The company discloses 23 years of results. The company achieved operating income of 2,254 billion yuan in 2008, an increase of 19.92% over the previous year; achieved net profit of 148 million yuan, a year-on-year decrease of 59.41%; and realized net profit without deduction of 140 million yuan, a year-on-year decrease of 60.98%. Looking at a single quarter, the company achieved net profit of 0.14 million yuan in Q23, down 90.27% year on year and 80.68% month on month; realized net profit deducted from mother of 10 million yuan, down 92.43% year on year and 86.21% month on month.
The company's 23-year profit distribution plan is to distribute cash dividends of 0.75 yuan (tax included) for every 10 shares, for a total distribution of 51 million yuan, with a dividend distribution ratio of 34.76%.
Net profit to mother decreased by 59.41% in '23. 1) Volume: The company's silver/lead/zinc production in 23 was divided into 145/13462/24825 tons, down 28.53%/7.97%/8.54% year on year; silver/lead/zinc sales were 145/13751/27375 tons, respectively, down 33.20%/13.88%/0.47% year on year; among them, the reason for the year-on-year decline in silver production sales in Jinshan mining and the relocation of the Guojin Guobin plant; 2) Price: Average silver price/non-ferrous lead market/non-ferrous market price zinc in 23 5,562 yuan/ Kilogram, 15,759 yuan/ton, and 2,1646 yuan/ton, year-on-year change of 18%/3%/-14%; 3) Others: Jinshan Mining's mining license renewal, additional equity payment conditions, tax and additional mining rights concession income of 79.6 million yuan; the environmental protection business situation of the gold industry fell short of expectations to calculate goodwill impairment preparations.
There is plenty of room for endogenous growth. The company's incremental silver projects include: 1) Yindu Mining: actively promoting the integration of its mining rights and deep prospecting and exploration; 2) Dongsheng Mining: processing land approval and other reporting procedures for mine development and construction, and striving to start construction within 24 years; 3) Jinshan Mining: Accelerating technical reform projects, striving to complete technical transformation and acceptance work by the end of Q3, while vigorously carrying out prospecting work for silver mines in the western area of the Eren Taolegai mining area; 4) Deyun Mining: is carrying out mining construction and mining Pre-preparation work.
The company's gold incremental projects include: Honglin Mining has obtained a “mining license” with a production scale of 396,000 tons/year. The mine is currently undergoing construction work, aiming to complete and put into operation in the first half of '25.
Extended mergers and acquisitions can be expected. While strengthening the refined production and management of existing mines, prospecting and increasing reserves, we are actively promoting mergers and acquisitions of high-quality precious metal native mineral resource projects such as silver and gold, and strive to complete a merger and acquisition project within the year, increase the company's mineral resource reserves, and enhance the company's sustainable profitability.
Profit forecasting and valuation. The company's silver business accounts for a high share of gross profit and will fully benefit from the rise in silver prices. We expect that in the next three years, as production expansion projects are gradually put into operation, the company will usher in investment opportunities with a sharp rise in volume and price. We expect the company's 24-26 EPS to be 0.50, 0.79, and 0.99 yuan/share, respectively. Referring to the valuation level of comparable companies, a PE valuation of 27-28 times 2024 was given, corresponding to a reasonable value range of 13.40-13.90 yuan/share, giving a “superior to the market” rating.
Risk warning. Production expansion fell short of expectations; copper prices fell short of expectations; raw material costs rose.