Jiangxi Copper released its 2020 report, with an annual operating income of 318.563 billion yuan, an increase of 32.54% over the same period last year; a net profit of 2.32 billion yuan, a year-on-year increase of 5.9%; a non-net profit of 2.774 billion yuan, an increase of 24.48% over the same period last year; and basic earnings per share of 0.67 yuan, a year-on-year increase of-5.92%.
Polymetallic resources are rich in reserves and have the advantages of a complete copper industry chain: by the end of 2020, the company's 100% entitled resource reserves are about 8.744 million tons of copper, 270.3 tons of gold, 8326 tons of silver and 201000 tons of molybdenum; the resources controlled by other companies are about 4.435 million tons of copper and 52 tons of gold; and the holding subsidiary Hengbang (holding 44.48%) has 156.57 tons of gold reserves.
The company has a complete industrial chain from mining and dressing to copper processing, in which Dexing Copper Mine is the largest open-pit mine in China, and its Guixi smelter is the largest copper smelter in the world. In addition, the company has an annual output of more than 1.4 million tons, making it the largest copper processing manufacturer in the country. The integrated industrial chain helps to improve economies of scale and production efficiency, which is reflected in the company's cost advantage. During this period, 1.31% (industry average 2.17%) and 0.85% management rate are in the lead in the industry, which contributes to the further expansion of the company's products and markets.
The copper plate business grew steadily: the company's copper production increased as a whole, and the copper refined mineral copper / cathode copper / copper processed products were respectively 20.86pm / cathode copper / copper processed products, which were 1.4712 million tons, compared with the same period last year, which was 22.89% compared with the same period last year. This led the revenue of the copper business plate to 243.37 billion yuan, + 21.3% compared with the same period last year. Although the average TC price of LME copper fell from + 2.95 per cent to $6199.1 per tonne in 2020, the average LME price of Chinese copper concentrate fell from-16 per cent to $54 per tonne in the same period, causing the gross margin of cathodic copper to fall by 0.56pct to 3.9 per cent. In 2021, the company plans to produce copper concentrate / cathode copper / copper processing products of 20.89 / 1.73 million tons respectively, with an increase of + 0.14% / 5.33% / 17.59% respectively.
The contribution of the precious metal plate has increased, and the performance is expected to be further released: the company's annual gold / silver production of 78.59t / 1126.39 tons, compared with the same period last year, + 56.7% of the same period last year. 74.2% of which Hengbang's gold / silver output is 47.9t / 801.54 tons. The company's precious metals business achieved revenue of 47.05 billion yuan, an increase of 111% over the same period last year, accounting for 14.77% of total revenue from 9.28%. The gross profit margin of the precious metals business fell 0.42pct to 6.61 per cent a year as higher gold and silver prices led to higher costs of raw materials. The company plans to increase its gold / silver production plan to 96 tons / 1279 tons in 2021, an increase of + 22.1% and 13.6%.
The key projects are progressing smoothly and moving steadily towards the three-year doubling goal: mining plate, Yinshan Mining 8000t/d and Wuzhong Phase III 10000t/d project will obtain mining certificate in June 2020, the company's long-term copper production will be increased to more than 220000 tons / year; smelting plate, Jiangtong Guoxing 180,000 tons / year cathode copper smelting, Jiangtong Hongyuan 100,000 tons / year cathode copper project is under construction, long-term smelting capacity of 1.8 million tons / year; Processing plate, Jiangtong Yates copper foil production line reconstruction and expansion gradually opened, the long-term copper foil production capacity will rise to 30, 000 tons / year. The company's production capacity expansion of the whole industry chain has strong certainty, and its growth is expected to continue.
The price of copper is high and the center of gravity of gold is moving up. Copper is periodically maintained strong due to tight supply and liquidity spillover at the mine end. From a long-term observation, the continuous tight balance between copper supply and demand is expected to lead copper prices to maintain high operation before 2023.
Taking into account the gold haven premium, liquidity premium and exchange rate premium fermentation and the global physical position ETF trend expansion, the average price of RMB gold may rise to more than 400 yuan / g.
Profit forecast and investment rating: from 2021 to 2023, we expect the company to achieve operating income of 34662 million yuan, 367662 hundred million yuan, 392.08 billion yuan respectively, net profit of 30.6 pounds 365pm 41.9 billion yuan, EPS 0.88 pound 1.06 pound 1.21 yuan, corresponding to PE 26.1 lead 21.9 pound 19.1 X, maintaining the "recommended" rating.
![This week, copper social inventories in major regions of China continued destocking [SMM weekly data].](https://imgqn.smm.cn/usercenter/XBbTq20251217171709.jpg)
![Macro Factors Weigh on Copper Prices, SHFE Copper Inter-Month Spread Occasionally Sees Backwardation Structure [SMM Shanghai Spot Copper]](https://imgqn.smm.cn/usercenter/CJXfS20251217171710.jpg)
