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赤峰黄金(600988)首次覆盖报告:资源诚可贵、“伯乐”价更高 万事俱备静待价值兑现

Chifeng Gold (600988) First Coverage Report: Resources Are Valuable, “Bole” Prices Are Higher, Everything is Ready to Wait for Value to Be Delivered

西部證券 ·  Mar 11

1. “Resources” are invaluable: new domestic and foreign projects have been added, production expansion+technical reform are making concerted efforts, and the scale of production capacity continues to expand. As of the end of 2022, the company's domestic gold mining enterprises (Jilong Mining - Zanshanzi Gold Mine, Huatai Mining - Honghuagou Gold Mine, Wulong Mining - Wulong Gold Mine, Jintai Mining - Xidengping Gold Mine, Hanfeng Mining - Tianbaoshan Zinc-Lead-Copper-Molybdenum Polymetallic Mine) had 5.25 million tons of gold resources and 43 tons of metal; Vientiane Mining - Saipan Gold and Copper Mine held 9.7 million tons of ore and 51.6 tons of metal; Gold Star Gold and Copper Resources in Ghana The mine has 96.96 million tons of gold resources and 329.7 tons of metal. 1) In the short term: addition+production expansion+technical reform, key projects such as Vientiane Mining, Jinxing Vasa, Geelong Mining, Wulong Mining, Jintai Mining, Xidengping Gold Mine, and Hanfeng Mining ensure continuous growth in production capacity. 2) In the long run: By continuing to increase exploration investment to carry out prospecting and storage, the company established a joint venture with Xiamen Tungsten Industry to jointly develop rare earth resources in Laos, the wholly-owned subsidiary, Chijin Hong Kong, controls the new Abuja gold mine by purchasing shares in Tietuo Mining and applying for rare earth resource mining rights in the Vientiane Saipan mining area, etc., and continues to create new performance growth points.

2. “Bole” is more expensive: strategic transformation+leading person+incentive mechanism, the core is to achieve the goal of reducing costs and increasing efficiency. If resource acquisition and development are mainly used to solve the goal of increasing production, then the goal of declining costs needs to be achieved through management, team, and technology. 1) Development history: 2019 was a watershed year. Whether it was the establishment of a development strategy or the inauguration of Chairman Wang Jianhua, a core member, it was a milestone year for the company. 2019-2022 is the stage where the company pursues production and scale. Whether it is an epitaxial merger and acquisition, or the production assessment target of employee shareholding can be seen. From the pursuit of production to a balance of scale and profit in 2022 to 2023, the employee shareholding assessment target changed to the growth rate of net profit to mother. 2) Development strategy: In 2019, a “focus on money” was established, and a “long-term principle” was further proposed in 2021; 3) Incentive mechanism: Since 2021, the company has issued 3 repurchases plus 2 employee shareholding, and corporate governance targets leading international companies; 4) Cost reduction and efficiency: From the pursuit of scale to the pursuit of profit, the company's development has entered a new stage.

Profit forecast: We forecast that in 2023-2025, the company's net profit due to mother will be 7.9, 10.9 billion yuan, and 1.41 billion yuan, EPS 0.48, 0.65, 0.85 yuan, PE will be 30, 22, and 17 times, giving the company 30 times PE in 2024, and the corresponding target price is 19.50 yuan/share, covered for the first time, giving it a “buy” rating.

Risk warning: macroeconomics cause gold price fluctuations, projects falling short of expectations, cost disturbances, exchange rate risks, etc.

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