Tongling Nonferrous (000630) Interim Review: Downward processing fees dragged down second-quarter results.

Tongling Nonferrous Metals (000630) Interim Review: Downward processing fees dragged down second-quarter results The company ‘s overall performance was in line with expectations
Core point of view The company’s second-quarter earnings narrowed. The overall performance was in line with expectations: Recently, Tongling Nonferrous Metals released the 2019 semi-annual report, and the company achieved revenue of 468 in the first half of the year.59 ppm, an increase of 15 in ten years.09%; net profit attributable to mother 4.1.4 billion, an annual increase of 0.18%; net profit after deduction to mother 3.39 ‰, an average of 12 in ten years.02%.Q2 revenue was 236.83 ppm, a ten-year increase3.02%; net profit attributable to mother 1.34 ‰, 36 years average.85%; the company’s Q2 profit has narrowed compared to Q1, but the overall performance is in line with market expectations. The main production and sales continued to increase and the decline in processing fees dragged down the gross profit margin: the company produced a total of 70 copper halide in the first half of the year.76 for the first time, growing 8 per year.84%; copper content of copper concentrate 2.73 for the first time, growing by 4 per year.2%; copper processing material 17.31 for the first time, growing by 4 per year.85%; sulfuric acid 214.52 Initially, it grows 8 per year.twenty four%.Although the production and sales of products continue to increase, due to the decline in TC / RC costs of copper processing and the drop in sulfuric acid prices, the company’s comprehensive gross profit margin will increase from 5.37% dropped to 4.2%, resulting in a substantial narrowing of earnings in the second quarter.At present, the price of sulfuric acid is in a downward trend, and there is limited room for decline. However, the copper processing fee is affected by the mismatch between the growth rate of the copper supply side and the smelting side.Toxicity, the future may recover through copper downstream consumption 苏州夜网论坛 recovery.On the whole, the company’s gross profit margin will have limited downside in the second half of the year, and the combined new production capacity will gradually expand. The company is expected to supplement the price by volume to drive performance growth. The future 5G copper foil with high-end lithium battery copper foil production capacity is expected to become a new growth point: Company 2 has completed the first phase (1 ton) of the ultra-thin electronic copper foil project for advanced energy storage, and has been gradually delivered.A 2 ton high-purity metal rhenium production line has also been in trial production in the middle of the year, trying to promote the company’s performance growth.At present, the company has 4 initial copper foil production capacity, including 2 standard foils.25 inches, lithium battery 杭州桑拿网 copper foil 1.75 millimeters, technically 6 micron and 7 micron lithium foils have been mass-produced. At present, research and development of high-end copper strips and 5G copper foil products is being promoted, and it is expected to become a new performance growth point in the future. Investment suggestion: We expect the company’s EPS for 2019-2021 to be 0.07 yuan / 0.09 yuan / 0.10 yuan, the corresponding PE is 30.27/25.99/22.88 times, maintaining the “recommended” level. Risk warning: Copper processing fees fall, sulfuric acid prices fall, project advances are less than expected