[semi-annual report] Zinc upstream enterprises were completely frustrated by the epidemic in the first half of the year. Luoping Zinc Power's net profit plummeted by 2156.17%.

SMM9 March 10: the epidemic broke out in mid-late January and gradually spread around the world. Shanghai zinc began to plummet after the Spring Festival, with an intraday low of 14245 yuan / ton, refreshing its lowest level since 2016. Due to the low price of zinc, the performance of enterprises is generally affected. From the zinc upstream enterprises known to SMM, only Zijin Mining increased its operating income and net profit compared with the same period last year, while the net profit of other companies decreased year-on-year, of which Luoping Zinc Power dropped the most, and the net profit belonging to shareholders of listed companies plummeted by 2156.17% in the first half of the year.

Luoping zinc electricity

The net profit of Luoping Zinc Electric belonging to listed shareholders in the first half of the year was-152 million yuan, down 2156.17% from the same period last year. The main reason is that affected by novel coronavirus's epidemic situation, the global economy has declined, and the sales price of zinc products has dropped sharply compared with the same period last year, coupled with a sharp reduction in processing fees deducted from raw material procurement over the same period last year, resulting in an increase in raw material procurement costs. as a result, the gross profit margin of zinc products has dropped substantially, on the other hand, the loss of bad debts on the basis of aging analysis of the company's final receivables has increased slightly.

From January to June 2020, the company completed a total output of 32736.69 tons of zinc water, zinc ingots and zinc alloys, including 4307.857 tons of zinc ingots, 13743.58 tons of zinc water and 14685.253 tons of zinc alloy.

HTC shares

In the first half of the year, the net profit of HTC shares belonging to shareholders of listed companies was-74 million yuan, a year-on-year drop of 212%. This is mainly due to the lack of downstream demand in the company's non-ferrous base affected by the novel coronavirus epidemic and the downward macroeconomic situation at home and abroad, and a sharp drop in the price of zinc products. the operating rate of upstream mining enterprises is low, the supply of raw materials for main products of zinc products is in short supply, the production equipment runs under low load, and the production and sales volume decreases.

Guocheng Mining Industry

During the reporting period, the company realized operating income of 477 million yuan, down 14.58% from the same period last year, and realized a net profit of 48.9416 million yuan belonging to shareholders of listed companies, down 68.39% from the same period last year. During the reporting period, the company mined 728000 tons of lead-zinc ore, processed 849300 tons of lead-zinc ore, and produced 21357.75 metal tons of zinc concentrate, down 22.23 percent from the same period last year and 2783.83 metal tons of lead concentrate, down 25.9 percent from the same period last year.

Zijin Mining Industry

During the reporting period, the Group realized sales revenue of 83.142 billion yuan, an increase of 23.73% over the same period last year, and the net profit attributable to shareholders of the parent company was 2.421 billion yuan, an increase of 30.64% over the same period last year.

The growth of Zijin Mining's net profit was mainly due to the gold and copper business, and the company's gold plate continued to make efforts to achieve 20.24 tons of mineral gold, an increase of 5.93 percent over the same period last year. The copper plate maintained a high growth trend, achieving 230700 tons of mineral copper, an increase of 34.85 percent over the same period last year. During the reporting period, the group produced 264430 tons of zinc, down 10.48% from the same period last year, of which the mineral zinc concentrate contained 159051 tons of zinc, down 14.83% from the same period last year. Smelting produced 105379 tons of zinc ingots, down 2.99 percent from the same period last year; lead concentrates produced contained 18246 tons of lead, an increase of 4.75 percent over the same period last year.

Overall, due to the impact of zinc prices in the first half of the year, the performance of zinc upstream enterprises is poor. However, since the end of March, zinc prices have bottomed out and rebounded. The highest level of the Shanghai Zinc Index has reached 20385 yuan / ton. Profits of both mining enterprises and smelters have gradually recovered, and smelters are in the process of gradually increasing production. According to SMM research, as of September 4, the profit of zinc smelters was 1478 yuan / ton, up 1174 yuan / ton from the lowest level of 304 yuan / ton since the beginning of the year; the profit of zinc mine was 3412 yuan / ton, up 4648 yuan / ton from the lowest level of-1236 yuan / ton since the beginning of the year, so the profits of zinc upstream enterprises may pick up in the second half of the year.

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