Zijin Mining (601899) semi-annual report comment: Increased revenue due to Tongzi business is difficult to reduce gross profit

Zijin Mining (601899) semi-annual report comment: Increased revenue due to Tongzi business is difficult to reduce gross profit
Event: Zijin Mining’s 2019 semi-annual report was released, achieving revenue of 671.9.8 billion, an annual increase of 34.90%, net profit attributable to mother 18.5.3 billion, down 26 each year.64%, lower than expected. Key points of investment: The main metal is boosted by overseas projects, the output increases, and the company’s total revenue growth accelerates, but the decline in the gross profit of copper and zinc has dragged down the company’s performance.The output of mineral copper and zinc increased by 13 respectively.18%, 44.33% and 25.92%.Smelting output has also increased significantly.This will drive the company’s total revenue to grow for ten years.90%.Despite the increase in the company’s gross profit margin for minerals, the Group’s comprehensive gross profit margin was 11 due to the relatively large proportion of copper business’s profit in the company’s total profit. Due to the weak demand for copper and zinc and the downward price impact.24%, a decline of 3 per year.01 averages.The comprehensive gross profit margin of mining enterprises was 44%, a year-on-year decrease of 5%.82 single; smelting company’s comprehensive gross margin is 1.41%, a decline of 0 every year.18 singles, the company’s net profit attributable to its mother decreased by 26 year by year.64%. Overseas projects continued to develop, and the international operation level improved: the company’s new merger and acquisition project integration work was implemented efficiently, Serbia’s Bol (copper) mine took over smoothly, and realized a turnaround. The Timok copper-gold mine construction was advanced in an orderly manner;)) Important progress has been made in the construction of the Kamoa-Kakura Copper Mine Project. Newly discovered high-grade massive copper sulfide mineralization in northern Kamoa;The 10,000-ton capacity wet process system was put into full production and entered the ranks of 10-year / grade large-scale copper mines. Copper and cobalt resources continued to increase in reserves. The PNG Pogola gold 杭州夜网 mine resumed its production capacity and the Tuwalongxing zinc polymetallic mine mining system opened.Kyrgyz Autongke Gold Mine and Tajik Zelavshan Gold Mine have achieved outstanding technological transformation results, and the company’s international operation level has continued to improve. It is expected that zinc prices will remain under pressure in the future, gold prices will be on the uptrend, and copper prices will continue to fluctuate for a short period of time, and still have long-term growth momentum: macroeconomic impact, weak zinc demand, and pressure on prices; tight supply at the copper mine end, and TC / RC continued to fallOr, it may affect the smelting end enthusiasm and translate into economic recovery. Copper demand is expected to rise after 20 years. Due to uncertain factors such as Sino-US trade friction, gold prices continue to rise.We are optimistic about the company’s future operations. Profit forecast and investment advice: We estimate that the company’s net profit attributable to its parent will be 34 in 19-21.16, 39.39, 50.34 billion, EPS are: 0.15, 0.17, 0.22 yuan, corresponding to the closing price of 3.The PE of 70 yuan is: 24.95, 21.63, 16.93 times, maintaining the “overweight” level. Risk factors: The main product prices continue to decline, exchange rate changes, overseas mine location policy changes, new project commissioning is less than expected, production safety issues, changes in national environmental protection policies, etc.