CHIFENG GOLD(600988) 东兴证券·2024-11-01 12:15Investment Rating - The report maintains a "Recommended" rating for Chifeng Gold [6][7]. Core Views - Chifeng Gold is entering a new phase of stable performance optimization, driven by effective cost reduction and efficiency enhancement initiatives [2][6]. - The company reported a significant increase in revenue and net profit for Q3 2024, with revenue reaching 6.223 billion yuan, up 22.93% year-on-year, and net profit attributable to shareholders at 1.105 billion yuan, up 112.59% year-on-year [2][3]. - The average sales cost of gold for the company is significantly lower than the global average, indicating strong cost control capabilities [3][4]. Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 6.223 billion yuan, with a year-on-year growth of 22.93%, and a net profit of 1.105 billion yuan, reflecting a 112.59% increase [2][3]. - The average sales cost of gold was 281.55 yuan per gram, and the average all-in sustaining cost was 285.53 yuan per gram, which is 10% lower than the global average of 1388 USD per ounce [3]. - The company’s sales expenses decreased by 41.3% year-on-year, while management expenses fell by 9.3%, showcasing effective cost management [3][4]. Production and Growth - The company's gold production has shown a compound annual growth rate (CAGR) of 20.8% from Q3 2021 to Q3 2024, increasing from 6.09 tons to 10.75 tons [4][6]. - The company is expected to benefit from scale effects, with projected gold production reaching 20.26 tons by 2026 [6][7]. - The report anticipates that the company's gross margin will continue to improve, potentially exceeding 50% by 2026 [3][4]. Future Outlook - Revenue forecasts for 2024-2026 are projected at 9.897 billion yuan, 11.299 billion yuan, and 13.689 billion yuan, respectively, with net profits expected to reach 1.704 billion yuan, 2.091 billion yuan, and 2.430 billion yuan [7][9]. - The report highlights a structural tightening in gold supply and demand, suggesting a favorable pricing environment for gold in the coming years [7].