Shengda Mining (000603): Rising silver prices support the company’s performance, Desheng exploration, Dongsheng exploration mining and Jinshan expansion projects promote development

Shengda Mining (000603): Rising silver prices support the company’s performance, Desheng exploration, Dongsheng exploration mining and Jinshan expansion projects promote development
Core points: 1.Inc.’s operating income for the first three quarters of 201919.57 ppm, an increase of ten years.46%, net of non-attributed net profit2.530,000 yuan, an increase of 10 in ten years.73%; realized profit of 0.49 yuan.Among them, the company achieved operating income of 800 million in the single quarter of 2019Q3, a year-on-year decrease of 23.45%;29 ppm, an increase 深圳桑拿网 of 17 in ten years.06%.  2.Our Analysis and Judgment (1) The rise in silver prices supported the company ‘s performance during the reporting period. The global economic resonance continued to decline. The Sino-US trade war continued to be repeatedly affected. The market risk appetite declined. Countries led by the US Federal Reserve continued to start interest rate cuts, driving gold pricesRose, and silver prices also followed the rise in gold prices in the third quarter.  In the first three quarters of 2019, the average spot price of silver at Shanghai Gold Exchange was 3,772 yuan / kg, which gradually increased4.03%, of which 2019Q3 silver price from 3547.65 yuan / yen rose to 4,110.40 yuan / kg, up 15 before.90%, up 15 from the previous month.86%.Affected by the economic outlook and sluggish demand, the average price of the zinc ingot market in the first three quarters of 合肥夜网 2019 was 20,855 yuan / ton, down 13 each year.01%; the average market price of lead ingot was 16,822 yuan / ton, a continuous decline of 12.31%.Rising silver prices have supported the company’s performance growth.  In addition, after the company’s Chifeng Jindu Mining 30 was inserted into the concentrator and put into operation, it helped the company to further release silver capacity and support the company’s performance growth.  (2) The downward trend of the global economy is becoming more and more obvious, and the upward trend in silver prices is basically affected by the Sino-U.S. Trade war and the preliminary agreement on Brexit.However, from a secondary school perspective, the downward trend of the global economic resonance is obvious.US manufacturing PMI was 49 in August and September.1,47.8. It has been reduced for 6 consecutive months, and it has been dry for more than 2 consecutive months. The salary level of the non-agricultural employment report in the United States in September has changed, which is still an unfavorable factor that affects economic operation and interest rate cuts. In September, the pillar of the US economy, retailFirst launch in 7 months.The market is mainly worried that the global economic downturn has dragged on the US manufacturing industry and gradually affected wage levels, while boots affect US consumer spending and ultimately affect the US economy.In addition, the EU manufacturing PMI data has exceeded the dry line for eight consecutive months and is close to the recession line.We believe that after the transition to the Sino-US trade war mitigation and other negative factors, the initial Brexit agreement did not pass the internal parliament through re-interconnection deadlock. At the same time, changing the global economy, especially the US economic data, will improve the market for the Federal Reserve and other globalThe expectation of increased monetary easing, the global economic growth trend represented by the United States and Europe is growing significantly, nationals of the countries headed by the Federal Reserve have cut interest rates, and counter-cyclically adjusted the economy. The Federal Reserve has cut interest rates twice in 2019.According to FEDWATCH data, there is a nearly 90% probability that a third interest rate cut will be made during the year, and the euro exchange rate will restart QE in November.World Gold Association data In September, the global gold ETF and similar products had a net inflow of US $ 3.9 billion in August, and total gold holdings increased by 75.2 tons, a record high of 2,808 tons, at the same time the net purchase of gold in each period continued to increase.  The gradual entry of countries around the world into the new currency easing cycle will significantly reduce the nominal yields and real yields of low-country government bonds. The reduction in real interest rates and the growing demand for gold will eventually push up the price of gold, and the repair of the gold-silver ratio will be sustainable.The price of silver followed.  (3) Deyun, Dongsheng Mining Prospecting and Picking and Jinshan’s Expansion and Construction Projects Promoted to Become Highlights of Future Performance The company adheres to the target set by the Board of Directors for the acquisition of at least one high-quality project each year, with a year of July this year.090000 yuan completed the acquisition of 44% equity of Deyun Mining. In September, the company transferred its 10% equity of Tianshan Mining with its own capital of 25 million yuan, and finally achieved an absolute control of Deyun with 54% of the shares.Deyun is currently engaged in exploration and mining related work. The mine has rich and high-grade silver resources. The silver ore body contains 946 tons of silver-containing metal resources, with an average grade of 189 grams / ton, associated silver with 397 tons, and a grade of 35 grams / ton.The average grade of symbiotic lead is 1.88g / t, average zinc grade 2.10g / t; average grade of zinc ore body 2.75g / t, associated lead grade is 0.37g / t.The company’s silver resource reserves increased by about 1,353 tons, and the total resources were close to the index. The annual selection and selection capacity was nearly 200 pieces, and the company’s position as the leading bank in the white banking industry will be further consolidated.  3.Investment suggestion The company has a clear strategic direction in the endogenous extension of existing silver capitals, gold capitals, Everbright, Jinshan, and Deyun Mining, investment mergers and acquisitions, exploration and storage enhancement, and benefits from the increased risk of global economic recessionThe rising risk aversion is positive for the rise of the silver price center.Rising silver prices combined with the expansion of the company’s production capacity enhance the company’s future performance flexibility.The company’s EPS for 2019-2020 is expected to be 0.63/0.73 yuan, corresponding to the PE of 21x / 18x in 2019-2020, given a “recommended” rating.  4.Risk warnings 1) The prices of silver, zinc, lead and other metals have fallen sharply; 2) The Fed’s interest rate cuts have been less than expected; 3) New projects have been put into operation less than expected.