Main points of investment:
Silver smelting capacity continues to increase, and 2000 tons will be built to reach the top of the world.
The company's electrolytic silver production capacity continues to increase, from 400t at the initial stage of listing to the first expansion to 600t, the current company's electrolytic silver production capacity is seriously overloaded, 2000 tons capacity construction has been put on the agenda, and is expected to be completed and put into production in 2019. At that time, although the company's silver production capacity still has a large gap with the first Prenoles3670.2 tons, it has been neck and neck in terms of production, far ahead of Poland Copper and other smelting enterprises.
With the expansion of upstream minerals, the amount of resources is expected to be in the forefront of the world.
The company continuously acquired gold and mining and Junlong Mining in 2016 and 2017. In 2018, the company planned a major asset restructuring, acquiring a 100% stake in Jiayu Mining and Donggu Cloud Merchants in cash and a 65% stake in Yubang Mining. Among them, the amount of silver metal in Yubang Mining is expected to reach 18600 tons, and the company's total silver resources will be close to 20, 000 tons, second only to Penoles's 25000 tons, ranking second in the world. The company's future mineral silver is worth looking forward to.
Lead matte project is expected to reach production by the end of this year, and high profits can be replicated.
In the first half of 2018, the lead matte project achieved a benefit of 27.6699 million yuan. Although it is still up to production, the benefit has been considerable, and the annual benefit is expected to be about 60 million yuan, which is close to the initial estimated value of the project. China produces about 1 million tons of lead matte every year, which on the one hand ensures an adequate supply of raw materials for the company's projects, and on the other hand, other enterprises and local governments will also choose the mode of cooperation or bidding to build resource recovery projects. Companies can choose to expand their own capacity, or cooperate with other companies or local governments as technology transferors or operators.
Profit forecast and investment advice
It is estimated that the company's revenue from 2018 to 2020 will reach 11.78 billion yuan, 12.9 billion yuan and 14.19 billion yuan respectively, and the net profit returned to the mother is 320 million yuan, 359 million yuan and 388 million yuan respectively, the corresponding EPS is 0.33,0.37 and 0.4 yuan respectively, and the PE is 21.6x, 19.3x and 17.8x respectively.
Risk hint
The mine development of the company is not as expected; the expansion of silver smelting is not as expected; the production of lead matte is not as expected.