In 2023, the company achieved revenue of 59.275 billion yuan, a year-on-year increase of 17.83%, net profit to mother of 2,328 billion yuan, an increase of 86.57% year-on-year, and net profit after deducting non-attributable net profit of 2,213 billion yuan, an increase of 69.47% over the previous year.
2023Q4 achieved revenue of 17.952 billion yuan, a year-on-year increase of 71.33%, net profit of 983 million yuan, an increase of 77.71% year-on-year and an increase of 111.11% month-on-month; net profit after deduction of 934 million yuan, an increase of 70.40% year-on-year and 134.38% month-on-month. The performance exceeded our previous expectations.
The expense ratio was stable during the period, and the balance ratio increased slightly. The company's expense ratio for the 2023 period was about 7.1%, which was basically the same as the previous year. The annual sales expenses, management expenses, and financial expenses were 147 million yuan/2,506 billion yuan/1,564 billion yuan respectively, changing -16.58%/+8.23%/+49.32% year over year. Among them, the decrease in sales expenses was mainly due to the increase in the current period's sales commission. The increase in management expenses was mainly due to the increase in the current period's merger and acquisition of Yintai Gold. The company's balance ratio rose 1.48pct to 60.43% in 2023 compared to 2022.
Gold production has risen, and rising gold prices have led to an increase in profits. The gross profit ratio of the company's own gold/ outsourced gold/ small gold bar business in 2023 was 88.80%/2.69%/1.62%, respectively. Driven by the rise in average gold prices throughout the year, the company's overall gross margin increased. Among them, the gross margin of the self-produced gold/ outsourced gold/ small gold bar business was 48.91%/1.05%/1.24%, a year-on-year change of +5.58pct/+0.34pct. In terms of output, the company's mineral gold production increased by 41.78 tons in 2023 (including Thai silver and gold watch production) At 8.04%, the company plans to produce no less than 47 tons of gold in 2024, a significant increase over 2023. In 2023, the company's own production cost was 230.38 yuan/gram, +3.68% over the same period last year. The grade of raw ore selected for the whole year was 1.29 g/ton (excluding Yintai gold data), an increase of 0.06 g/ton over the previous year.
Resource mergers and acquisitions have continued, and the results of prospecting and increasing reserves have been remarkable. In terms of mergers and acquisitions, the company successfully obtained 20.93% control of Yintai Gold through agreement acquisitions, and continued to increase its holdings of Yintai Gold to 28.89% in the secondary market, further consolidating its control over Yintai Gold. At the same time, it also auctioned to obtain mining rights for the Gansu Bridge Project, strengthen resource reserves in the Gansu region, and actively promote the mineral rights injection company in the Yanshan mining area in the Penglai region, which belongs to the Gold Group. It will integrate and develop existing mining rights in Penglai Mining to accelerate the acquisition of prospecting rights for the Xiling Jinling mine. In terms of prospecting, the company invested 570 million yuan in prospecting capital throughout the year, adding 36.6 tons of gold and metal. The prospecting results were remarkable. By the end of 2023, the company had 1431.3 tons of gold resources and 1282.96 tons of equity resources.
The project progresses steadily to create future growth. Currently, the company has four major gold mining and construction projects: the Jiaojia Mining Area (integrated) gold mine development, the Xincheng gold mine integrated development, the Namutini gold mine project, and the 2000t/d expansion project selected by the Chifeng Chaihulan subsidiary. The above projects are expected to greatly increase the company's production capacity after implementation.
Investment advice: The company's net profit for 2024-2026 is expected to be 37.66/51.52/6160 billion yuan, respectively, and the corresponding EPS is 0.84/1.15/1.38 yuan, respectively, and the PE corresponding to the closing price on April 1, 2024 is 35/26/21 times, respectively. Considering that the company is a leader in the gold industry and the merger and acquisition of Yintai Resources has greatly increased production reserves, Liberty Mine is expected to further release production after resource integration and maintain the “recommended” rating.
Risk warning: risk of gold price fluctuations, risk of production safety, risk of capacity construction falling short of expectations