标题：China Molybdenum2015 in line;low cost advantage highlighted by weak prices
发布日期：2016-03-29 11:54:49
内容： In 2015, net profit attributable to shareholders dropped 58% YoYto Rmb761mn. In addition to the sharp decline in product prices,non-recurring income in 2015 plunged 97% YoY, with investmentincome from fair value changes down Rmb470mn. In 2015, ASP of molybdenum concentrate, tungsten concentrateand copper fell 29%, 31% and 20% YoY. Higher-than-expectedMo (+4% to 17kt) & W (+21% to 9,825t) output; copper outputdeclined 27% YoY to 39,964t. Better cost control: unit cost ofMo, W, & Cu Rmb53,906, Rmb14,925 and US$0.64 per tonne,15%, 6% & 19% lower than planned. Amid the sluggish productprices, blended gross margin only dropped 4ppt to 37.5%. Trends to watch S-T molybdenum/tungsten prices backed by cost. As theMo & W prices fell below the marginal cost, most manufacturersbarely broke even or suffered losses. Backed by costs, the S-Tprice is unlikely to decline, though recovery is not yet clear.Improved operation of NPM copper mines; visible costadvantage. In 2015, NPM copper mines contributedRmb320mn or 42% of net profit. The cash cost of copper wasonly US$0.64/pound (US$1,411/t), at the front end of the costcurve, providing strong support for earnings. Earnings forecast Cut 2016e & 2017e EPS by 22% & 15% to Rmb0.05 &Rmb0.05, mainly to reflect the product price pressure. Valuation and recommendation Cut A- & H-share TP by 24% & 30% to Rmb4.2 & HK$1.9,implying 4x & 1.5x 2017e P/B. Maintain BUY. Risks Lower-than-expected metal prices; cost control disappoints.
发布日期：2016-03-29 11:54:49
内容： In 2015, net profit attributable to shareholders dropped 58% YoYto Rmb761mn. In addition to the sharp decline in product prices,non-recurring income in 2015 plunged 97% YoY, with investmentincome from fair value changes down Rmb470mn. In 2015, ASP of molybdenum concentrate, tungsten concentrateand copper fell 29%, 31% and 20% YoY. Higher-than-expectedMo (+4% to 17kt) & W (+21% to 9,825t) output; copper outputdeclined 27% YoY to 39,964t. Better cost control: unit cost ofMo, W, & Cu Rmb53,906, Rmb14,925 and US$0.64 per tonne,15%, 6% & 19% lower than planned. Amid the sluggish productprices, blended gross margin only dropped 4ppt to 37.5%. Trends to watch S-T molybdenum/tungsten prices backed by cost. As theMo & W prices fell below the marginal cost, most manufacturersbarely broke even or suffered losses. Backed by costs, the S-Tprice is unlikely to decline, though recovery is not yet clear.Improved operation of NPM copper mines; visible costadvantage. In 2015, NPM copper mines contributedRmb320mn or 42% of net profit. The cash cost of copper wasonly US$0.64/pound (US$1,411/t), at the front end of the costcurve, providing strong support for earnings. Earnings forecast Cut 2016e & 2017e EPS by 22% & 15% to Rmb0.05 &Rmb0.05, mainly to reflect the product price pressure. Valuation and recommendation Cut A- & H-share TP by 24% & 30% to Rmb4.2 & HK$1.9,implying 4x & 1.5x 2017e P/B. Maintain BUY. Risks Lower-than-expected metal prices; cost control disappoints.
