Jin Chengxin (603979): Growth in overseas projects is worth looking forward to

Jin Chengxin (603979): Growth in overseas projects is worth looking forward to
Event: According to the announcement, Gold Credit Columbia Gold recently entered into a project contract with Kakula Underground Development of the Kamoa Copper Mine in Congo and the owner Kamoa Copper SA.The contract is expected to run from March 21, 2019 to December 12, 2023; the total contract price is approximately USD 287,946,769; the estimated time is June 7, 2019. Large overseas orders are coming to the next city, further highlighting the company’s strength in overseas large-scale mine construction services. The company has been engaged in mining construction and mining operations for many years, and has gone abroad to serve large-scale foreign mines for 16 years. According to the company ‘s announcement, since 2003, it has undertaken the mining operation management of the Chambishi copper mine in Zambia.Development service project, started to serve Zambia’s KCM copper project in 2012; started to serve Zambia’s Chibluma company’s Chibluma project and Zippu project; in 2017, it started to serve Zambia’s Lubabe copper mine project and Congo Golden Kamoa copperMining project; Beginning of service for Luanshabaruba copper mine in Zambia in 2018; Beginning of service for Zijin Mining Serbia Timok copper-gold mine in 2019.The contract announced this time is a continuation project after the acceptance of the slope engineering of the Kamoa Copper Mine in Zambia in 2017. The amount is equivalent to approximately RMB 2 billion, which is the second largest order announced by the company since its listing. We believe that the continuation of the underground pioneer project contract has proved the company’s service strength in overseas mine construction; accordingly, since Jinchengcheng and Zijin Mining signed a strategic cooperation agreement in the field of mine service and development, the project continued from the project.It also indicates that the company is expected to undertake the Kamoa copper mining operation in the future and obtain more orders. There are sufficient orders in hand, and the proportion of overseas business continues to increase, ensuring stable growth in performance.According to the announcement and our calculations, the company’s daily operating contracts have increased steadily. In 2019, uncompleted orders in hand exceeded 9 billion yuan, about three times the main operating income in 2018, of which overseas orders accounted for about 61%.The large internal market is developing at a rapid pace, and the African blue ocean market has been actively explored. Since 2017, the total value of overseas contracts has reached approximately 7.7 billion yuan, and it has continued to present a rapid growth trend, with its business focus constantly shifting outward. The successful delivery of phosphate ore marks the beginning of the company’s “mining resources development sector”.According to the announcement, the company signed a formal phosphate rock ownership distribution agreement (90% of the shares) on May 23, and announced on June 13 that it had obtained a phosphate rock business license, marking the company’s formal takeover of phosphate rock development.According to the announcement, the amount of phosphate rock resources is 2133 samples and the grade is 32.46%, the planned production capacity is 80 years / year, and the mining period is more than 15 years. Construction is expected to start in early 2020, with a total investment of about 6.800 million, 杭州桑拿网 with an average annual net profit of about 60 million yuan. Maintain “Buy-A” investment rating with 6-month target price of 13.93 yuan.We expect the company’s net profit attributable to mothers to enter into an accelerated period from 2019 to 2021, respectively.100 million, 5.800 million and 7.700 million.The corresponding EPS are 0.70 yuan, 1.00 yuan and 1.32 yuan.Focusing on the company’s outstanding growth, it is expected to benefit from the promotion of the Belt and Road Initiative, and has realized the transformation to a mining operator, further improving performance flexibility, and giving 20xPE in 2019 with a 6-month target price of 13.93 yuan. Risk reminders: 1) The global mining capital expansion is less than expected; 2) The company’s acquisition of mines is less than expected; 3) Political risks occur in countries 杭州桑拿网 where overseas projects are located