share_log

赤峰黄金(600988):产量持续提升 成本稳步下降

Chifeng Gold (600988): Continued increase in production and steady decline in costs

國信證券 ·  Mar 31

Reduce costs and increase efficiency, and further improve performance. In 2023, benefiting from the rise in gold prices, the company achieved total operating income of 7.221 billion yuan, an increase of 15.23% over the previous year; net profit attributable to shareholders of listed companies was 804 million yuan, an increase of 78.21% over the previous year. In a single quarter of the fourth quarter, volume increases and prices increased, and costs decreased. The company achieved operating income of 2,159 billion yuan, an increase of 27.69% over the previous month; net profit attributable to shareholders of listed companies was 284 million yuan, an increase of 36.63% over the previous month.

Existing resources were tapped, and production increased slightly. In 2023, the company completed 14.35 tons of mineral gold, an increase of 5.79% over the previous year. Among them, domestic gold mines produced 3.32 tons of gold, up 43.1% year on year; overseas gold mines produced 11.03 tons of gold, a decrease of 2.0% year on year. Wulong Mining's underground development project continues to advance, and mining capacity is improving. Jintai Mining's 140,000 tons/year mining and construction project for Xidengping Gold Mine was put into production and use in October 2023, and all production processes were completed. Important projects under construction in Vientiane Mining are being implemented according to plan, and a series of research projects will also lay the foundation for increasing mineral processing recovery rates. Venus Wasa introduced engineering contractors to improve the efficiency of the tunneling project and develop 242 ramps and B-SHOT southern ramps. In 2024, gold production and sales volume will be 16.02 tons within the consolidated budget of the company.

The strategic focus is shifting, and the effect of reducing costs and controlling expenses is obvious. In 2023, the company focused on cost reduction and fee control. Through centralized procurement, process technology improvement, introduction of third party contractors, and personnel optimization, etc., the total maintenance cost was 267.17 yuan/gram, a year-on-year decrease of 12.0%; the sales cost was 280.2 yuan/gram, an increase of 1.1% year-on-year under the adverse effects of exchange rate fluctuations and massive floods. Looking at the subregion, the sales cost of domestic mines was 152.69 yuan/gram, a year-on-year decrease of 17.2%, and the cost advantage is outstanding.

Vientiane Mining's sales cost was 1489.89 US dollars/ounce, down 2.5% year on year; Venus Vasa sold cost 1315.47 US dollars/ounce, up 16.5% year on year. On a quarterly basis, sales costs have stabilized, falling to 264.4 yuan/gram in a single quarter in the fourth quarter.

Management costs have declined, and financial expenses have increased. In 2023, the company deepened organizational transformation and improved operation and management efficiency. It benefited from a year-on-year decrease in the Group's consulting fees and consultancy expenses, and management expenses fell 8.2% to 460 million yuan. The company's financial expenses increased by 40.7% to $190 million due to the increase in interest-bearing liabilities, the increase in interest expenses on US dollar loans, and the company's interest expenses increased by 40.7%.

Risk warning: Project construction progress falls short of expectations; gold prices have declined sharply; production costs have risen sharply; asset impairment has exceeded expectations.

Investment advice: The company is firm in the pace of international development, gold production continues to grow, and there is room for reduction in production costs. We expect the company's 2024/25/26 revenue to be 92.4/101.1/11.04 billion yuan, up 27.9%/9.5%/9.2% year on year; net profit attributable to the parent company is 14.4/17.6/2.05 billion yuan, with annual growth rates of 79.0%/22.2%/16.8% respectively; diluted EPS is 0.86/1.06/1.23 yuan, corresponding PE to the current stock price is 18.9/15.5/13.2x, maintaining a “buy” rating.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment