Luoyang molybdenum industry started with molybdenum and tungsten production, gradually expanded the upstream development of copper, cobalt, gold, niobium, phosphorus and other metals and resources, extended energy metal materials and mining trade, and realized the platform layout of multi-variety resources and trade through international expansion. The company has four major production bases worldwide: molybdenum and tungsten in China, copper and cobalt in Congo, copper and gold in Australia and niobium and phosphorus in Brazil. at present, it has developed into the world's largest producer of scheelite, the second largest producer of cobalt and niobium, the top seven producers of molybdenum, the leading producer of copper and the second largest producer of phosphate fertilizer in Brazil. Participate in and strengthen the Indonesian nickel-cobalt project in 2019, taking a key step into the field of new energy. By building a unique and diversified product portfolio, we can maximize the benefits of the price cycle.
Counter-cyclical layout of multi-variety, global resources, to create the world's leading commodity suppliers. Counter-cyclical acquisition of two world-class high-quality copper and cobalt mines in Africa, Congo (80 per cent owned by Kim) TFM () and KFM (95 per cent). After the mixed ore project is put into production in 2023, it is estimated that the total production capacity of TFM cathode copper and cobalt hydroxide will reach 470000 tons and 43000 tons respectively, ranking among the first echelon of global copper and cobalt resources. Brazil niobium phosphorus as a "ballast stone" reserve force continues to store energy; Australian copper and gold mines sign China's first $550 million metal flow agreement to realize part of the company's value in advance; three major molybdenum and tungsten associated ores continue to contribute, technical precipitation accumulates and rises abruptly.
The "mining + trade" model helps the company to globalize its international mining positioning and create new profit growth points. IXM is the third largest trading company in the world, with diversified trading, logistics and mining investment businesses as well as a global spot trading network for metal periods. IXM has been responsible for the external sales of all copper and cobalt produced by TFM, total niobium production in Brazil and some copper production produced by NPM, and is deeply involved in resource integration at many other levels of the company, realizing closed-loop production and marketing, expanding business and further improving profitability stability. Considering the total spot business scale, the net profit of 2019-2021H1 IXM reaches 270 million, 770 million and 370 million yuan, creating a new profit growth point for the company.
For the fine management of overseas high-quality mining enterprises to "reduce costs and increase efficiency", ESG rating ranks among the industry leaders. In the process of rapid international expansion, the company aims to modernize the management concept of overseas mining enterprises, set up the "5233" management concept, formulate a three-year cost reduction and efficiency plan, promote the application of modern technology, and realize "cost reduction and efficiency" in an all-round way. In 2020 and 2021H1, the capital reduction will be achieved by US $500 million and US $363 million respectively. In the 2021MSCI evaluation, the company's ESG rating was upgraded to "A", in line with Rio Tinto and BHP Billiton, helping the company break through the "shackles" of the traditional mine-side concept and move towards a new era of international mining resources enterprises.
Investment suggestion: we expect the company's return net profit from 2021 to 2023 to be 50.72,62.52 and 7.403 billion yuan respectively, corresponding to PE 24.4,19.8,16.7 times and PB 2.8,2.5,2.2 times respectively. We believe that the company can maximize the return of price cycle rotation by building a unique and diversified product portfolio through counter-cyclical international acquisitions. The TFM and KFM copper and cobalt mines in the Democratic Republic of the Congo in Africa have established the company's first place in the world in terms of cobalt resources. With regard to the management model of overseas high-quality mining enterprises, the effect of "reducing costs and increasing efficiency" is remarkable. ESG rating leads the domestic mining industry, giving a "buy" rating for the first time.
Risk tips: metal price volatility risk, overseas asset operation risk, political and policy risk.
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