Zijin Mining (601899): Rising overseas M & A costs and falling copper and zinc prices have dragged down first-quarter results. Mid- to long-term output growth and profitability have continued to improve.

Zijin Mining (601899): Rising overseas M & A costs and falling copper and zinc prices have dragged down first-quarter results. Mid- to long-term output growth and profitability have continued to improve.
In the first quarter of 2019, net profit of non-attributed mothers was deducted7.45 ‰, 29 years ago.14%, slightly lower than expected.The company achieved sales of 290 in the first quarter of 2019.420,000 yuan, an increase of 27 in ten years.02%; net profit attributable to mother 8.74 ‰, 19 years ago.43%, the corresponding return is 0.038 yuan; net profit after deduction is 7.45 ‰, 29 years ago.14%, slightly lower than expected. The increase in the output of mineral products brought by the mergers and acquisitions of overseas companies, the decline in copper and zinc prices, the rise in costs and the increase in expenses to a quarterly performance substitution.During the reporting period, the company’s sales of mineral gold were 9.16 tons, an increase of 23 in ten years.At 4%, the sales volume of copper from mines was zero.95 for the first time, growing 140 each year.6%, the mine produces copper 6.91% growth rate, sales increase by 26 every year.9%, the sales volume of zinc produced in the mine was 9.80 initially, 25 per year.In terms of price, in the first quarter of 2019, the average price of mineral gold was 272.6 yuan / gram, up 5 before.88%, the average price of mineral halogen copper is 43,298 yuan / ton, which decreases by 0 every year.69%, the price of mineral copper was 33,253 yuan / ton, down by 9 years.87%, the price of mineral zinc was 12,740 yuan / ton, down 21 for many years.34%.The sharp increase in the output of mineral products and the decline in prices as a whole have led to an increase in the income end27.02%.On the cost side, the higher cost of new mergers and acquisitions has pushed up the cost of tungsten copper and mineral zinc.Ultimately, the increase in costs 北京桑拿洗浴保健 and the increase in unit cost of sales have led to a decline in the gross profit margin of mineral zinc during the reporting period.62%, the gross profit margin of mineral halogen copper dropped by 4.94%, the gross profit margin of copper produced by mining fell 4.76%.In terms of other expenses, the selling expenses of new M & A companies increased even more.79%, management expenses increased 44.twenty one%.In terms of financial expenses, the exchange loss premium reduced financial expenses by 11 year-on-year.48%.In addition, due to hedging of price risks by smelting companies in the first quarter, fluctuations in profits and additional reductions1.8.4 billion. With the continuous increase in the output of mineral products of newly merged mining companies and consolidation companies, profits have been moderately dragged by rising costs in the short term.It is estimated that the mineral copper, zinc and gold in 2019 will be 35 ore, 38 ore and 40 tons, which will increase 41%, 37% and 10% each year. With the further investment of CITIC Metal in Ivanhoe Mining, the large-scale copper mine Camoa project will be smoothly advanced. It is expected to start production at the end of 2020. After the first phase of the project is fully operational, the company’s equity will be increased to 15%. Maintain profit forecast and maintain overweight rating!In terms of prices, we believe that the price of copper will continue to fluctuate at US $ 6,000-7,000 / ton over the next three years. The price of zinc will fall slightly due to the increase in supply and the price of gold will remain basically the same.We maintain 2019, 2020, and 2021 attributable net profit forecasts to mothers42.700 million, 49.300 million, 52.400 million, corresponding to PE17X / 16X / 14X.Considering that the company’s new acquisition of mining projects will bring continuous output increase and the company’s improved profitability of acquired projects after taking over, we believe that the company has always had a good endogenous growth and maintain an “overweight” rating.