Net profit for 23Q4 was 321 million yuan, an increase of 184%, and the performance slightly exceeded expectations. According to the company's annual report, in '23, the company achieved revenue of 8.424 billion yuan, an increase of 5.47%, and a net profit of 686 million yuan, an increase of 70.78%. Among them, in 23Q4, the company achieved revenue of 2.083 billion yuan, a decrease of 7.47%, and a net profit of 321 million yuan, an increase of 135.03%, and an increase of 183.98%.

By the end of '23, the company's balance ratio was 52.54%, down 3.77PCT from the beginning of the year.

In 23Q4, gold prices increased month-on-month. According to Wind, 23Q4, the average price of COMEX gold was 1986.9 US dollars/ounce, up 14.5% and 2.0%; SHFE gold averaged 472 yuan/gram, up 17.8%, and 2.7%.

Mineral gold is expected to increase. According to the company's annual report, the company's total gold output in '23 was 24.68 tons, a decrease of 9.75%; among them, mineral gold production was 17.58 tons, a decrease of 8.63%; smelting and processing gold production was 7.11 tons, a decrease of 12.39%; and mineral copper production was 5010 tons, an increase of 15.36%. In terms of mineral gold, the Ruihai Mining (70% interest) offshore gold mine, wholly-owned Dayingezhuang gold mine, and Jintingling Caogoutou Phase II are expected to be completed and put into operation.

Profit forecasting and investment advice. The company's EPS for 24-26 is expected to be 0.31/0.48/0.74 yuan/share, respectively, and the PE corresponding to the latest closing price is 27.8/17.6/11.5 times, respectively. The upward channel for gold prices remains unchanged. The company: 1. Mine costs within the port are at the leading level in the industry; 2. It has expectations for mineral gold growth, and newly built mines have cost and scale advantages; 3. The business model and scale of growth are similar to Shandong Gold, with a certain valuation premium. We think it is reasonable to give the company a 24-year 40 PE valuation. According to the latest closing price of HKD/RMB, the reasonable value of the corresponding H shares is HK$13.24 per share, giving the company a “buy” rating for H shares.

Risk warning. Risk of gold price and cost fluctuations; risk of exchange rate fluctuations; risk of growth falling short of expectations.