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赤峰黄金(600988):矿产金量价齐升 降本增效成果显著

Chifeng Gold (600988): The volume and price of mineral gold have risen, the cost has increased, and the efficiency results have been remarkable

中金公司 ·  Apr 3

2023 results are in line with market expectations

The company announced its 2023 results: revenue of 7.221 billion yuan, +15.23% year over year; net profit to mother of 804 million yuan, +78.21% year over year; net profit of 866 million yuan, +115.97% year over year; earnings per share of 0.48 yuan, +78.21% year over year. The company's 4Q23 revenue was 2.559 billion yuan, +20.54% year on month, +27.68% month on month; net profit to mother was 284 million yuan, +416.60% year on year, +36.54% month on month. The company's performance is in line with market expectations.

Development trends

Mineral gold ushered in a sharp rise in volume and price, with remarkable results in cost reduction and efficiency. In terms of volume, the company completed 14.35 tons of mineral gold in 2023, +5.79% year over year. The company announced plans to target 16.02 tons of mineral gold in 2024, +11.64% year over year. In terms of price, the average price of gold in 2023 was 449.05 yuan/gram, +14.97%. Since the beginning of 2024, the price of gold has further increased by about 11%. Considering the strengthening of US interest rate cuts, compounded by geopolitical influence, we expect the price of gold to continue to rise. In terms of cost, the company continues to work closely to reduce costs and increase efficiency. Gold production has achieved remarkable results. The total cost per unit maintenance cost (AISC) of gold in '23 was -12.00% compared to the same period last year.

Increased production and cost control in gold mines continue to go hand in hand. Domestically, the first is that Geelong Mining's new 180,000 tons of gold ore beneficiation expansion project continues to advance, and the company plans to test production in June 2024; second, Wulong Mining continues to improve mining capacity through underground technical improvements to meet the needs of 3,000 tons/day, and the average daily mineral processing volume in the second half of 2023 has increased to more than 1,800 tons; third, the first phase of Xidengping Gold Mine has been put into operation in October 2023, and the entire production process has been completed. Overseas, first, significant progress has been made in exploration of the Sepon mine in Laos. By the end of 2023, 5.3 million tons of gold ore resources were added. Furthermore, the company plans to increase the recovery rate from 66.5% to more than 75% and continue to reduce costs through the tailings regrinding process and resin beneficiation process technology; second, the Wassa mine in Ghana will expand production, while stabilizing production in the main mining area, and develop two new underground mining areas on the 242 and B-Shoot southern slopes to quickly supplement the existing selection and increase gold production.

The rare earth business set sail. The rare earth business has always been an important strategic development direction for the company in Laos. The company acquired the rare earth mining project in Laos on March 4, 2024 and began working in the rare earth sector. The company plans to produce 3,700 tons of rare earth oxides in 2024. We believe that the commissioning of this rare earth project is expected to increase the company's performance and provide a platform and opportunity for the company to further expand rare earth resources.

Profit forecasting and valuation

Considering the rise in gold prices, we raised the company's 2024/2025 profit forecast by 10%/19% to 1.52 billion yuan. The current stock price corresponds to 18.9x/16.9x P/E 2024/2025. Maintaining an outperforming industry, considering the current boom in the industry, the target price was raised by 24% to 23 yuan, corresponding to 25.0x/22.4x P/E in 2024/2025, with 32% upside compared to the current stock price.

risks

Product prices fluctuated greatly, project progress fell short of expectations, and overseas geopolitical risks.

The translation is provided by third-party software.


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