Shandong Gold (600547): Depressed earnings as expected, low gold prices and M & A financing fees weigh on results

Event: The company released its 2018 annual report and achieved operating income of 547.

9 trillion, a ten-year growth of 7.

34%, realizing net profit attributable to mother 8.

76 ‰, a decrease of 23 per year.

01%, realized deduction of non-net profit 8.

870,000 yuan, a decrease of 22 a year.


  The downturn in gold prices and M & A financing costs dragged down performance.

The decrease in company profits in 2018 compared to the previous year was mainly due to factors such as the decline in gold prices and the increase in financing costs for the acquisition of Belladero Gold Mine. Among them, the Hong Kong company headquarters in the first half of 2018 generated interest on M & A loans for the acquisition of the Argentina Belladero Gold MineAnd related costs 1.

3.3 billion US dollars, because there is no corresponding income deduction, resulting in increased profitability of consolidated statement income, net profit attributable to the mother decreased.

However, the listing of the H shares of the reorganized company is completed and the repayment of the bridge loan is completed. This cost will no longer exist and the financial burden will be eased.

  Internally and externally, gold production grows endogenously.

The company’s gold production totaled 35 in 2018.

88 tons, boosting ten-year growth in operating income.

Looking 杭州夜网 forward to 2019 and 2020, the company’s gold production will usher in endogenous growth. The main incremental steps are the gradual optimization and upgrading of the Sanshandao gold mining system and the expansion projects of Jiaojia Gold Mine, Xincheng Gold Mine, and Qingdao Gold Mine.

According to the production and operation targets disclosed by the company, we expect the company’s gold output in 2019 and 2020 to be 45 tons and 50 tons, respectively.

  U.S. Treasury interest rates are upside down again, and the Fed ‘s rate cut is expected to increase sharply.

In the past ten years, the yield on U.S. Treasury bonds and the three-month U.S. Treasury bonds have reversed. The reason is that the euro zone PMI has been significantly lower than expected, maintaining the previous downward trend.

Throughout history, the 杭州夜网 inverted yield curve often accompanied the Fed to stop raising interest rates and began to cut interest rates half a year later. At present, the United States has stopped raising interest rates in 2019. It is likely that we will see the Fed adopt interest rate reduction measures to hedge the world.Risks from economic growth.

The current interest rate cut expectations have not been fully reflected in the gold price, and we believe that the current growth trend of precious metals has become more obvious.

  Profit forecast and rating.

As a leading domestic precious metal company, the company has a competitive advantage with large resource reserves and outstanding cost advantages. At the same time, it transfers the endogenous growth of the company’s gold output and the growth of the gold price. The company’s product volume and price have risen simultaneously, maintaining the company’s buy rating.

The company’s EPS is expected to be 0 in 2019-2021.

81 yuan, 1.

24 yuan, 1.

62 yuan, corresponding to the current sustainable PE is 29.

1 time, 25.

6 times, 19.

5 times.

  Risk Warning: The production and sales of gold are lower than expected; the risk of falling gold prices.