Incident: The company announced results for the first quarter of 2024. In 24Q1, the company's revenue was about 1,854 million yuan, +16.83% year over year; net profit to mother was about 210 million yuan, +166.41% year over year.
Volume: Multiple projects are progressing steadily, and mineral gold production continues to increase. 24Q1's mineral gold sales volume was 3.59 and 3.58 tons, respectively, +9.03% and +1.18%. The company plans to produce 16.02 tons of gold in 24, which is expected to increase 11.6% year on year 23. The company's mineral gold production is expected to continue the steady growth trend in '24. Looking forward to the future, in terms of incremental business, the company's gold resources and production are also expected to continue to grow. The domestic mining subsidiary Geelong Mining's “180,000 ton gold ore mining capacity expansion project” and Hanfeng Mining's “kilometer shaft project” will be completed and put into operation one after another, and the Wulong Mining ore processing scale will approach 3,000 tons/day. While stabilizing production in the main mining area, Ghana's Venus Vasa has developed two new underground mining areas in the 242 and B-Shoot Nanyan regions, and has begun mining production. Vientiane mining in Laos will further improve the recovery rate and reduce costs through refining concentrate regrinding technology and resin beneficiation to replace carbon immersion processes, and continue to increase the amount of gold and copper resources through new exploration projects. It can be expected that multiple projects will steadily advance growth.
Costs: Sales costs and overall maintenance costs have risen, and mines in China have risen markedly. 24Q1's mineral gold sales costs and full maintenance costs were 300.51 and 272.54 yuan/gram, respectively, +4.27% and +1.87% compared with the same period last year. The sales cost and full maintenance cost of mining gold in China were +7.11% and +21.57%, respectively, mainly due to the phased decline in ore grade during the reporting period. In terms of overseas mine costs, Vientiane Mining's 24Q1 sales costs and full maintenance costs were -5.47% and -1.60% respectively, up and down -1.35% and -2.44% respectively from the full year of the previous year. Sales costs and full maintenance costs of Venus Wasa 24Q1 after excluding exchange rate effects were +7.59% and -1.82%, respectively, up and down +0.62% and -2.19%, respectively, from the full year of the previous year. Overall, the 24Q1 cost increase is mainly due to the phased decline in domestic mine ore grades. Looking forward to the future, we believe that the company's rising cost trend is expected to be gradually controlled, and subsequent costs are expected to return to normal levels.
Profit forecast: In 2024-2026, we expect the company's EPS to be 0.93, 1.08, and 1.19 yuan, respectively, and PE will be 19, 17, and 15 times, respectively, maintaining a “buy” rating.
Risk warning: Macroeconomics causes gold price fluctuations, projects falling short of expectations, cost disturbances, exchange rate risks, etc.