The company's 2014 interim results were higher than our estimates. Due to the decline in gold sales, the company's revenue fell 18.4% year-on-year to 3.28 billion yuan, but the company achieved a net profit of 17.4 million yuan in the first half of the year.

Keep the gold price assumption unchanged. As some central banks, especially the Federal Reserve, begin to withdraw from quantitative easing policies, we expect gold prices to be under pressure for a long time.

Keep the mineral gold production assumption unchanged, but raise the copper foil production assumption. Due to the suspension of Kyrgyz gold mine production, the company's ore gold production is expected to remain around 3.1 tons in 2014.

The target price was raised to HK$1.35 and upgraded to a “neutral” investment rating.