考虑到美联储降息的可能性，我们预计2024 年金价将上涨。在美联储降息期间，黄金资产具有较高的价值。我们回顾加息到降息周期内金价的表现会发现，在美联储货币政策发生重大变化的时期，黄金资产具有较高的价值。当市场明确美联储将开始降息时，金价又经历了一轮上涨。市场普遍预期美联储将在2024 年降息，唯一的争论点在于降息的时机和次数，但这两个因素不会影响金价走势。We maintain a “buy” rating and maintain a target price of HK$12.06. Our target price is equivalent to the 2024-2026 price-earnings ratio of 33.6 times, 26.0 times, and 22.2 times. Driven by rising gold prices, increased mineral gold production, and falling mineral gold production costs, we expect the net profit of Zhaojin Mining (the “Company”) to increase significantly in 2024-2026.
The company's 2023 results are largely in line with market expectations. Shareholders' net profit was RMB 686.4 million, up 70.8% year over year. Total revenue increased 6.8% year over year to RMB 8.42 billion. The company's total mineral gold production increased 5.8% year over year to 437,000 oz, and total gold production decreased by 9.75% year on year to 793,000 oz.
The decline in total gold production was mainly due to a decrease in the company's buyout funds. The average production cost of mineral gold rose 1.47% year over year to $969.88 per ounce, mainly due to rising labor costs and safety costs.
Considering the possibility that the Federal Reserve will cut interest rates, we expect the 2024 annuity price to rise. During the period when the Federal Reserve cut interest rates, gold assets had a high value. Looking back at the performance of gold prices during the period between interest rate hikes and interest rate cuts, we find that during the period of major changes in the Federal Reserve's monetary policy, gold assets have a high value. When the market made it clear that the Federal Reserve would start cutting interest rates, the price of gold experienced another round of increase. The market generally expects the Federal Reserve to cut interest rates in 2024. The only point of contention is the timing and frequency of interest rate cuts, but these two factors will not affect the trend of gold prices.
Offshore gold mining will become the company's main profit growth point from 2025. The company plans to complete the construction of an offshore gold mine in 2024 and start production in 2025. The total design capacity of the offshore gold mine is about 16-20 tons, and it is expected to reach the design production capacity in about 3 years. The average gold grade of offshore gold mines is 4.2 g/t, which is two times higher than the current average gold grade of gold mines. The estimated production costs for offshore gold mines are far below current levels. As a result, the commissioning of offshore gold mines is expected to significantly increase the company's profitability. We expect the net profit of Zhaojin Mining to increase significantly in 2024-2026, driven by rising gold prices, increased mineral gold production, and falling mineral gold production costs.
Catalysts: Gold prices rose; the Federal Reserve cut interest rates early; financial market turbulence.
Risk factors: Gold prices fall; gold production is affected by external factors.
