Event

On October 30th, the company announced that 1-3Q23 achieved revenue of 52.848 billion yuan, + 12.48% compared with the same period last year; net profit of 716 million yuan,-31.53%; and non-return net profit of 664 million yuan, 33.76% of the same period last year. 3Q23 realized revenue of 15.621 billion yuan, month-on-month ratio of-23.61%; net profit of 176 million yuan, month-on-month ratio of-20.23%; deduction of non-return net profit of 161 million yuan, month-on-month ratio of-17.59%.

Comment

Q3 marginal improvement in profitability. The average price of 3Q23 Yangtze River non-ferrous zinc is 21000 yuan / ton, the month ratio is + 0.42%, the average price of Yangtze River non-ferrous lead is 16100 yuan / ton, the month ratio is + 5.52%, and the average price of Yangtze River non-ferrous copper is 69200 yuan / ton, with a ring ratio of + 2.39%. Q3 company's operating income from-23.61 to 15.603 billion yuan, total revenue from-23.56 to 15.621 billion yuan, the decline in revenue scale or due to the company's initiative to reduce the size of the trading business with low gross profit margin. The operating cost is-24.61% to 14.737 billion yuan, and the gross profit is-0.38% to 884 million yuan. Benefiting from the rise in the prices of major products, Q3's comprehensive gross profit margin increased by 1.3% to 5.62%, and the profitability margin improved.

During the period, expenses, asset impairment and investment income drag on Q3 performance, and the cash flow situation is significantly improved. Q3 company sales expenses + 27.48% to 44 million yuan, management expenses + 2.5% to 167 million yuan, financial expenses + 24.31% to 135 million yuan, asset impairment loss-1 million yuan, an increase of 14 million yuan, investment income-25.89% to 20 million yuan During the period, the increase in expense rate, the increase in asset impairment losses and the decline in investment income led to the Q3 return net profit from-20.23% to 176 million yuan, which was larger than the decrease in gross profit, but the Q3 net interest rate increased by 0.22 percentage points to 1.82%. The operating activities of Q3 company generated a net cash inflow of 82 million yuan, which was 443.88% higher than that of Q2.

The traditional industrial chain is strengthened and the advantageous industrial chain is extended. From January to September, the company's Guangxi Mining produced concentrate lead and zinc metal + 13% compared with the same period last year; in February, Jinlingnan Copper in the table, the copper smelting plate produced 291500 tons of cathode copper in the first three quarters, the total profit increased by 21.6 times over the same period last year, and the unit cost was-14% compared with the same period last year. Comprehensive energy consumption year-on-year-15% Q3 cathode copper output 99400 tons, copper, lead and zinc traditional industry chain continued to strengthen. The "Copper-Nickel Composite Belt", the product of Xinyue Company described by CICC, successfully declared the support plan for new materials. In June, the company acquired Foshan Tongbao, the largest thermal bimetal manufacturer in China, and completed the leapfrog layout of the new material plate. Further extend the advantageous industrial chain.

Profit Forecast & Investment suggestion

It is estimated that the revenue of the company from 23 to 25 years is 768x851 / 91.9 billion yuan respectively, the net profit returned to the mother is 13.94pm 17.49 / 2.157 billion yuan, the EPS is 0.37max 0.47pm 0.58 yuan, and the corresponding PE is 12.76pm 10.178.25 times respectively. Maintain a "buy" rating.

Risk hint

The release of production capacity is less than expected; product prices fluctuate sharply; the risk of RMB exchange rate fluctuations.