Shandong Gold (600547) semi-annual report comment: the price of gold rose in the second half

Shandong Gold (600547) semi-annual report comment: the price of gold rose in the second half

Matters: The company released its semi-annual report for 2019 and realized revenue of 311.

9.5 billion, an annual increase of 19.

89%, net profit attributable to shareholders of listed companies6.

$ 6.5 billion, an annual increase of 8.

58%, EPS 0 diluted based on latest equity.

21 yuan, performance in line with expectations.

Ping An’s point of view: The growth of gold price is limited, and the company’s performance is stable: the company’s consolidated product is mineral gold. In the first half of 2019, the company’s production was basically stable, and the output of mineral gold was 20.

51 tons, an increase of about 6% a year.

In terms of gold prices, the price of gold fluctuated from the beginning of the year to the end of May. However, the trade friction between China and the United States escalated at the end of May, and the price of gold began to rise. By the end of June, it was about 10% higher than the beginning of the year.

Since the rise in gold prices in the first half of the year mainly occurred in June, the statements in the first half of the year were limited, so the increase in gold prices did not fully reflect the company’s first half performance, and the company’s performance was relatively stable.

Gold prices are expected to continue to grow in the future, and the company’s performance in the second half of the year is worth looking forward to: increasing uncertainties in global economic growth, continued decline in the U.S. PMI index, and the possibility of further interest rate cuts by the Fed in the future;Demand is still relatively strong.

We judge that the price of gold will continue to grow higher in the future.

Considering that from June to the end of August 2019, the price of gold will increase by more than 20%. The increase in the price of gold will be reflected in the company’s performance in the second half of the year, and the company’s performance in the second half of the year is expected to maintain growth.

The company’s gold reserves and output are at the forefront of the industry, and the beneficiary gold price has risen to a high degree: the company is a leading gold company in China and has approximately 968 tons of equity gold resources by the end of 2018.

The company is also the largest company among the listed gold companies, and gold accounts for more than 90% of its revenue and profits. Other business disruptions replace it, and it is a pure gold stock.

The price of gold will rise in the future, and the company will benefit a lot.

Profit forecast and investment rating: Based on the gold price judgment, we raise the company’s profit forecast. Is the company expected to be in 2019?
In 2021, the EPS will be 0.

65, 1.

07 and 1.

22 yuan (the original value is 0.

50/0.

55/0.

63 yuan), corresponding to the closing price of PE on August 29, 2019 is 62, 38 and 33 times, optimistic about the price trend of gold and the company’s performance flexibility, maintain the “recommended” investment rating.

Risk reminders: (1) Risk of product price fluctuations.

Gold is the company’s main product, and the price of gold determines the company’s profitability to a certain extent.

Affected by the world economy, politics, demand and other factors, the uncertainty of the gold price is increasing. Changes in the price of gold will lead to uncertainty in the company’s operating performance. If the price of gold declines, the company’s operating performance will be affected.
(2) Risk of resource development.

The company’s mines have gradually reduced the amount of mineral resources caused by the continuous mining, and the resources of some mines continue to be tight. In order to ensure production, 杭州桑拿 the company has begun mining licenses for related mineral rights.

The state’s control and approval procedures for the processing of warrants for mining production companies are becoming more and more stringent. If there is a delay in the approval process for mining rights, it may affect the company’s gold production and operating performance.

(3) Risks of mine safety in production and environmental pollution.

Mining is an industry with high safety risks. If a safety accident occurs, it will cause personal injury or property loss, which will directly affect the company’s gold production, income and corporate image.

During the mining of gold, impurities will be produced during the production process. If there are problems with environmental protection measures, the harmful substances in the replacement will cause pollution to the mining area and the surrounding environment.

If environmental pollution occurs, it will affect the normal operation of the company’s production and operation.