Yunnan Copper (000878) 2018 Annual Report Comments: Asset Impairment and Expenses Drag Down Performance and Increase Focus on Core Business

Yunnan Copper (000878) 2018 Annual Report Comments: Asset Impairment and Expenses Drag Down Performance and Increase Focus on Core Business

Core point of view The company’s main business covers the entire industrial chain of copper business. Asset impairment and increased costs have dragged down the company’s 2018 performance.

The fixed increase was completed, and the funds raised were used to expand the copper ore resource reserves and layout smelting capacity, and continued to focus on the main business. In the future, new projects will be introduced and put into operation, and the company’s product output and profitability will continue to increase.

Give the company a PE estimate of 42 times in 2019, 杭州桑拿 corresponding to a target price of 14.

3 yuan, maintain “Buy” rating.

  Impaired assets and increased expenses have dragged down long-term performance.

In 2018, the company achieved operating income of 474.

30 ppm, a reduction of 16 per year.

80%; realized operating profit 6.

460,000 yuan, an increase of 34 in ten years.

43%; net profit attributable to mothers1.

25 trillion, a decrease of 46 a year.

04%.

Firstly: 1) Muding Haojiahe Copper Mine temporarily suspended production to accrue asset impairment reserves5.

380,000 yuan, an increase of 102 in ten years.

21%; 2) This fee is increased by 7.

300 million.

Among them, employee compensation and subsidiary suspension losses increase management costs.

1.3 billion US dollars, interest expenses and exchange losses increase financial costs.

3.8 billion.杭州夜生活网

  Focus on core business and reduce trade volume.

The company’s core business volume achieved steady growth in 2018, driving the company’s overall gross profit margin3.

7 averages to 7.
.

6%.

The output of high-purity tungsten copper reached a record high, reaching 68.

In 2002, the average annual CAGR of 2013-2018 was about 10%, and gross profit margin increased by 3.

Seven averages, reaching 5.

6%.

Production and sales of sulfuric acid, silver and other products and prices increased, further increasing the company’s net profit.

In addition, electrolytic copper sales volume was 76.

14 Initially, at least ten years 33.

09%, mainly due to the initiative to reduce trade volume.

  The fixed increase is completed, and the advantages of resources and scale are improved.

In 2018, the company will increase the net funds raised21.

US $ 0.4 billion will provide a good basis for the company to increase the self-sufficiency rate of copper concentrates, improve its business layout and enhance its smelting process advantages.

Specific uses: 1) Acquisition of Diqing Nonferrous 50.

01% equity will add 316 to the company’s new resource reserves.

90 is expected to increase the company’s reserves of more than 333 resources to reach about 519 thousand tons; 2) Used in Southeast Copper Copper Smelting Base Project, Yunnan Nonferrous Metals Co., Ltd. 10 crude copper / year, 30 tons sulfuric acid / year perfect project construction, put into productionLater, the company’s copper smelting scale will exceed 120 seconds / year, and it will be promoted to the forefront of the industry.
  Risk factors: Product price fluctuation risk, downstream demand is less than expected risk.
  Investment suggestion: The company’s main business covers the entire industrial chain of copper business. In the future, the new restructuring projects will be put into production, and the company’s product output and profitability are expected to further increase.

It is estimated that the company’s net profit attributable to its parent in 2019-2021 will be 5.

77/7.

90/9.

09 ppm (Originally, the net profit attributable to mothers was 5 in 2019/2020.

71/6.

72 ppm, according to the company’s future copper output growth and cost changes, forecasted), corresponding to EPS 0.

34/0.

46/0.

53 yuan, giving a PE estimate of 42 times in 2019, corresponding to a target price of 14.

3 yuan, maintain “Buy” rating.

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