Zijin Mining (601899): Q2 performance growth is in line with expectations Q3 performance is expected to exceed expectations

Zijin Mining (601899): Q2 performance growth is in line with expectations Q3 performance is expected to exceed expectations
The company released the semi-annual report for 2019: 2019H, and the company realized operating 杭州夜生活网 income of 671.98 ppm, an increase of 34 in ten years.90%; net profit attributable to mother 18.5.3 billion, previous interest rate 26.64%; realized non-net profit attributable to mothers16.570,000 yuan, an average of 30 for ten years.28%; of which, in Q2 2019, the company realized operating income of 381.56 ppm, an increase of 41 in ten years.58%, up 31 from the previous quarter.38%; realized net profit attributable to mother 9.79 trillion, an average of 32 in ten years.07%, an increase of 11.95%; realized non-net profit attributable to mothers and mothers 9.12 ‰, 31 years ago.18%, an increase of 22 from the previous month.47%, the performance is in line with market expectations. We believe that the QoQ change of Q2 2019 is mainly affected by 4 aspects: 1) Q2 2019, the company’s quarterly gross profit increased 3 QoQ.1% to 38.35 ppm, while the gross profit margin decreased slightly.8 up to 10.1%, mainly due to Q2 products other than the main business and internal replacement gross profit or an increase of about 500 million US dollars to improve and improve performance, while the main product Q2 gross profit improved.2) In the second quarter of 2019, the prices of mineral copper / gold / zinc / iron concentrates increased by -6 from the previous month.02% / 1.72% /-18.6% / 8.27%, sales volume also increased by 12 respectively.21% / 0.17% /-4.44% /-9.87%, leading to a 3% increase in the gross profit of copper / gold / zinc / iron concentrates from the previous month.09% /-0.92% /-50.10% / 14.23%, accounting for 34.4% / 24.2% / 14.3% / 10.At 6%, the gross profit share of iron concentrates increased significantly in the context of increasing costs and rising prices, while zinc production from mines increased in the context of falling volume + spreads + rising costs.2) Expense end: 2019H, sales expenses, management expenses and financial expenses increase by 46 respectively.2% / 36.9% / 28.84%. The increase in sales and management expenses was mainly due to the scope of mergers and acquisitions of new mergers and acquisitions. Part of the expenses are expected to be one-off expenditure subjects. The increase in financial expenses and the increase in the asset-liability ratio led to an increase in expenditure3.9.4 billion.However, in the second quarter of 2019, the benefit of foreign exchange losses brought about by the depreciation of the RMB led to a significant improvement in financial expenses.3) The amount of non-recurring profits and impairment losses in the second quarter of 2019 are very close, and the second quarter results may reflect operating profits; 4) The company’s main performance was significantly improved from the previous month, resulting in a decrease in subsidiaries and other reasonsYields continued to improve; but with the expansion of production and consolidation of non-wholly owned subsidiary projects of Kolwezi, Bisha copper-zinc mine and RTB, the volume of minority equity may further increase in the future.We believe that Q2 involves a short-term increase in some of the costs brought about by the merger of new mergers and acquisitions. RTB and Bisha copper and zinc mines are still at the initial stage of cost reduction in new mergers and acquisitions.It is expected that the gross profit of mineral gold will increase significantly in the third quarter, and future performance is expected to continue to improve. Earnings forecast and grade: The company will slightly reduce its net profit attributable to mothers from 2019 to 2021 by 47.4,56.1. 81.90,000 yuan, without considering the effect of the diluted share capital after the additional issue, corresponding to EPS 0.21, 0.24, 0.36 yuan, corresponding to PE 18 on August 29, 2019.0X, 15.2X, 10.4 times.With the release of multiple copper ore production capacity in the future, the price of gold has soared, and performance is expected to improve significantly. Risk reminder: economic recovery is slower than expected, trade war risks, own project is not progressing as expected, etc.