Author|Ding Zhenyu, Editor|Gu Jinfeng
Source: Jufeng Investment Advisory, Good Stock Application
Jufeng Investment Advisor's latest column "Leading Analysis" was officially launched. There will always be a sector or concept in the A-share market to lead the market to rise during the stage time, and this column will focus on the stocks with the highest popularity or the most consecutive stocks in the current market for analysis, with the aim of screening out the value investment targets with "real materials" from the hot spots.
- Rising gold and copper prices pushed stock prices to record highs
On March 29, the share price of Zijin Mining, the "king of mines", hit a record high of 16.87 yuan, and the stock price has risen by more than 40% since 2024, with a market value of more than 430 billion, becoming the absolute leader of the current A-share nonferrous metals industry. The main logic behind the rise in stock prices is that the Federal Reserve will enter a cycle of interest rate cuts in 2024, and the rise in gold and copper prices will drive stock prices rapidly amid rising expectations of easing global liquidity.
- How thick is the company's foundation?
Zijin Mining is a large-scale multinational mining group, mainly engaged in the exploration, development and mining engineering research, design and application of copper, gold, zinc, lithium, silver, molybdenum and other metal mineral resources on a global scale. In the annual profit of 2023, copper concentrate from mines accounted for 40.64%, which is the company's largest source of profit, followed by gold from mines accounting for 26.33% of profits. In the 2023 annual report, the company disclosed the latest production and future production plans, which are as follows:
The company's production plan for 2023 and 2024-2025
In 2023, Zijin Mining will produce 1.007 million tons of copper in minerals, a year-on-year increase of 11.13% (906,000 tons in 2022), achieving a historic breakthrough, becoming the only mining enterprise in China and Asia with a copper output of more than one million tons, ranking among the top five in the world, mining 67.7 tons of gold, up 20.17% year-on-year (56.4 tons in 2022), ranking first among major listed mining companies in China and Asia and among the top 10 in the world in terms of gold resources and production capacity. With more than 15% gold, it is the only company among the world's top 15 mining companies to meet its production guidance for three consecutive years in terms of actual copper production. It is also the most recent growth mining enterprise in the A-share market. So how thick is the company's current family base? Can it support the company's market value of more than 400 billion? Pay attention to Jufeng Investment Advisor (jfinfo)/good stock application, and the analysis and research report of the leading target of "institutional research and selection" is waiting for you to get!
As of the end of 2023, the company's resources and reserves are as follows
Source: Company's 2023 annual report
Data source: 2022 annual reports of listed companies
The company's main mineral copper and gold resources and production capacity rank among the top 10 in China and the world, with copper resources of about 75 million tons and gold of about 3,000 tons. With more than 13 million tons of equivalent lithium carbonate (second only to Tianqi Lithium and Ganfeng Lithium among domestic rivals), 3 million tons of molybdenum and 15,000 tons of silver resources, relying on the company's independent technology and engineering capabilities, it is expected to become one of the world's most important lithium, molybdenum and silver producers in the next five years. The company's mineral zinc output ranks first in China and fourth in the world all year round.
- Where is the end of the stock price in the future?
In the company's research report on March 26, 2024, Huafu Securities put the company together with the global copper leader Freeport McMoRan (the current market value of the US stock market is 485.2 billion yuan) and the domestic copper giant Southern Copper, and made a valuation and value analysis from the perspective of PB and PE, and believed that Zijin Mining's PE is still far below the average. At present, Zijin Mining is far undervalued, and it is expected to enjoy valuation repair in the future during the copper price boom cycle. The agency expects the company's net profit attributable to the parent company from 2024 to 2025 to be 24.5/29.3 billion yuan respectively, and the corresponding EPS will be 0.80/0.93/1.11 yuan per share. According to the company's closing price of 16.82 yuan on March 28, 2024, the corresponding PE in 23-25 years is 18/15 times, and the valuation is lower than the industry average. Referring to comparable companies, the company is given a PE valuation of 22 times, corresponding to a target price of 20.5 yuan in 2024.
(Author: Ding Zhenyu Practicing Certificate: A0680613040001)
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