Shengda Mining (000603): Silver Leading Reserve Continues to Advance
Event: Recently, Shengda Mining released its 2019 Interim Report, and the company achieved operating income in the first half of 201911.5.7 billion, an increase of 30 every year.88%; net profit attributable to shareholders of the parent company2.12 ‰, an increase of 9 per year.03%; realized basic income of 0.3076 yuan, an increase of 9 every year.00%. Opinion: The performance is stable, and we look forward to the potential release.According to the number of reports, the company’s operating performance maintained a steady upward trend, and its subsidiary mining subsidiaries increased to 6.Among them, there are 4 mines in production, including the Bayendaba silver polymetallic mine belonging to Yindu Mining, the Xinbaruyou Banner Eren Tolegai silver mine belonging to Jinshan Mining, and Everbright Mining, which is owned by KashkertenQi Dadi, Shidi silver-lead-zinc mine.Two mines that have not yet been put into operation include the silver polymetallic ore in the Bayanwula mining area owned by Dongsheng Mining and the lead-zinc polymetallic ore in the Bayanbaoleg area owned by Deyun Mining.With the successive commissioning of the mines, the company’s performance has room for improvement. Silver reserves have further increased.In July 2019, the company completed the acquisition of 44% equity of Deyun Mining, and the conversion continued to acquire another 7% -10% equity with the related party power grid, eventually achieving absolute control.The holder of Deyun Mining’s Bayanbaoleg District Silver Polymetallic Mine has rich reserves and high-grade silver resources. The silver ore body contains 946 tons of silver metal resources, with an average grade of 189 grams / ton, and associated silver with 397 tons.Grade 35 g / ton.Currently, Deyun Mining is conducting preliminary exploration and mining related work.After the completion of the acquisition, the company’s silver resource reserves are close to being measured. It is to be renamed as “Shengda Resources”, and the industrial chain will extend downward.At the beginning of 2019, according to the company’s business status and industry development trends, the company’s board of directors determined the development strategy of “primary mineral resources + urban mine resources”, will continue to rely on mining, and further develop downstream in the industrial chain, and is committed to making the company influentialPowerful metal resource provider.According to this, the company intends to change the name from “Shengda Mining Co., Ltd.” to “Shengda Metal Resources Co., Ltd.” and the abbreviation of securities from “Shengda Mining” to “Shengda Resources”. Optimistic about the later silver trend, the price of lead and zinc is not optimistic.Judging from the gold-silver ratio, the current gold-silver ratio is about 83, which is higher than the historical average of 60, which means that silver is undervalued relative to gold.Although the global economic downturn will affect the industrial demand for silver, since gold and silver are both precious metals, the expected increase in gold prices will lead to the simultaneous growth of silver prices.ILZSG estimates that the global refined zinc surplus in 2019 will be about 11.9 Initially, the supply-demand gap narrowed compared to 201839.2 announcement; excess global refined lead market 6.9 is the earliest and will reverse the excess given since 2017.The narrowing of the supply and demand gap for lead and zinc will put pressure on prices. Earnings forecast and rating: Based on the company’s existing share capital, we expect the company’s total diluted earnings for 2019-2021 to be 0 respectively.65 yuan, 0.71 yuan, 0.75 yuan, calculated based on the closing price of 2019-08-29, the corresponding PE is 25 times, 23 times, 22 times, maintaining the “overweight” level. Risk factors: Global mines resume 北京夜网 production. Mine production is below expectations, and smelter construction progress is below expectations.