Yunnan Copper (000878): Sailing on light sails
The net profit attributable to mothers decreased by -46% year-on-year in 2018, and the net profit attributable to mothers increased by 50 every first quarter of 2019.
The company released its annual report on April 3, with revenue of approximately 474 in 2018.
300,000 yuan, at least -16.
80%, net profit attributable to mother 1.
2.5 billion, -46.
04%, of which electrolytic copper, precious metals, sulfuric acid income accounted for 69%.
55% and 1.
On April 12, the 2019Q1 performance forecast was released, and net profit attributable to mothers is expected1.
90 ppm, an increase of 50 per year.
In 2018, the volume and price of electrolytic copper and sulfuric acid both rose, achieving a gross profit of 36.
20 ppm, a 63-year increase of 63.
First, benefiting from the commissioning of the Southeast Smelter, the company’s copper and sulfuric acid production increased significantly.
The company’s electrolytic copper output was 68 in 2018.
02 teens, +8 per year.
65%, sulfuric acid yield 216.
13 Initially, at least +11.
In terms of by-products, gold production was 7.
8 tons, at least -22.
22%, silver production is 497.
05 tons, +10 for ten years.
The second is the rise in copper and sulfuric acid prices.
In 2018, the average prices of copper, sulfuric acid, gold, and silver were 50618 yuan / ton, 375 yuan / ton, 271 yuan / gram, and 3616 yuan / kg, +2 each time.
65% and -7.
Based on this, the company achieved gross profit in 201836.
20 trillion, ten years +63.
1%; the proportion of gross profit of electrolytic copper, precious metal, and sulfuric acid is 51.
52% and 11.
77%, gross profit of other main business accounted for 16.
The accrual of impairment in 2018 and the rise in taxes and fees have dragged down performance.
The first is the outstanding provision for asset impairment losses.
The company accrued asset impairment losses in 20185.
3.8 billion, previously +102.
This is mainly due to the temporary suspension of production at the Muding Haojiahe Copper Mine of Yunnan Chuxiong Mining and Metallurgy Co., Ltd., a subsidiary of Yunnan Chuxiong Mining and Metallurgy Co., Ltd., which is a subsidiary of this period, and made provision for asset impairment.
The second is the increase in taxes and fees.
Corporate taxes and surcharges for 2018 are 2.
99 ‰, +37 a year.
62%, mainly due to the increase in the subsidiary’s resource tax; administrative expenses in 20189.
44 trillion, +49 a year.
67%, mainly due to the suspension of production of Chifeng Yuntong, a subsidiary of the company, due to relocation and technical transformation.
Financial expenses for 2018 8.
84 trillion, +61 a year.
74%, mainly due to the relatively large scale of financing in this period, the increase in index expenditures and exchange losses.
Third, investment income turned negative.
Investment loss in 2018 was -0.
15 ppm, ten years -107.
Among them, the investment income from associates and joint ventures was -0.
400,000, at least -252.
Mainly because the company’s subsidiary Yunnan Jinggu Mining and Metallurgy Co., Ltd. and Yongren Tuanshan Copper Mine did not merge and merged back to the recognized excess income in the previous period, and the profits of associates in the current period decreased from the previous period.
Fourth, non-operating expenses increased.
Non-operating expenses in 2018 were 0.
61 trillion, +137 for ten years.
62%, mainly because the subsidiary in the current period bears the “three supply and one industry” separation and transfer of transformation costs.
2019Q1 returns to net profit of mother 1.
900,000 yuan, up 50 in ten years.
The first is to combine Diqing Nonferrous 50.
01% equity boosts copper concentrate sales.
Considering that the average copper price in the first quarter of 2018 was 52,417 yuan / ton, the average copper price in the first quarter of 2019 was only 48,720 yuan / ton, a decrease of 7%. The company’s Q1 performance improvement mainly began at the end of 2018 and showed Diqing Nonferrous 50.
The respective Pulang copper mines of Diqing Nonferrous Metals are initially in production. After the production is completed, the annual copper concentrate output is about 6 and the company’s equity copper concentrate output is increased by about 3.
The second is to optimize the internal management at the end of 2018 and accrue asset impairment5.
3.8 billion, the initial operating burden was significantly digested.
Looking forward to 2019?
In 2020, the company’s mineral copper and smelting copper output is expected to increase significantly, and financial expenses are expected to decrease.
