Results changed from profit to loss: In 2023, the company achieved total revenue of US$459 million, a year-on-year decrease of 58%; net loss was US$23 million, which changed from profit to loss year-on-year. The decline in the company's revenue and profit was mainly due to the overflow of tailings from the Guolanggou tailings depot in the Jiama mine. The suspension of production at the Jiama mine on March 27, 2023 affected overall production and performance. The company's comprehensive mine operating profit margin was 17.49%, down 18.31 percentage points from the same period last year. The company's annual mineral copper production in 2023 was 20,000 tons, down 76% year on year, and the average annual mineral copper sales price was 6989 US dollars/ton, down 4.23% year on year; the company's full year mineral gold production in 2023 was 147,900 oz, down 38% year on year, and the average price of mineral gold was 1962 US dollars/ounce, up 8.64% year on year.

Copper and gold prices continue to rise: as expectations of the Federal Reserve's interest rate cut ferment, the price of non-ferrous metals has increased dramatically. Up to now, the international spot price of gold is 2322.59 US dollars/ounce, an increase of more than 16% compared to the beginning of the year, breaking through the 2,300 US dollars/ounce mark and reaching a record high. The average price of Changjiang non-ferrous copper has now reached 7,6020 yuan/ton, which is operating at an all-time high. Mainly due to the tightening of supply-side expectations and a recovery in demand, we expect copper and gold prices to continue to rise, which will strongly support the company's profit level.

The full resumption of production in the Jiama mining area is imminent: production and operation activities in the Jiama mine have been suspended since the tailings spill from the Guolanggou tailings depot. Entering December 2023, the first phase of the Jiama mine officially resumed operation. This resumption of work is due to the treatment of part of the empty mining area and the resumption of operation and production of the first phase of the mineral processing plant. The daily ore processing volume is 6,000 tons. Up to now, the company has issued production guidelines for 2024. It is estimated that the gold production range of the Changshanhao Gold Mine in 2024 will be 10,6097 oz to 112,2528 oz; the copper production range for the Jiama mine will be 43,200 tons to 44,500 tons, and the gold production range is 42,439 oz to 45333 oz. The company expects the Jiama Mine to be approved by the government to resume work in early May. At that time, it will resume production according to the design scale of the Phase 2 plant.

The target price is HK$61.59, maintaining the purchase rating: based on the gradual return of the company's production and operation to the right track with high product prices, we adjusted the revenue forecast for 24/25/26 to 730 million/1,192 million/US$1.23 billion respectively; adjusted the net profit forecast to the mother to reach 114 million/375 million/US$387 million, giving a target price of HK$61.59, corresponding to 9 times PE in 2025, maintaining the purchase rating.