Text: Julie, researcher at IQHCJ
Editor: Xu Hui
Recently, Guiyang Bank Shuanglong Airport Branch sued Guizhou International, claiming more than 1.6 billion yuan; Guizhou International is a wholly-owned subsidiary of Zhengwei Holdings, a subsidiary of Wang Wenyin, the world's copper king, and Zhengwei Group is the controlling shareholder of Guizhou International. Wang Wenyin holds 20 mines around the world and has a net worth of 100 billion.
Sichuan Liwu Copper Co., Ltd., which is also in the Nugget Copper Market, plans to be listed on the main board of the Shenzhen Stock Exchange, and the sponsor is Guojin**. The number of this issuance** does not exceed 7516670,000 shares, not less than 25% of the total share capital after issuance. The company plans to invest in raising funds 70.8 billion yuan, which will be used for the 1500t D mining and dressing project of Zhongzui Copper Mine, the exploration of copper ore resources in Liwu Minefield, Jiulong County, Sichuan Province, the construction (upgrading) of Sichuan Liwu Copper Co., Ltd. smart mine and Sichuan Liwu Copper Co., Ltd.
Liwu Copper Ganzi Prefecture State-owned Assets Supervision and Administration Commission is actually controlled, and the shares held by renewable resources have been frozen, involving a number of bribery cases; The main income** and the main mines are relatively single, and the growth rate of revenue and net profit has declined; High customer concentration, large amount of related party transactions, and large interest expenses; The production capacity has fluctuated, and the emergency bureau has frequently punished it.
Ganzi Prefecture State-owned Assets Supervision and Administration Commission actually controlled, the shares held by renewable resources were frozen, and a number of bribery cases were involved
Liwu Copper, formerly known as Liwu Copper Mine in Sichuan Province, was established on July 23, 1998, and in 2004, the company carried out the reform of the labor and employment system, and carried out the conversion of the identity of all state-owned enterprises, with a registered capital of 14,236650,000 yuan. The controlling shareholder of the company is Ganzi Prefecture Investment Company. The actual controller is the State-owned Assets Supervision and Administration Commission of Ganzi Prefecture. As of the date of the signing of this Prospectus, Ganzi Prefecture Investment Company directly held 7,44367.68 million shares, accounting for 3301%, and at the same time through the "Concerted Action Agreement" with Jiulong County State-owned Assets Company, a total of 4790% of the voting rights and the controlling shareholder of the company; The State-owned Assets Supervision and Administration Commission of Ganzi Prefecture indirectly controls the company through the control of the Ganzi Prefecture Investment Company and the Jiulong County State-owned Assets Company4790% of the shares are the actual controllers of the company.
As at the date of this Prospectus, China Renewable Resources Corporation, as one of the shareholders of Liwu Copper, held 2,57378.57 million shares, accounting for 114137%。Weigh the financial IQHCJ noted that China Renewable Resources Corporation holds 2,573 companies78.57 million shares were frozen by the court, and 2,369 shares were partially frozen47.57 million shares have started the share auction evaluation process, and if the frozen shares are subsequently disposed of by the judiciary, there is a risk that the company's shareholders may change.
During the reporting period, there were three administrative penalties imposed by directors, supervisors, senior managers and other core personnel of Liwu Copper, all of which were emergency administrative penalties.
According to the judgment documents, there are as many as 70 cases involving Liwu Copper, which shows that its business disputes continue, especially the labor disputes caused by the contracting of mining business with Junhua Mining Development in Yimen County. and involved in criminal cases, there are also Wang Fuhong, Teng Longyu and Hu Jianqiang.
Zhu Jun, director and general manager of Liwu Copper, was a witness in the Ma Guozhong ** case and Li Ziwu *** case, and Zhu Jun did not constitute a criminal offense in these cases as confirmed by the competent investigative authorities in these cases.
