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Zijin Mining (601899) Commentary Report: Steady increase in performance, overseas expansion or boosting capacity growth

Zijin Mining (601899) Commentary Report: Steady increase in performance, overseas expansion or boosting capacity growth
Event: Zijin Mining’s 2018 annual report 北京夜网 announced that the company’s 2018 operating income reached 1,059.9.4 billion, an annual increase of 12.11%; net profit attributable to mother is 40.9.4 billion, an annual increase of 16.71%; realized non-net profit deduction of 30.6.1 billion, an annual increase of 13.51%.Achieve gross profit margin 12.59%, net interest rate 4.42%, EPS is 0.18 yuan.The company’s 2018 dividend distribution plan is: a cash dividend of 1 yuan (including tax) for every 10 shares, totaling 23.0.3 billion, accounting for 56% of net profit attributable to mothers.26%. The group’s consolidated gross profit margin is 12.59%, a year down 1.For 35 units, if smelting and processing products are excluded, the gross profit margin of mineral products is 46.31%, a year of decline of 0.93 single, the first is the rising cost of mineral products. Investment points: Copper business becomes the company’s main growth point of profit: In 2018, the company’s mineral copper output increased significantly. In addition to the impact of rising copper prices, copper business sales accounted for 19 of its reported operating income.90%, gross profit accounted for 36% of the group’s gross profit.twenty four%.The copper business is the main source of corporate profits.The price of gold has increased, but the output of mineral gold has been affected by the earthquake and the cost of starting production has risen, although the sales revenue ratio has reached 50.82%, but gross profit accounted for 21 of the group’s gross profit.4%.The output of zinc concentrate was basically flat, and the price of zinc was reduced. Due to the significant effect of cost control, the sales income of lead and zinc business accounted for 6% of the operating income in 2018.59%, gross profit accounted for 21 of the group’s gross profit.30%. Overseas acquisitions to help the company’s future competition and profitability: The company is accelerating the construction and production of major overseas mining projects that have completed mergers and acquisitions, focusing on accelerating the Congo (Gold) Kamoa copper mine, Serbia (Gold) Kolwezi copper mine, SerbiaThe technical reconstruction and expansion of the boron copper mine, and the integrated operation of the Bisha mine, overseas projects will become a great help for the company to enhance its future competitiveness and profitability. Profit forecast and investment advice: We estimate Zijin Mining’s net profit to be returned to its mother in 19-21: 62.77, 73.41, 80.8.2 billion, EPS are: 0.27, 0.32, 0.35 yuan.Corresponds to the closing price of 3 on April 1, 19.65 yuan of PE are: 13.39, 11.45, 10.40 times.Maintain overweight rating. Risk factors: Mine reserves are less than expected risks, the risk of falling prices of main products, the risk of excessive development costs, and the risk of mine safety.