Investment Rating - The report maintains a Buy rating for Zhaojin Mining (1818) with a target price of HKD 17.39, representing a 26.2% upside from the current price [1][3] Core Views - Zhaojin Mining's performance has significantly improved, driven by higher gold prices and increased production volume [1] - The company's overseas projects are progressing steadily, with substantial potential for future production growth [1] - The gold price is expected to remain high, supported by Fed rate cut expectations and central bank gold purchases, providing a stable foundation for the company's performance [1] Financial Performance - In H1 2024, Zhaojin Mining achieved RMB 4.627 billion in revenue, a 34.24% YoY increase, and RMB 553 million in net profit attributable to shareholders, a 118.62% YoY surge [1] - The company's gold production reached 13.18 tons, up 12% YoY, with self-produced gold at 9 tons (+6.9% YoY) and smelted gold at 4.18 tons (+24.8% YoY) [1] - The cost per gram of gold decreased by RMB 4.7, leading to a 3.72 percentage point increase in gross margin [1] Gold Price Trends - The London gold spot price reached USD 2,322.7/oz by the end of June 2024, up over 13% from the beginning of the year, breaking the USD 2,300/oz threshold [1] - The Shanghai Gold Exchange Au9999 price rose to RMB 549.88/g, a 14.4% increase from the start of the year [1] Production Expansion - Zhaojin Mining completed the full acquisition of Tietuo Mining, which has a gold resource reserve of over 40 tons and is expected to produce 4-5 tons annually [1] - The company acquired a 70% stake in Ruihai Mining, which owns the largest single gold mine in China (Haijing Gold Mine) with a total gold resource of 562.37 tons and mineable reserves of 212.21 tons [1] - The Haijing Gold Mine is expected to reach 15 tons of annual production by 2027 [1] Financial Forecasts - The report forecasts net profit attributable to shareholders of RMB 1.25 billion in 2024, RMB 1.98 billion in 2025, and RMB 2.7 billion in 2026 [1] - Revenue is projected to grow to RMB 12.85 billion in 2024, RMB 15.85 billion in 2025, and RMB 19.41 billion in 2026, with YoY growth rates of 53%, 23%, and 23%, respectively [2] - EPS is expected to increase to RMB 0.37 in 2024, RMB 0.58 in 2025, and RMB 0.79 in 2026 [2] Valuation Metrics - The target price of HKD 17.39 is based on a 30x PE multiple for 2025 [1] - The current PE ratio is 33.8x for 2024, 21.4x for 2025, and 15.6x for 2026 [2] Industry and Market Position - Zhaojin Mining operates in the non-ferrous metals industry and is positioned as a leading gold producer with significant resource reserves and production capacity [3] - The company's major shareholders include Zhaojin Group (37.15%) and Zijin Mining (20%) [3]
招金矿业：业绩大幅增长，海外项目稳步推进，增产空间巨大