According to a research report released by Bank of China International today, the net profit of Lingbao Gold (03330-HK) in 2009 increased 2% year-on-year to 118 million yuan (RMB, same below), which is 50% lower than the market forecast of 239 million yuan. Although the underlying business performance was better than expected due to rising gold sales and prices, the termination of the acquisition of Beijing Jiuyi's 56.25% equity led to a one-time investment margin impairment loss of 110 million yuan, which impacted net profit and gave the stock a selling rating.

The report also pointed out that the company's gold concentrate self-sufficiency ratio remains at a low level of 22%, so it is expected that even if the gold price trend is good in the future, the company's profit margin will not necessarily rise, because in the short to medium term, the company will still only be a smelting company. There is a lack of visible endogenous growth and acquisitions that can increase self-sufficiency in the short term. At the same time, the company's financial situation and transaction volume are poor compared to its Hong Kong-listed peers.