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Zijin Mining (601899): Performance growth in line with expectations in the long term or doubling room

Zijin Mining (601899): Performance growth in line with expectations in the long term or doubling room
The company disclosed the financial results for the third quarter of 2019: the first three quarters of 2019 achieved operating income of 1016.300 million, an increase of 33.4%; net profit attributable to mother 30.1 trillion, the same minus 10.3%, net profit of non-attributed mother 27.500 million, with a decrease of 14.7%, net operating cash flow +60.60,000 yuan, the company’s ROE 8 in the first three quarters of 2019.35%, a decrease from the same period last year.1pct. Among them, the company achieved revenue of 344 in 2019Q3.3 trillion, the same increase of 30.6%, a ring reduction of 9.8%, net profit attributable to mother 11.500 million, an increase of 39.5%, a ring increase of 17.7%, net of non-attributed net profit 11.0 million yuan, an increase of 29.0%, the ring increased by 20.2%, net cash flow from operating activities +16.500 million.The performance is in line with market expectations. We believe that the improvement in the gross profit of copper, gold and minerals will boost the performance, and the production cost control of Q3 mineral products is relatively better.1) Gross profit: In Q3 2019, the company’s quarterly gross profit increased by 3 from the previous quarter.5% to 39.7 trillion, the mining and smelting business increased by a quarter.8 ppm, other products and internal substitutions are replaced by 1.4.5 billion US dollars, reflecting the company’s mining and smelting business profitability improved significantly from the previous quarter.2) Cost: In the third quarter of 2019, the production cost of iron ore removal increased significantly from the previous month (+23.01%), a slight increase in mineral gold (+0.66%), the cost of the remaining mineral products has shown a month-on-month change trend, of which the production costs of mineral copper and zinc are located at small positions.72% and formaldehyde 5.12%.3) During Q3 2019, the company’s expenses decreased by about 62.55 million yuan from the previous month and remained stable overall: 2019Q3 sales expenses3.4.0 billion, down 6 from the previous month.63%; in particular, after the Q1-2 quarter continued to rise, management expenses decreased by 5 for the first time.14% to 9.1.3 billion, which may reflect the existing controls on the expense side.However, the debt end of Q3 continued to rise, and financial expenses increased by 2 from the previous quarter.81% to 3.100,000 yuan.From the perspective 厦门夜网 of period expense ratio, the company’s sales expense ratio, management expense ratio and financial expense ratio in the third quarter were 0.88%, 3.08%, 0.90%, respectively, change from the chain +0.03%, +0.34%, +0.11%, the company’s overall expenses remained stable during the period.4) For non-operating projects, the comprehensive restructuring of impairment gains and losses is reasonable, and the minority shareholders’ equity decreased slightly more than expected.The net income of the company’s fair value change in Q3 2019 was -1.500 million, a decrease of 2 from the previous month.6 trillion; the net investment income in the third quarter was about 32.43 million yuan, a slight decrease of about 1.09 million yuan, and remained stable overall; the company’s non-operating income and expenditure in the third quarter was -32.93 苏州桑拿网 million yuan, an increase of about 75.88 million yuan;”Credit” impairment loss was approximately 45.12 million yuan, an increase of approximately 2 from the previous quarter.600 million.At the same time, with the expansion of the Kluwezi Phase II, Bisha copper-zinc mine, and RTB non-wholly-owned subsidiary projects and consolidation, the minority shareholders’ profits and losses of the company in Q3 2019 replaced about 12.6% to 1.8.4 billion, which may reflect the improvement of the relative profitability of wholly-owned subsidiaries.We believe that Q3 involves some of the expenses brought about by the merger of new mergers and acquisitions. The cost of RTB and Bisha copper-zinc mines is still at the initial stage of cost reduction in new mergers and acquisitions. Earnings forecast and rating: The company will slightly reduce its net profit attributable to mothers from 2019 to 202141.8, 49.7,74.90,000 yuan, without considering the effect of the diluted share capital after the additional issue, corresponding to EPS 0.18, 0.22, 0.33 yuan, corresponding to PE 18 on October 29, 2019.3X, 15.3X, 10.2 times.With the release of multiple copper ore production capacity in the future, the price of gold has soared, and performance is expected to improve significantly. Risk reminder: economic recovery is slower than expected, trade war risks, own project is not progressing as expected, etc.