On January 30, 2019, the company completed the fixed increase, and the net amount of funds raised was 21.
19 trillion, mainly used to acquire Diqing Nonferrous 50.
01% equity, to build Southeast Copper Smelter and make up current.
With the gradual implementation of fund-raising projects, the company’s performance flexibility has increased significantly.
First, the output of mineral copper equity is expected to increase by more than 60%.
The company currently produces about 5-6 additives of copper concentrates, considering the acquisition of Diqing Nonferrous 50.
The 01% equity is merged with the Pulang copper mine, and the company’s copper concentrate output will double to 11-12 ownership, and the equity income will increase by more than 60%.
Second, the company’s smelting capacity is expected to double.
The company’s existing smelting capacity is 65, and the introduction of smelting plants through the expansion of Southeast Copper 40, and the relocation of Chifeng Smeltery to 40 power generation and production, the company’s smelting capacity will double to 130 instead, an increase of 100%.
Thirdly, the company’s financial expenses are expected to be reduced by increasing the funds in place.
In 2018, the company’s long-term loans were 89.
34 trillion, +115 a year.
39%, bills payable and accounts payable were 51.
7.2 billion, previously +49.
08%, mainly due to the increase in project loans and the adjustment of the financing structure of the subsidiary Chinalco Southeast Copper and Chifeng Yunnan Copper due to the project construction, increasing long-term debt; and the increase in bill settlement in the current period, payable for engineering, equipment and unsettledThe increase in the purchase of raw materials and the gradual expansion of the use of determined value-added capital will help the company optimize the company’s capital structure and reduce financial costs. The listed company and the group have abundant resources. The actual controller, China Aluminum Corporation, is constantly strengthening, and the company has great potential for resources.
First, the copper resources of listed companies are 518.
98 ore, sufficient reserves of mineral rights, cracks in increased storage space.
According to the company’s announcement, in 2018 the company acquired Diqing Nonferrous Nonferrous Metals’ new resource reserves of 316.
90 Initially, 18 mine deep-side exploration projects were carried out to supplement the copper and metal resources reserves8.
6 or more.
As of the end of 2018, the company had 518 copper resources above 333.
The second is the potential of the direct controlling shareholder Yunnan Copper Group’s resource injection potential.
First, as of the end of 2017, the group has 21 mines in production and 2 mines under construction in Yunnan, Sichuan, Qinghai, Tibet and other regions. The reserve of resources (metal) is 877 blocks of copper, of which the listed company’s resource reserves are approximately 518., Listed companies have 360 initial resources in vitro.
Second, the probability of selective injection of Liangshan Mining, which belongs to the Yuntong Group, converged.
According to the company’s announcement, in October 2016, the Yuntong Copper Group promised to start the work of injecting its equity in Liangshan Mining into Yunnan Copper within one year of the completion of the Pulang copper mine injection.
Liangshan Mining’s annual output of copper metal2.
As far as 5 is concerned, it is also equipped with 10 smelters with a capacity of 10, which mainly produces anode plates, with stable profitability.
Investment suggestion: Give “Buy-A” rating with a 6-month target price of 14.
Considering that the overall growth rate of global copper ore supply is at a low level in the next three years, and that copper ore supply is particularly tight in 2019, copper processing fees will obviously 武汉夜网论坛 decline; coupled with the gradual trend of global monetary easing, the demand-side steady growth policy will be gradually implementedThe downside risk of copper price is reduced, and the upside probability is systematically enhanced.
The company merged and consolidated the Pulang Copper Mine and the Southeast Smelter and gradually reached its output. The output of copper concentrates and smelted copper is expected to increase, and the flexibility of performance will increase accordingly. In addition, the direct controlling shareholder will supplement the resource injection potential, and it is a practical and feasible estimate of the premium.
We follow the 2019-2021 copper price 5.
0 million yuan, 5.
30,000 yuan, 5.
50,000 yuan hypothesis is calculated, and the company’s EPS is expected to be 0.
36 yuan, 0.
42 yuan and 0.
48 yuan, given a six-month target price of 14.
55 yuan, equivalent to 40x dynamic price-earnings ratio in 2019.
Risk reminders: 1) The global economic growth rate exceeds expectations; 2) Global copper mine output exceeds expectations, and the copper supply disruption rate exceeds expectations; 3) The company’s product output is lower than expected, and subsequent mine injections are lower than expected.