The main income** and the main mines are relatively single, and the growth rate of revenue and net profit has declined;
Liwu Copper is a state-owned holding enterprise in Sichuan Province mainly engaged in the mining and sales of non-ferrous metal mineral resources and the development of hydropower resources. The company's main business is its own copper ore mining and beneficiation business, and its main products are copper concentrate. From 2020 to January to June 2023, the company's operating income was 397.5 billion yuan, 521.6 billion yuan, 548.2 billion yuan and 266.5 billion yuan, with revenue growth of 31 in 2021 and 2022, respectively22% and 510%；The net profit for each period was 6124470,000 yuan, 125.8 billion yuan, 13.5 billion and 5589320,000 yuan, and the net profit growth in 2021 and 2022 will be 105 respectively47% and 731%。
During the reporting period, the company's revenue was mainly from the sales of copper concentrate products, and the sales revenue of copper concentrate products accounted for the proportion of main business income respectively. 47% and 9029%。
The sales of the company's main product, copper concentrate, were affected by factors such as changes in downstream market demand, and there were obvious fluctuations during the reporting period. Copper concentrate ** is an important factor affecting the company's sales revenue, after calculation, if according to the sales scale, cost and non-operating income and expenditure level of the whole year of 2022, assuming that only the change in copper concentrate ** has an impact on the company's total consolidated profit, when the average sales unit price of the company's copper concentrate excluding tax is less than 3680,000 yuan, that is, the sales unit price decreased by 3373% (In 2022, the average sales unit price of the company's copper concentrate excluding tax was 5.)550,000 tons), the company will likely lose money.
In terms of the distribution of global copper producers, the countries with the largest copper reserves in the world are Chile, Australia and Peru. From a global perspective, the top five major copper producers in the world in 2022 are Chile, the Democratic Republic of the Congo (DRC), Peru, China and the United States, of which China's copper mine production in 2022 accounts for about 8 percent of the global copper mine output60%, while Chile, which ranks first, accounted for about 24% of global copper mine production in 202209%, it can be seen that China's copper mine production is still relatively small in the world.
From the perspective of the world's major copper producers, the top 10 companies produced 10.3 million tons of copper, accounting for about 47 percent of the global total30%, the industry concentration is relatively high. According to Antaike's statistics, in 2022, there will be 4 enterprises in the global million-ton copper mine production level, all of which are foreign enterprises.
Within the scope of mining rights and prospecting rights, the total retained resources (copper metal volume) of the four copper mines currently owned by Liwu Copper have reached 56400,000 tons. From 2020 to 2022, the company's copper concentrate (copper metal volume) output was 0830,000 tons, 0810,000 tons and 0840,000 tons, accounting for the proportion of national output. 44% and 050%。
At present, the company has the mining rights of four copper mines, namely Liwu Copper Mine, Heiniudong Copper Mine, Zhongzui Copper Mine and Dujingou Copper Mine, of which the mining area and resources of Dujingou Copper Mine are small, but its ore body extends outward obviously, and its peripheral and deep prospecting prospects are good.
As of December 31, 2022, the retained resources (copper metal volume) of Liwu Copper Mine, Heiniudong Copper Mine, Zhongzui Copper Mine and Dujingou Copper Mine within the mining rights were 1050,000 tons, 16210,000 tons, 8890,000 tons and 0320,000 tonnes at an average grade. 14% and 097%, the average grade of the company's mines is significantly higher than the average grade of domestic copper mines; Within the scope of the prospecting rights, the retained resources (copper metal amount) of the Heiniudong Copper Mine and the Zhongzui Copper Mine are 19 respectively570,000 tons and 10350,000 tons.
During the reporting period, the company's comprehensive gross profit margin was as follows. 86% and 4520%, the company's gross profit margin is at a high level, and the corresponding comprehensive gross profit margin of comparable companies is quite different.
The Liwu Copper Mine is the first mine developed by the Company, and the grade of copper in the ore has been decreasing year by year as the mining depth changes from top to bottom. The mining license of Liwu Copper Mine will expire on March 20, 2025, and the Heiniudong Copper Mine has become the company's main mine. If the Liwu Copper Mine is unable to find a new industrial value ore body in the deep edge prospecting and renew the mining rights in the future, the copper concentrate (copper metal volume) production of the Liwu Copper Mine will continue to decline in the next few years, so there is a risk that the remaining service life will be shorter. In addition, Zhongzui Copper Mine, as a successor resource of Liwu Copper Mine, is still in the construction period, and its implementation progress and benefits may be different from expectations, while the area and resources of the Dijingou Copper Mine are small, and if its peripheral and deep prospecting cannot make a big breakthrough, it will not have mineable economic value.
Therefore, in the short term, the company's main mine is relatively single, and if the Heiniudong copper mine is reduced or even stopped in the production and operation process in the future, it will have an adverse impact on the sustainability and stability of the company's operating performance. The company and its subsidiaries have a total of 5 mining rights and 2 prospecting rights, of which 1 mining right has expired, which is currently being renewed. If the prospecting rights or mining rights owned by the Company expire and are not renewed in a timely manner, or if the Company's new mineral resources discovered in the future cannot obtain a mining license in a timely manner, the Company's exploration investment and mining and dressing operations in related mines will be exposed to risks, which will have a negative impact on the Company's production and operation.
