On April 27, the company released its 2024 quarterly report. 1Q24 achieved revenue of 7.818 billion yuan, +71.83% month-on-month, +37.85%; net profit to mother of 162 million yuan, +54.81% month-on-month, +52.58% year-on-year; net profit without return to mother of 159 million yuan, +48.43% month-on-month and +51.84% year-on-year.
Higher gold and antimony prices led to an increase in Q1 performance. The average price of 9995 gold on the 1Q24 Shanghai Gold Exchange was 489.62 yuan/gram, +4.05% month-on-month, and 99.65% antimony ingots averaged 891,000 yuan/ton, +9.06% month-on-month. The increase in the price of gold and antimony products drove the company's Q1 revenue +71.83% month-on-month to $7.818 billion, gross profit +4.01% month-on-month to $443 million, R&D expenses -45.74% month-on-month to $75 million, income tax expenses to $26 million, net profit to mother +54.81% month-on-month to $162 million, and ROE increased 0.88 percentage points month-on-month to 2.58%.
The balance ratio has declined, and expense management continues to be deepened. As of the end of March '24, the company's balance ratio was 15.02%, down 2.04 percentage points from the end of '23. 1Q24 The company's operating tax and additional/sales revenue decreased 0.39 percentage points to 0.29% month-on-month, sales expenses decreased 0.11 percentage points to 0.06% month-on-month, management expenses decreased 0.29 percentage points to 1.87% month-on-month, R&D expenses decreased 2.09 percentage points to 0.96% month-on-month, and deepened cost management increased profit margins.
Mineral gold has long-term growth potential. In '23, Gansu Jiaxin obtained mining licenses for the Yidinan Copper and Gold Mine, with production scales of 500,000 tons/year and 90,000 tons/year respectively; Hunan Gold Group, the controlling shareholder of the company, completed the transfer and change of all 7 mining rights and 7 prospecting rights in the Wangu mining area. It is expected that after integrating the Wangu mining area and injecting them into the listed company, it will contribute to the company a long-term source of incremental mineral gold.
Short-term inventories continue to break, and antimony prices are expected to continue to reach new highs. As of April 26, the antimony ingot factory had 3,390 tons in stock, -13.96% month-on-month, while the antimony oxide factory had an inventory of 6230 tons, or -13.95% month-on-month, and off-season inventories were being removed at an accelerated pace. As of April 25, the price of antimony was 98,000 yuan/ton, a peak in 13 years. Short-term inventories continued to break, and antimony prices are expected to continue to rise.
As a leader in the domestic antimony industry, the company will fully benefit from rising antimony prices.
The company's revenue for 24-26 is estimated to be 279/292/30.3 billion yuan, net profit to mother is 784/11.16/1,376 million yuan, EPS is 0.65/0.93/1.14 yuan, respectively, and the corresponding PE is 24.78/17.40/14.12 times, respectively. Maintain a “buy” rating.
Risk warning
Risk of gold and antimony price fluctuations, mine production falling short of expectations, project construction falling short of expectations, safety and environmental management risks.