Jinshi Resources (603505) Semi-annual Report Comment: Volume and Price Rise Achieved Significant Growth, Safety and Environmental Protection Under High Pressure Fluorite Industry Prosperity Continues to Rise

Jinshi Resources (603505) Semi-annual Report Comment: Volume and Price Rise Achieved Significant Growth, Safety and Environmental Protection Under High Pressure Fluorite Industry Prosperity Continues to Rise
The company released the semi-annual report for 2019. The company’s total operating income and net profit attributable to its mother in the first half of the year were 3 respectively.5.8 billion and 1.1.1 billion, an increase of 62 each year.77% and 160.67%. Both volume and price increases have boosted performance with a significant quarter-on-quarter improvement. According to the company’s announcement, the company’s single-quarter performance in the second quarter was approximately 69.2 million, an annual increase of 214 and a quarter-on-quarter increase.12% and 66.82%.The growth of the company’s performance was mainly due to the increase in the particle size and output of the company’s products. The average expenditure of the company’s acid-grade fluorite refined powder in the first half of 2019 was 2,563 yuan / ton (excluding tax price, the same below), an increase of 19.38%, the total sales of fluorite in the first half of 14.25 initially increased by 28.49%. Looking forward to the second half of the year, affected by environmental protection and production safety inspections, the operating rates of fluorite mines in Inner Mongolia, Jiangxi, Henan and other places will continue to remain low. We expect that the price of fluorite will remain high and upward;Trial production will begin in May, and contribution will begin in the second half of the year. We expect that the company will likely complete a series of 35-45 inserted fluorite sales targets, and the next two quarter results will go one step further. The Japan-South Korea trade war broke out, and the fluorite strategic breakthrough once again highlighted on July 4, 2019. The Japanese government announced restrictions on the export of fluoropolymer replacement, photoresist, and high-purity hydrofluoric acid to South Korea. This move will affect the entire Korean semiconductor manufacturing industry.In integrated circuits, the use of electronic grade hydrofluoric acid includes wafer surface cleaning, cleaning and etching during chip processing, and is an essential raw material in the semiconductor industry.Fluorite is the most important raw material for the production of electronic grade hydrofluoric acid, and it is one of 24 strategic minerals. The conversion into 杭州桑拿网 domestic semiconductor industry is accelerating. The mining of fluorite will be protected and guided by more policies in the future.Private mining, illegal mining, waste and other phenomena will be greatly reduced, and Jinshi Resources, as an industry leader, will continue to benefit from industry integration. Earnings forecast and rating: We expect the company’s net profit for 2019-2021 to be 2.93, 3.54 and 3.9.5 billion.The current anniversary corresponds to 16, 14 and 12 times the PE of 2019-2021.The company is the domestic fluorite resource leader and the only listed target. It has long been optimistic about the company’s growth potential as a fluorite leader in resource integration and maintains a “strong recommendation” rating. Risk warning: fluorite prices rise sharply; production safety risks; downstream demand is less than expected