Shandong Gold (600547): Net profit attributable to mother slightly exceeds expectations in the first quarter of 2019, bullish on medium-term growth of gold price and upgrade to buy

In Q1 2019, net profit attributable to shareholders of listed companies increased.

47%, slightly more than expected.

In Q1 2019, the company achieved an operating income of 106.

21 ppm, a decrease of 25 per year.

03%; realize net profit attributable to shareholders of listed companies.

6.6 billion yuan, realized non-net profit attributable to mothers3.

65 ppm, a ten-year increase4.

07%, corresponding to the deduction of unexpected income 0.

17 yuan, slightly more than expected.

Significantly reduce the production ratio 杭州夜网论坛 of outsourced quality gold and small gold bars, reduce income and increase profits, and increase the expense ratio.

Reporting on the baseline, the average SHFE gold price is 286.

52 yuan / gram, an increase of 3 over the same period in 2018.

87%; in addition to the improvement in gross profit margin brought by price improvement, the company also purchased qualified gold smelting / small bar production by reducing the business scope of ultra-low gross profit margin (the 2018 annual report showed that the business gross profit margin was 0 respectively.

17% and 0.

14%) achieved a reduction in revenue and profits, so the company’s comprehensive gross profit margin increased by 3 in Q1 2019.

86 up to 12.

4%, this gross profit level hit a new high of nearly 10 years.

In addition, the company’s increase in Q1’s expense ratio in 2019 offset part of the improvement in gross profit margin, mainly due to sales taxes and surcharges (increased export duties on Hong Kong companies’ sales of Argentine gold mines), management expenses and financial expenses as a proportion of total sales revenue.1.

The 64 averages eventually dragged down the increase in net profit of Guimu to the extent of increase in gross profit.

The domestic gold mine output is steadily expanding, and further expansion is expected in the future.

In terms of mineral gold production, the company’s Sanshan Island and Jiaojia mine reconstruction and expansion projects have been put into production in 2019. According to our calculations, the company’s mineral gold output in the first quarter was close to 10 tons. Compared with the first quarter of 2018, the production of self-produced mineral gold increased by about0.

4 tons, of which domestic mining gold output in 2019Q1 is about 7.

75 tons, the output abroad (Argentino Belladero Gold Mine) is about 2.

18 tons.

In terms of cost, the overall selection of domestic mineral gold has remained stable, while foreign countries are mining in low-grade mineral veins, the grade has declined marginally, and additional taxes and fees are added. It is expected that the overall overseas mineral gold cost will increase by 20-30 in 2019. Yuan / gram; according to the announcement of Barrick Gold, the estimated mining cost of the Beladero gold mine in Argentina in 2019 is approximately 1150-1250 USD / GBP.

In addition, we expect that by the end of 2020, the company hopes to achieve the goal of producing 50 tons of self-produced mineral gold. Based on the current output, further outbound mergers and acquisitions can be expected.

Optimistic about the mid-term growth of gold price, maintain profit forecast, and upgrade to “Buy” rating!

We believe that the current inventory level in the United States is high, and the private sector is shifting from passive inventory replenishment to active destocking. Consumption and fixed asset investment are still weak, and the layout that drives down the price of gold is determined.

We estimate that the average SHFE gold price for 2019-2021 will be 310/315/306 yuan / g; the size of the company, with the increase in self-produced gold, it is expected that the outsourcing gold smelting business with low gross profit margin will continue to shrink, and net profit is expected to reach quarter-on-quarterFurther growth, therefore we maintain the company’s net profit forecast for 2019-2021.



40,000 yuan, corresponding to the current sustainable dynamic PE is 31X / 28X / 25X.

We believe that the market will tend to be weak in the future, and stagflation will gradually become clear. Gold stocks will significantly outperform the market by more than 20%, so we upgrade our rating to buy!