertible bonds. after the completion of the project, it will have the capacity to handle 450000 tons of gold-bearing polymetallic ores per year, in addition, the company's latest planned smelting capacity is 1.35 million tons. (2) the construction scale of the mining and separation project of Liaoshang Gold Mine can reach 900,000 tons per year. Wanguo International Mining overseas mine Jinling Mine has been officially put into production, and the company's market competitiveness has increased. (3) the second phase of the company's full-layout high-purity material R & D and industrialization project was completed in November 2022.
Profit forecast. Optimistic about the future performance of gold prices and the company's future production growth expectations. It is estimated that the return net profit of the company from 2023 to 2025 is 6.2,7.1 and 1.09 billion yuan respectively, corresponding to the closing price PE of October 10, 2023 is 22.6,19.8,12.9 times respectively. Based on the industry boom judgment and the company's production growth assumptions, we believe that the company is expected to fully benefit. Cover for the first time, giving a "buy" rating.
Risk tips: prospecting and mining risk, product price fluctuation risk, raw material supply risk.