Incident: The company announced its 2023 annual report, achieving revenue of 7.221 billion yuan, an increase of 15.23%; net profit to mother of 804 million yuan, an increase of 78.21%; after deduction, it was 866 million yuan, an increase of 115.97%.
The results of open source savings and cost reduction are gradually showing, and there is still room for profit improvement compared to companies in the same industry. 1) According to the annual report, the company's mineral gold sales unit price in 2023 was 435.73 yuan/gram, up 13.80% year on year; sales cost was 280.20 yuan/gram, up 1.13% year on year; gross profit was 155.53 yuan/gram, up 46.97% year on year; gross margin was 35.69%, up 8.06 percentage points year on year. 2) The company's domestic mine sales cost was 152.69 yuan/gram, down 17.24% year on year; Vientiane mining sales cost was 1489.89 US dollars/ounce, down 2.48% year on year; although the sales cost of Venus Vasa still increased by 16.51% (1315.47 US dollars/ounce), the overall maintenance cost decreased by 12.70% (1197.13 US dollars/ounce), and the cost reduction effect gradually became apparent. 3) We sorted through comparable companies in the same industry and found that the company's sales cost in 2023 was 280.20 yuan/gram. Compared with Shandong Gold (230.38 yuan/gram), Zijin Mining (223.06 yuan/gram), and Yintai Gold (176.42 yuan/gram), there is still plenty of potential for profit release.
“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 the “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: In 2024-2026, we expect the company's EPS to be 0.93, 1.08, and 1.19 yuan, respectively, and PE will be 20, 17, and 15 times, respectively, maintaining a “buy” rating.
Risk warning: Macroeconomics causes gold price fluctuations, projects falling short of expectations, cost disturbances, exchange rate risks, etc.