Huayou Cobalt (603799) Interim Report Comments: Low Cobalt Price Drags Down Earnings

Huayou Cobalt (603799) Interim Report Comments: Low Cobalt Price Drags Down Earnings

The investment point 19H1 achieved net profit attributable to mother 0.

3.3 billion, before -97.

82%: The company achieved 91 in the first half of 2019.

40,000 yuan, an increase of 34 in ten years.

21%; net profit attributable to mother 0.

33 ppm, with a ten-year average of 97.

82%; deduct non-net profit -0.

41 trillion, down 102 a year.


In terms of profitability, the company’s gross profit margin was 12% in the first half of the year, which has fallen by 26 each year.

46 averages; net interest rate is 0.

29%, a decrease of 21 per year.

94 points.

In 19Q2, the gross profit margin stabilized month-on-month, and inventory impairment losses remained high.

In terms of quarters, the company achieved revenue of 47 in the second quarter of 2019.

30,000 yuan, an increase of 40 in ten years.

28%, an increase of 6 from the previous month.

86%; net profit attributable to mother 0.

200 million, a year down 96.

88%, an increase of 65 from the previous month.


In terms of profitability, the company’s gross profit margin was 11 in the second quarter.

99%, a decrease of 29 per year.

89 units, basically unchanged from the previous month, mainly because the proportion of copper products with higher 武汉夜生活网 gross profit margins increased.

19Q2 Asset impairment loss1.

65 ppm, a six-year increase of 6.

2 times, mainly due to the accumulative decline in inventory prices of Colombian prices.

19H1 cobalt price accelerated decline, cobalt product gross margin bottomed out.

Revenue from cobalt products was 30 in 19H1.

12 ‰, 37 years ago.


Production and sales maintained steady growth, and the company’s cobalt product output in the first half of the year.

Every year, sales increase by 17% a year.

28 Cobalt metal volume, an increase of 37 in ten years.


In the first quarter, the price of MB cobalt accelerated, and it rose slightly from April to May. It was difficult to stop the decline. In the first half of 19, MB fell 39%, and the domestic price of non-ferrous cobalt in the Yangtze River dropped 29%.

The 杭州桑拿网 company’s cobalt product 19H1 gross profit margin 11.

43%, 36 years ago.33pct, add 10 to 18H2.


According to our calculations, the company’s cobalt product 19H1 single ton oxide is 23.

480,000 / ton (excluding tax), it fell 54%, compared with 39% earlier 18H2.

May-June demand was sluggish, the precursors exceeded expectations, and the overall decline was significant.

The ternary precursor 19H1 earned 5.

5.2 billion, 23 years before.


Sales of 6,782 tons were basically flat for one year, slightly lower than expected.

Preliminary objective 1.

5 the highest budget, the budget is expected to be 0 in the second half of the year.

8-1 budget.

19H1 ternary precursor gross margin 6.

7%, a decline of 10 per year.

4pct, down 20 from the previous month.


The 19H1 ternary precursor has a purity of 8 per ton.

140,000 yuan / ton (excluding tax), exceeding the decline of 27.

7%, down 19% from the previous month.

Mikas deposits copper, and copper products provide performance support.

Copper products’ revenue in 19H1 was 13.

20 ppm, an increase of 79 per year.


Mainly in the first half of the year MIKAS copper deposit volume, and overall copper prices firm, sales and gross profit margins increased simultaneously.

Gross profit margin 38.

38%, an increase of 22 a year.

22pct, an increase of 8 over 18H2.

9 points.

The subsequent PE527 mining right Lukuni mine with an annual output of 30,000 tons of copper deposits is expected to be completed and put into operation within the year, providing strong support for the company’s subsequent performance.

Raw material inventory decreased, and operating cash flow improved significantly.

In the first half of 2019, the company’s inventory was 40.

4.0 billion, an earlier decrease of 27.

03%, the main raw material inventory 28.

70 trillion, down 34 a year.

8% of inventory goods 11.

4.4 billion, basically unchanged; accounts receivable 8.

1.3 billion, a decrease of 11 from the beginning of the year.

23%; the company’s advance receipts at the end of the period were 0.

82 trillion, a decrease of 67 from the beginning of the year.

44%.Net cash flow from operating activities was 11.

2.0 billion, an increase of 861 in ten years.

87%, mainly due to lower market prices and lower procurement expenditures; net cash flow from investment activities was -26.

1.2 billion, -5 in the same period last year.

9.8 billion yuan.

Earnings forecast and investment grade: 2019-2021 is expected to return to the mother’s net profit4.



0.6 billion, an increase of -69% / 153% / 44% over the same period, and EPS is 0.



58 yuan / share, corresponding to PE of 58x / 23x / 16x. Considering that the company has abundant cobalt resources and the downstream layout of the industrial chain is progressing smoothly, we will give 29 times PE in 2020 with a target price of 32 yuan and maintain a “buy” rating.

Risk warning: Macroeconomic downturn, price reductions exceed expectations, sales volume is lower than expected