23Q1-Q3 homing net profit + 61.36% compared with the same period last year, maintaining "buy" rating
In the first three quarters, the company achieved revenue of 3.984 billion yuan (yoy+6.11%) and net profit of 667 million yuan (yoy+61.36%), in line with the company's performance forecast of 600-700 million yuan; 23Q3 realized net profit of 286 million yuan (qoq+47.94%). Considering that the iron ore price is still resilient, the company's shipments began to resume, and we raised the iron ore price and sales assumptions. It is estimated that the company's EPS in 23-25 will be 1.46pm 1.83exp 2.35 yuan (the previous value 1.34max 1.75max 2.05 yuan). Comparable company PE (2023E) average 14.2X, give the company 23 years 14.2 times PE valuation, corresponding to the target price of 20.79 yuan (the previous value of 15.87 yuan), maintain the "buy" rating.
23Q3 iron ore volume and price rise, during the period cost rate is relatively stable month-on-month, according to the company's semi-annual report, 23Q3 gross profit margin 62.7% (yoy+27.8pct,qoq+4.5pct), or mainly because iron ore prices have increased compared with the previous month, according to the Dalian Commodity Exchange, 23Q3 iron ore futures settlement price average 821.08 yuan / ton (yoy+14.6%,qoq+8.0%). At the same time, the company's 23Q3 achieved revenue of 3.281 billion yuan (yoy+69.63%,qoq+32.81%), which was higher than the increase in iron ore prices, or mainly due to floods in South Africa in the first half of the year, which affected iron ore shipments, while the company's shipments improved significantly in the third quarter. In addition, the company's expense rate during the 23Q3 period is 29.1% (yoy-15.4pct,qoq+1.0pct), the month-on-month ratio is relatively stable, and the net sales interest rate is 25.5% (qoq+4.8pct).
The second phase of copper enters trial production, injecting new momentum into performance growth.
According to the company announcement, the first crusher in the second phase of the copper mine construction project has completed equipment commissioning and entered the trial operation stage, which means that the copper ore in the second phase can begin to be produced step by step. After the second phase reaches production, it is expected to produce 70,000 tons of copper per year, while the average grade of the second phase is about 0.8%, which is higher than 0.68% of the first phase, which is expected to continue to improve the company's profitability and inject new momentum into performance growth.
Iron ore demand is still resilient, iron ore prices may remain high
According to the Mysteel,1-September domestic cumulative crude steel output of 802 million tons, + 5.77% year-on-year, steel exports increased significantly, superimposed domestic demand consumption resilience, supporting iron and steel production to remain high. Scrap replenishment is relatively limited, resulting in 247 steel mills daily hot metal output since July to maintain more than 2.4 million tons, iron ore demand toughness. Looking ahead to 23Q4, the current steel demand is still relatively stable, although steel mill profits are under short-term pressure and non-construction steel is burdened, but it has not yet triggered large-scale production cuts in steel mills, and we expect iron ore prices to remain high before hot metal production falls significantly.
Risk hint: downstream demand is not as expected and production expansion progress is not as expected.