Main points of investment
Since 2016, around the new energy industry chain, the company has gradually become a domestic high-quality mining enterprise focusing on nickel, copper and cobalt. The layout of the company's copper, cobalt and nickel projects began in 2016. the existing layout is as follows: 1 Congo Copper and Cobalt, CCR (51% interest, copper-cobalt smelting) + CCM (100% interest, copper-cobalt smelting) + Kalong Wei (95% interest, copper-cobalt mine); 2 domestic cobalt deep processing + zinc smelting, Ke Lixin (100% equity acquired in 2018, cobalt deep processing), four-ring zinc germanium (2019 acquisition, existing 100% equity, zinc smelting) 3 by the end of June 2021, the company has a production capacity of 40,000 tons of copper, 8000 tons of cobalt, 40,000 tons of nickel and 250000 tons of zinc. With the commissioning of CCM (30,000 tons of copper, 5800 tons of cobalt) and Kalongwei (30,000 tons of copper, 3556.4 tons of cobalt) and the expansion of four-ring zinc and germanium, the company will form an annual production capacity of 120000 tons of copper, 45000 tons of nickel, 16000 tons of cobalt and 300000 tons of zinc in the next three years.
The company has entered the period of harvest and high-speed growth since 2021. The company began to lay out the new energy industry chain since 2016. the main reason for the sharp fluctuation in 2017-2019 is the fluctuation of cobalt price. from 2017 to 2019, the company's return net profit changed by + 4.2,1.2 and-190 million yuan respectively compared with the same period last year. The gross profit of cobalt material business changed by + 7.1,1.5 and-560 million yuan respectively; in 2020, due to exchange losses and bad debt losses, the net profit decreased by 240 million yuan compared with the same period last year. According to the split of the results in the first half of 2021, the contributions of Youshan Nickel, CCR, Sihuan Zinc Germanium and Ke Lixin to the company's return net profit were 2.60 yuan, 289 million yuan, 9934 yuan and 44.69 million yuan respectively. 2021H1, Youshan Nickel and CCR accounted for 76.92% of the company's return net profit, and the company's new energy layout gradually entered the harvest period. In the future, with the commissioning of CCM and Kalong Wei projects, the company's profits will be greatly thickened.
Profit forecast and rating: a substantial increase in production capacity, superimposed high metal prices, the company's profits may enter a period of rapid growth. We maintain the profit forecast for the company, assuming copper price 60,000 yuan / ton, nickel 110,000 yuan / ton, MB cobalt price $20 / lb, zinc 17,000 yuan / ton, 2CCM project began to release production in 22 years, 3 zinc smelting capacity increased by 20,000 tons / year. It is expected that from 2021 to 2023, the company will achieve a net profit of 14.3,19.9 and 2.61 billion yuan respectively, with an EPS of 0.52,0.72 and 0.95 yuan, respectively, and a PE of 22.7,16.3 and 12.4 times corresponding to the closing price on September 2, respectively, maintaining the "prudent overweight" rating.
Risk tips: copper, cobalt, nickel and other metal prices fell sharply; the project production schedule is not as expected; exchange rate fluctuation risk; other macro risks.
