Zhongjin Lingnan (000060): New materials with stable main business profits provide incremental performance
Event: The company released its 2018 annual report, which reported revenue of 199.
6.3 billion, an increase of 5.
26%; net profit attributable to mother 9.
20 trillion, the same minus 13.
78%; net profit after deduction to mother 9.
3.6 billion, an increase of 2.
26 yuan / share, in line with market expectations.
The company announced its business plan for 2019: preliminary production of lead-zinc concentrate 30.
18 四川耍耍网 carats; 6756 tons of copper metal, 143 tons of silver in concentrate and 189 kg of gold in concentrate.
The company intends to distribute 0 cash dividends to shareholders for every 10 shares this year.
8 yuan (including tax).
The overall annual production target was achieved, and the output of major products was stable.
In 2018, the company produced 30 lead and zinc metal concentrates.
42 Initially, it grew by 3 per year.
47%; sulfur concentrate 70.
59 for the first time, growing by 7 per year.
95%; the concentrate contains silver 133.
09 tons, down by 0 every year.
60%; the total output of lead and zinc from smelting products is 25.
94 Initially, it fell by 0 each year.
50%; aluminum profile 1.
86 for the first time, an increase of 6 over the same period last year.
The main products of lead-zinc concentrates and smelted products have achieved the set goals and stable output.
Weak demand and trade war both hit zinc prices peaking down and performance under pressure.
The implementation of the environmental protection tax in early 2018 forced the transformation and upgrading of enterprises. In the first half of the year, most domestic smelters took turns to overhaul and reduce production. The overall domestic production was difficult to increase.
In the second half of the year, due to the dual impact of Sino-US trade friction and weak downstream demand, zinc prices fell under pressure from early February 2.
74 million / ton down to 2 in mid-August.
100,000 yuan / ton.
Although the macro negatives gradually digested in the third quarter, the fundamentals are good and prices have rebounded, but the average price of a small amount of zinc was 2.
39 million / ton, down by 1 every year.
The decline in zinc price directly dragged down the company’s performance and achieved zero profit.
20 ppm, a reduction of 13 per year.
Acquisition of Myanmar Metals to strengthen overseas resource reserves.
In the report summary, the company’s wholly-owned subsidiary, Peliya, acquired Myanmar Metals Co., Ltd. for approximately A $ 14.97 million.9% equity, participating in the exercise of 51% controlling interest in the Baodewen polymetallic mining project.
The Bao Dewen deposit is located near the China-Myanmar Expressway, with an excellent geographical location, about 200 kilometers from the border of China; it is rich in resources and has 7690 alternative resources (@ Pb4.
6% @ Zn2
After the completion of the acquisition, it will help strengthen the company’s resource reserves and create synergy with the company’s smelting resources in Guangdong Province.
A number of engineering projects are expected to be put into production in 19 years, and new materials provide incremental performance.
Sun company Ganzhou High Energy intends to participate in the auction of asset packages in Ganzhou Tianli Industrial Park to expand the production and research of new materials; the construction of a new materials research and development center project is expected to be completed and used in early 2019, which will effectively enhance the company’s new material technology innovation capabilities; the designed capacity is 20,400t/ a high power mercury-free battery zinc powder is expected to be completed and used in July 2019.
The company has steadily laid out deep processing of new materials and plans to create new profit growth points.
Earnings forecast and investment rating: As the zinc price rose less than expected, the company reduced its net profit to 10 from 2019-2021.
44 ppm (15 by 2019 to 2020).
4 billion); the corresponding EPS is 0.
38 yuan / share (pre-tier 0 from 2019 to 2020.
52 yuan / share), corresponding to dynamic PE of 20/17/15 times, maintain “Buy” rating.
Risk reminders: the risk of bad debts in invoices receivable, the risk of exchange rate changes, the risk of product price fluctuations, and the risk of environmental protection.