Zhuye Group (600961): Completion of capacity relocation completes full line production to benefit high TC turns losses into profit in the second quarter

Incident capacity relocation 无锡桑拿网 and upgrade completed in June, the company achieved a net profit of 15 million yuan in the second half of the first half of the year, achieving operating income of 41.

8.8 billion, net profit attributable to mother-0.

3.4 billion US dollars, the budget is mainly due to the first quarter into the production trial production stage, the output of refined zinc continues to increase, the second quarter net profit 0.

1.5 billion yuan achieved quarterly profit.

In the first half of the year, the total output of zinc (containing zinc alloy) was 15, and the four series of electrolytic zinc production lines were successively put into operation. The production efficiency of stable operation was gradually improved. The daily output of precipitated zinc reached 850 tons, reaching 94% of the designed capacity.Achieving production and effectiveness was completed according to schedule.

Due to the excessive loss of assets and buildings due to relocation, the asset impairment loss in the first half of the year was 3007.

530,000 yuan, compared with 14 last year.

1 trillion, a decrease of 102.

13%. At this stage, the relocation has been successfully completed, and there is no related asset impairment for the time being.

Brief comment on the production of 5 tons of primary zinc in the first half of the year, long-term production target of 20 instead of net profit. The company gradually plans to produce 20 tons of primary refined zinc. It is estimated that the output of primary zinc is about 5 tons in the first half of the year, and the initial output is about 15 in the second half.All the income comes from the zinc production business.

Based on the average TC processing fee income of 7,800 yuan in 2019, the long-term sales gross profit is expected to be 500 million yuan.

As the company’s production capacity is relocated and upgraded, the process technology upgrade is automated, management personnel are reduced, payable staff budgets are reduced, and depreciation of fixed assets converted to held-for-sale assets in Qingshuitang production base is reduced.5,

690,000 yuan, down to 3.

1.9 billion, down 44% a year.

Initial net profit is expected to turn losses into profits and reach 1.

1 million tons benefited from a TC high zinc smelting single ton gross profit of 2,300 yuan. The release of performance was in line with expectations. Global zinc mines will focus on increasing production and resume production in the second half of 2018. Global zinc concentrate production will increase from January to May 20192.

7% to 526.

4Minimum wage, it is expected that the annual output of zinc concentrate will increase by 65 tons in 2019, an increase of about 5%.

However, zinc smelting has suffered from long-term low capital expenditure and pressure from environmental protection supervision. The marginal increase in production has resulted in an increase in zinc smelting capacity in 2019-2020, and an increase in the smelting gap has led to a ten-year high in processing fees.

Zinc concentrate TC processing fees continued to rise in 2019, from 7130 yuan at the beginning of the year to a high of 8344 yuan in the second quarter. The average price in the first half of the year was 7,800 yuan, reflecting the tightness of zinc smelting capacity and related production capacity in a high profit boom cycle.

The company produced 5 samples of primary zinc in the first half of the year, with a gross profit of 1.

At 1.6 billion yuan, the gross profit per ton is about 2320 yuan, which corresponds to the company’s smelting cash cost of 5480. The release of performance is in line with expectations.

Since the company was in the trial production stage after the relocation in the first quarter, the smelting cost per ton in the first half of the year was high. It is expected that the smelting cash cost after 6 months of stable production capacity can be reduced to 5,000 yuan.

The demand for zinc in industrial production has decreased, the commodity cycle has fallen, and the price of zinc has come under pressure. It is estimated that the average price of zinc TC will be 7,700 yuan in the second half of the year.

The company’s zinc production line has reached full capacity, and it can produce 15 initial native refined zinc in the second half of the year, with a profit margin of 4.

5.0 billion, net profit is about 1.

500 million, long-term net profit can be expected.

Profit forecast and investment recommendations The company’s capacity relocation and climbing production have been successfully completed. After reaching the second quarter of 2019, the company will benefit from the TC boom cycle to bring in profit elasticity, the new production capacity will increase the revenue, and the achievement performance will turn into profit, andBecome a domestic leading lead-zinc smelter.

After the company’s relocation, electricity bills dropped by zero.

07 yuan per ton, the overall expected drop is 58%, and staffing is reduced by 80%.

In 2019, the capacity of the zinc smelting industry will gradually increase, and processing fees will continue to rise, maintaining a sustainable high level after 2020.

It is recommended to pay attention to the investment opportunities brought by the recovery of the performance of the strain smelting group. After the new capacity is put into production after 2019 and gradually reaches the output, it will bring a transformation to the performance and bring the company a gross profit of 500 billion yuan.

100 million net profit.

We expect the company’s revenue from 2019 to 2021 to be 48.

300 million, 66.

3 ppm and 59.

5 ppm, a ten-year increase of -62.

8%, 37.
2% and -10.
2%; net profit attributable to mother 1.

100 million, 2.

400 million and 1.

7 ‰, 10-year growth of -107%, 117% and -29%; EPS is 0.

21 yuan, 0.

46 yuan and 0.

33 yuan.

Net assets are 0.

31 yuan, 0.

77 yuan and 1.

1 Yuan.

The corresponding PE from 2019 to 2021 is 40.

75 times, 18.

76 times and 26.

49 times, PB is 28.

29 times, 11.

28 times and 7.

91 times.

Taking into account the gradual increase in zinc processing fees, the company’s new production capacity has a leading edge, and the company is given an overweight rating. In 2019, it is estimated to be 45 times PE, with a 6-month target price of 9.

45 yuan.

Risk analysis Zinc prices gradually decrease in the short term, resulting in inventory price losses and may affect profits.

Contradictions in staffing are difficult to adjust and the government and the group fail to provide assistance, resulting in an increase in non-operating expenses and a decline in profits.

The commissioning progress of the new capacity starting equipment was less than expected, which led to the total production and operation plan dragged down by the stage output.