Shengda Mining (000603): Jindu put into production to support the company’s performance. Acquisition of Deyun and Jinshan expansion projects to promote future development

Shengda Mining (000603): Jindu put into production to support the company’s performance. Acquisition of Deyun and Jinshan expansion projects to promote future development
Core points: 1.Event company operating income for the first half of 201911.570,000 yuan, an increase of 30 in ten years.88%, net profit attributable to mother 2.12 ppm, an increase of 9 in ten years.03%; Achieve budget benefits of 0.31 yuan. 2.Our Analysis and Judgment (1) Chifeng Jindu Selecting Plant was put into production to support the company’s performance. During the reporting period, due to the continued downward pressure on the domestic economy, Sino-US trade frictions continued to escalate, industrial metal demand was dragged down and prices were suppressed.In the first half of 2019, the average spot price of silver at the Shanghai Gold Exchange was 3603.10 yuan / kg, reduced by 1 every year.71%; the average price of the zinc ingot market was 19,316 yuan / ton, a continuous decline of 12.33%; the average market price of lead ingot is 16,348.44 yuan / ton, down 12 before.99%.The decline in metal prices has affected the release of company performance.According to the report, after the company’s Chifeng Jindu Mining 30 was inserted into the concentrator and put into production, the company’s silver capacity was further released.The increase in production has supported the company’s performance growth. (2) The Fed is expected to strengthen its interest rate cut cycle, which will help the company ‘s silver price rise to support the company ‘s performance. In the long term, under the background of the global economic resonance and the escalating trade war, the global headed by the Federal Reserve is expected to enter the rate cut 南京夜网 cycle.The currency easing cycle is conducive to rising precious metals and silver prices.The recent US 2-year short-term Treasury yield and the 10-year long-term Treasury yield have shown their first inversion since June 2007, strengthening market expectations of the US economy entering a recession. The growth rate of the US economy has initially declined since the second quarter of 2018, and the second-quarter annual growth rate of GDP in the second quarter of 2019 has dropped to two.1%, previous value is 3.1%.The US Markit Manufacturing PMI was 49 in August.9, which is the first time since September 2009 to fall below the Rongkuang line, and is expected to be 50.5, the former value is 50.4.Repeated Sino-U.S. Trade wars and intensifying expectations of the U.S. economic recession have increased the market’s expectations of the 北京夜网 Federal Reserve’s interest rate cuts again, avoiding dangerous sentiment, and pushing up gold and silver prices.The silver price entering the rising cycle will provide a strong guarantee for the company’s future performance. (III) Acquisition of projects such as Deyun Mining and Jinshan Mining Expansion and Construction have steadily advanced to become the focus of future performance. The company adheres to the target of acquiring at least one high-quality project per year set by the board of directors. In July this year, it completed the acquisition of 44% equity of Deyun Mining.Will continue to repurchase 7% -10% equity, and ultimately achieve absolute control.Deyun is currently working on exploration and exploration. The mine has abundant silver resources and high grades. The silver ore body contains 946 tons of silver-containing metal resources, with an average grade of 189 grams / ton, associated silver with 397 tons, and a grade of 35 grams / ton.After the completion of the acquisition, the company’s silver resource reserves will increase by about 1,300 tons, the total resources will be nearly replaced, and the annual selection and selection capacity will be nearly 200 millimeters, and the white banking leader will be further consolidated. At present, Jinshan is carrying out preparations for increasing the volume of extraction from 48 to 90 inches, and has obtained the environmental assessment approval. It is expected to be put into production in 2020. At the same time, the construction of the manganese sulfate monohydrate production line has completed project establishment, environmental assessment, stable assessment, and major equipment.The tendering and excavation of the equipment foundation of the plant are currently undergoing scale expansion. It is planned to complete the main body construction and equipment installation before the end of the year, and achieve single-machine commissioning of the equipment.After the project is completed and put into operation, Jinshan Mining will complete the effective extraction and utilization of silver, manganese, and gold, while expanding its industrial layout from non-ferrous metals to the chemical raw materials industry, which will serve as a basis for performance growth and resistance to cycle risks in the next two years.2019 is the first year that Jinshan Mining is injected into a listed company. The company promises that Jinshan Mining’s net profit for 2019 will not be less than 7,805.140,000 yuan, the net profit in 2019 and 2020 will not gradually decline2.300 million, based on the completion of the minimum profit value in 2019, the profit growth rate in 2020 will reach 94.87%.In addition, this year is Chifeng Jindu, the last year of Everbright ‘s performance commitment period. According to Sanhe Huaguan ‘s performance commitment, Everbright Mining and Chifeng Jindu ‘s 2019 replacement of non-recurring gains and losses and supplementary benefits from the funds raised from the matching funds are realizedThe net profit is not less than 1.2.3 billion and 8670.850,000 yuan, basically the same as 2018, supporting the company’s performance. In terms of prospecting and increasing reserves, Dongcheng Mining’s Bayanwura mining area acquired by Yindu Mining in 2017 gradually proved that the amount of silver metal exceeded 556 tons. The relevant prospecting and conversion process is currently underway. It is expected to be put into production by the end of 2020.Du 70 has the first production capacity.In 2018, Everbright Mining’s large-scale mining area added 74 new silver metals.68 tons, 7,411 lead metal.50 tons, zinc metal amount 5454 tons, average grade silver 553.18g / t, lead 5.49%, zinc 4.04%; the new amount of silver metal in Shidi Jindu Mining Area5.75 tons, the amount of lead metal is 763.98 tons, the amount of zinc metal is 1488.09 tons, with an average grade of 120 silver.36 g / ton, lead 1.61%, zinc 3.14%. New silver reserves accounted for 7 of the total reserves.5%, which plays a positive role in enhancing the company’s endogenous growth momentum, and each mine may even have more possibilities to explore and increase reserves in the future.At the same time, the company will extend to the metal material deep processing and resource recovery industry chain in the future, and gradually develop into technology-intensive, high value-added functional metals (new energy, etc.), metal target materials and other material fields and resource recovery development. 3.Investment advice The company’s strategic layout in the areas of internal expansion and expansion of existing mines, investment mergers and acquisitions, exploration and storage reserves is clear. Benefiting from increased risks of global economic growth and constant trade frictions, the risk aversion and expectations of the Federal Reserve’s interest rate cuts are gradually increasing.Large, favorable for the rise of the silver price center.The marginal increase in the price of precious metals and the expansion of the company’s production capacity will make the company’s future performance full of flexibility.The company’s EPS for 2019-2020 is expected to be 0.68/0.83 yuan, corresponding to the PE of 21x / 17x in 2019-2020, given a “recommended” rating. 4.Risk warnings 1) The prices of metals such as silver, zinc, lead, etc. have fallen sharply; 2) The Federal Reserve has resumed interest rate hikes and reduced schedules; 3) New projects have been put into operation less than expected.