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赤峰黄金(600988):业绩改善明显 降本增效成效显著

Chifeng Gold (600988): Significant improvement in performance, significant cost reduction and efficiency

中郵證券 ·  Apr 9

Performance improved significantly, and profits increased significantly year-on-year

On the evening of March 29th, the company released its 2023 annual report. The company achieved operating income of 7.221 billion yuan, an increase of 15.23% over the same period of the previous year; realized net profit of 804 million yuan, an increase of 78.21% over the same period of the previous year; realized net profit without deduction of 866 million yuan, an increase of 115.97% over the same period of the previous year. It mainly benefited from the sharp rise in the volume and price of mineral gold in 2023.

In 23Q4, the company achieved operating income of 2.559 billion yuan, 27.68% month-on-month and 20.55% year-on-year; realized net profit of 284 million yuan, 36.54% month-on-month and 416.36% year-on-year.

Production and operation have been steadily improved, and the results of cost reduction and efficiency have been remarkable

The company completed 14.35 tons of mineral gold in 2023, a year-on-year increase of 5.79%. Among them, domestic gold mines produced 3.32 tons of gold in 2023, an increase of 43.1% year on year; overseas gold mines completed 11.03 tons of gold production in 2023, a decrease of 2.0% year on year. Mainly, in the 3rd quarter of 2023, Venus was affected by massive floods, which had a great impact on high-grade mining production, and production was lower than planned at the beginning of the year. In 2023, the full maintenance cost of the company's gold unit measured in RMB decreased by 12.00% year-on-year. The company achieved remarkable results in cost reduction and efficiency, and the recovery rate increased.

In 2024, the company will continue to promote the technical transformation of the tailings regrinding process and resin beneficiation process. The gold beneficiation recovery rate is expected to reach 75% or more; at the same time, Venus Wasa will introduce third-party contractors to reduce costs. Looking ahead to 2024, the company plans to produce and sell 16.02 tons of gold, 5,300 tons of electrolytic copper, 35,800 tons of copper, lead and zinc powder, 600 tons of molybdenum powder, and 3,700 tons of rare earth oxides this year. It is expected to achieve annual revenue of 8.8 billion yuan and net profit attributable to the parent company of 1.1 billion yuan.

Key projects under construction are progressing smoothly

Underground development projects such as the 163 blind shaft deepening project (middle section 23-27) of Wulong Mining's four-point mine continue to advance, and the average daily mineral processing volume of the plant has increased to more than 1,800 tons in the second half of 2023.

Geelong Mining's annual additional 180,000 tons of gold ore beneficiation expansion project is expected to be completed and put into trial production in June 2024. Construction of the new tailings depot will begin in mid-November 2023.

Jintai Mining's 140,000-ton annual mining and construction project for the Xidengping Gold Mine began on March 29, 2023. The entire project was completed and put into production and use in October 2023. At the same time, all production processes were completed.

Phased progress has been made in prospecting and increasing reserves, and the prospects are promising

In terms of prospecting and increasing reserves, in 2023, various domestic mining subsidiaries continued to “explore and find out” within mining rights, while increasing their prospecting efforts in peripheral prospecting rights areas. A total of 55,800 meters of construction and drilling projects were carried out throughout the year; 48,000 meters of drilling projects were completed. Hanfeng Mining completed a drilling project volume of 4,809 meters, adding 367,500 tons of ore resources. Deep exploration in the Dongfeng Molybdenum Mining Area estimates an increase of 70,000 tons of molybdenum metal. The Saipan mine has carried out six major resource growth projects, including the Kanon underground primary copper mine, the Far West Open Surface Oxide Gold Mine, and the underground native gold mine. The exploration project has a drilling project of 38,838 meters and a resource extension drilling project of 25,593 meters. Significant progress has been made in exploration. By the end of 2023, 5.3 million tons of additional gold ore resources were added.

Investment advice

We expect the company to achieve operating income of 84.59/95.12/10.465 billion yuan in 2024/2025/2026, up 17.14%/12.45%/10.01% year on year; net profit to mother will be 12.12/14.31/1,698 billion yuan, respectively, up 50.75%/18.06%/18.69% year on year, and corresponding EPS of 0.73/0.86/1.02 yuan respectively. Based on the closing price of 19.00 yuan on April 8, 2024, the corresponding PE corresponding to 2024-2026E was 26.09/22.10/18.62 times, respectively. Maintain a “buy” rating.

Risk warning:

The macroeconomy exceeded expectations, the Federal Reserve's policies exceeded expectations, project construction fell short of expectations, etc.

The translation is provided by third-party software.


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