Shandong Gold (600547): Gold upward cycle highlights the long-term allocation value of leading companies

Shandong Gold (600547): Gold upward cycle highlights the long-term allocation value of leading companies

Event description Comex gold price has gradually increased since the beginning of 20198.

4% to 1394.

$ 1 per ounce.

Event Comment Gold price entered a large-cycle upward channel: Gold price is highly negatively correlated with the global real interest rate environment, and is a reflection of the global economic cycle shift on commodity prices.

As the most currency-like commodity, gold is actually a non-interest-bearing (value-preserving) dollar-like asset. The fuse of this gold’s upward cycle is that the Fed may return to the interest rate reduction channel, and kick off the prelude to loose global liquidity.

The global economy is accelerating its growth. 都市夜网 Under the loose liquidity environment, gold often welcomes growth.

Back in history, whether in 1984, 1989, or 2001, after 2007, the global economy, the locomotive of the United States, fell sharply, gradually declined, and the average price of gold showed an upward trend.

The increase in the price of gold at the end of the economic cycle is mainly due to the fact that under the loose global liquidity environment, the real interest rate center has fallen.

Specifically, through the accelerated economic growth of the United States, the Federal Reserve often enters the cycle of rate cuts; the real interest rate center of the United States falls accordingly, which drives up the price of gold.

The leader in the pure gold industry and adheres to the international development strategy: the company adheres to the resource-first business philosophy and is an industry leader with gold as its main business.

(1) In terms of reserves, the company has 987 tons of gold equity resources and 350 tons of equity reserves.

Among them, the domestic mining gold equity resources amounted to 837.

7 tons, equity reserves of 253 tons, of which the four main domestic mines (Sanshandao Gold Mine, Jiaojia Gold Mine, Xincheng Gold Mine, Linglong Gold Mine) are the foundation of the company’s stable development; the overseas Belladro Mine has 149 gold equity resources.

3 tons, 97 tons of equity reserves, will be the main force for future output growth; (2) In terms of output, the company’s mineral gold output has steadily increased, and the company’s mineral gold output in 2018 was 39.

32 tons (domestic 30.

35 tons + foreign 8.

97 tons), an annual increase of 9.

6%; we expect that the output of mineral gold in the first half of 2019 is expected to be basically flat, stable at about 20 tons.

The upward cycle of gold shows the long-term allocation value of the leader, and the company’s performance is actively expected: (1) The company, as the leader of pure gold, has the highest output position, and can have the largest performance flexibility in the upward cycle of the gold price; (2) Group’s high-quality resourcesIt is the company’s subsequent savings guarantee. Shandong Gold Group has a large number of high-quality gold resources in the early stages of development, and the company has the right to purchase related resources from the group. (3) The international merger and acquisition strategy is conducive to the company’s development from the leader of the Chinese gold industry.Global gold industry giant.

In summary, in the gold upward cycle, the company allocates value for a long time.

Based on this, we expect the company’s EPS for 2019-2021 to be 0.

85, 1.

08 and 1.

25 yuan, corresponding PE is 46X, 36X and 31X.

Risk Warning: 1.

The company’s gold output was less than expected; 2.

The global macroeconomic recovery is strong, and the price of gold has fallen sharply.