The company's estimated liabilities are the costs of mine geological environment treatment and restoration related to mine abandonment and the income from the transfer of mining rights, which exceeded 50 million yuan in each period of the reporting period.
High customer concentration, large amount of related party transactions, and large interest expenses;
During the reporting period, the customers of copper concentrate, the main product of Liwu Copper, were mainly listed company customers, and listed companies such as Yunnan Tin Industry Co., Ltd., China Copper International (a holding subsidiary of Yunnan Copper), Henan Yuguang Gold and Lead Co., Ltd., Daye Nonferrous Metals Co., Ltd., etc., have maintained long-term and stable cooperative relations with the company.
From 2020 to January to June 2023, the company's sales to the top five customers were 388.9 billion yuan, 487.9 billion yuan, 507.8 billion and 256.1 billion yuan, accounting for the proportion of the company's sales in the same period. 62% and 9610%, showing the characteristics of high sales concentration of the top five customers.
During the reporting period, the company's major related party transactions were mainly related party sales to China Copper International and Yuntong Zinc Industry. China Copper International is a holding subsidiary of Yunnan Copper, and Yunnan Copper and Zinc is a holding subsidiary of Yunnan Copper (Group)**. During the reporting period, the sales revenue generated by related party sales was 9,267170,000 yuan, 140.8 billion yuan, 137.7 billion yuan and 147.6 billion yuan, accounting for the proportion of the current operating income respectively. 11% and 5539%。Among them, the company's sales of copper concentrate to China Copper International accounted for the proportion of operating income respectively. 37% and 5040%。During the reporting period, the company's sales of zinc concentrate to Yuntong and Zinc Industry accounted for the proportion of operating income respectively. 74% and 499%。
The company's fixed investment and investment in construction are large, and the company's long-term borrowings in the reporting period were 34.2 billion yuan, 236.8 billion yuan, 222.8 billion and 222.4 billion yuan, accounting for a high proportion of non-current liabilities. 20% and 6828%；This resulted in significant interest expense, which amounted to 3,279 in the reporting period910,000 yuan, 2,843170,000 yuan, 1,890890,000 yuan and 727370,000 yuan, the financial expense rate is respectively. 06% and 267%。
Correspondingly, Liwu Copper still has the impulse to pay large dividends, and the company's cash dividends from 2020 to 2022 will be 22.44 million yuan, 24.48 million yuan and 72.57 million yuan respectively620,000 yuan, a total of nearly 1200 million yuan.
The production capacity has fluctuated, and the emergency bureau has frequently punished it.
Liwu Copper's main product is copper concentrate, and the company's copper concentrate production and sales volume remained basically balanced during the reporting period. Due to the fact that the mine has entered a depletion period, the capacity utilization rate of the company's Liwu copper mine during the reporting period was affected by the gradual decrease in the average grade. 36% and 4731%。In addition, the Liwu Copper Mine has entered a depletion period after nearly 30 years of mining, although the production scale listed on its mining license is 49500,000 tons per year, but the scope of the safety production license of Liwu Copper Mine is 230,000 tons of underground mining of copper, silver and sulfur per year. 02% and 10182%。
At present, the company's main mine has been changed from Liwu Copper Mine to Heiniudong Copper Mine. During the reporting period, the capacity utilization rate of Heiniudong Copper Mine was as follows: 58% and 6670%, is in the production capacity ramp-up stage, and its output will maintain a gradual growth trend. After the completion and commissioning of the Tsui Copper Mine in the fundraising project, the company's copper concentrate output will be further increased. Liwu Copper Mine and its subsidiaries were subject to as many as 12 administrative penalties, with a total fine of 143440,000 yuan.
In addition, in November 2023, Litong Power was found to have committed a minor violation and imposed a fine of RMB 30,000 by the Jiulong County Water Conservancy Bureau in the Administrative Penalty Decision [2023] No. 01 issued by the Jiulong County Water Conservancy Bureau due to the new water intake of the Sanyahe Secondary Hydropower Station due to the impact of the surrounding hydropower stations.
During the reporting period, there were many administrative penalties involved in the provision of services by relevant mining contractors and engineering contractors to the company, and in 2022, the company was required to rectify the problems found in the double random inspection.
Under the registration system, IPO companies should pay more attention to the quality of information disclosure, whether their business indicators can meet the listing requirements, and the subsequent sustainable business status.