In the first half of 2013, the company achieved operating income of 672 million yuan, an increase of 13.31% over the previous year; operating profit of 251 million yuan, an increase of 184.29% over the previous year; net profit attributable to owners of the parent company was 221 million yuan, an increase of 258.54% over the previous year; and basic earnings per share of 0.2382 yuan.
In order to implement the strategic goal of transforming into the mining industry, the company transferred 100% of the shares of its subsidiary Shandong Zhongrun Real Estate Co., Ltd. The company's operating profit during the period mainly came from the disposal of the investment income of Shandong Zhongrun Real Estate Co., Ltd., which achieved an investment income of 263,0839 million yuan. Due to the impact of the disposal of subsidiary equity earnings, the company's operating profit and net profit for the current period also increased sharply compared to the same period last year.
It is proposed to take control of the Huatucola gold mine step by step. Zhongrun International invested in Huatucola Gold Mining Company in two installments, with an investment of about 20 million US dollars each: the first phase of Huatucola Gold Mining Company issued 188.897 million common shares to Zhongrun International at a unit price of 6.89 pence, totaling about 13 million pounds; the second phase of Huatucola Gold Mining Company will be financed by issuing 20 million US dollars of debt notes to Zhongrun International. Debt notes are issued for a period of six years, with interest of 13% per year, and repayment is made during the last three years of the debt period. The debt notes are issued in 2013/12. After the transaction is completed, Zhongrun International's shareholding ratio will rise to 65.66%, achieving holding.
Before the divestiture of Zhongrun Real Estate, Zhongrun Real Estate transferred all 88% of Zhongrun Zibo Real Estate's shares to the company. Eventually, the company changed from indirect ownership to direct ownership of 100% of Zibo Real Estate's shares. Currently, it is the company's only remaining real estate asset.
The company's main tasks for the second half of the year. Step up prospecting work within the mineral rights area of Sichuan Pingwu Zhongjin Mining Co., Ltd.; participate in managing the Huatukola Gold Mining Company mine production and operation work to gradually achieve the production and operation goals of fully achieving production and turning losses into profits; increase the investigation, verification and acquisition of large and medium-sized mining projects in production or close to production at home and abroad. Judging from now on, the company's prospecting requires a lot of upfront investment. Even if exploration goes well, production and mining will still take a long time, and there is great uncertainty.
Profit forecast and investment rating: We previously estimated the company's earnings per share for 2013-2014 to be 0.34 yuan and 0.40 yuan respectively. Based on the calculation of the closing price of 5.10 yuan on August 22, 2013, the corresponding dynamic price-earnings ratios were 15 times and 13 times respectively, maintaining a “neutral” investment rating.
Risk warning: The development cycle of mineral resources is long, and there is great uncertainty; there is a risk of commodity fluctuations.