We revise down the TP of Zhaojin Mining (the "Company") to HK$12.06 due to lower EPS estimation, but maintain the investment rating at "Buy". Our TP represents 36.0x 2023 PER and 22.1x 2024 PER. Net profit of Zhaojin Mining has great growth potential in 2024-2025 and will be driven by higher gold price and descending mined gold production costs.

We forecast net profit of Zhaojin Mining to grow largely in 2024 and 2025 due to higher gold price and descending mined gold production costs. We forecast gold price to rise in 2024 as the US Federal Reserve to cut interest rate. Gold assets are of high value during the period of US Federal Reserve's interest rate cut. Descending mined gold production costs will be another driver of profit growth in 2024.

We believe the Descending of mined gold production costs in 2024-2025 was under estimated. The descending of mined gold production costs will be another main driver of profit growth in 2024-2025. In 2023, the decline in production costs have not been witness by investors and mined gold production costs of the Company in 1H2023 remained high. We believe the descending in production costs to accelerate in 2024-2025 due to expanded production scale, especially when new mines commence production.

Catalysts: gold price rise; the US Fed to cut interest rate early; financial market turbulence.

Risks: decline in gold price; gold mine production impacted by external factors.