Key points of investment:
A metal mining giant that is at the forefront of the world
After more than 30 years of development, the company has grown from a small mining enterprise in a county to a large-scale multinational mining group with more than 30 large and very large mineral resource development bases around the world. China is leading in the amount of copper and gold resources and production capacity, ranking in the top ten in the world. In 2024, the company's revenue/net profit to mother was 747.77/6.261 billion yuan respectively, or -0.22%/+15.05% year-on-year, respectively.
Copper and gold prices are expected to be strong, and both varieties of copper are expected to enjoy a high boom: short-term mining disruptions continue, cost-side copper mine grade declines and resource nationalism supports prices; lower capital expenditure on global copper companies limits new supply, and emerging fields such as electric vehicles are expected to open up demand space, and supply and demand in the industry will be tight in the future; overall, copper prices are expected to remain high. Gold: The interest rate hike cycle is coming to an end. There is a high probability that interest rates will be cut for the first time in the second half of the year, and the price of gold is expected to reach an inflection point before the Federal Reserve's monetary policy; geopolitical risks and safe-haven demand brought about by the general election will stimulate gold prices; America's high debt and deficit rate, and demand for gold purchases from central banks in emerging economies are all expected to raise the long-term gold price center.
Innovation+management drives the increase in storage and production, and the company's growth space can be expected. We believe that technological innovation, efficient management, countercyclical mergers and acquisitions, low-cost exploration and low production costs are the core elements of Zijin Mining's growth into a mining giant, and will also help the company continue to expand and develop in the future.
The average annual growth rate of the company's copper, gold, zinc/lead, silver, lithium, and molybdenum production in 2024-2028 is expected to reach 8.94%, 9.08%, 4.12%, 9.55%, 146.86%, and 30.26%, respectively.
Profit forecasting and investment advice
Under a neutral scenario, we expect the company's 2024-2026 net profit to be 257.77/320.86/37.938 billion yuan, EPS of 0.97/1.21/1.43 yuan/share, respectively, and the corresponding PE is 17.42X/14.00X/11.84X, respectively. The company is a leading metal company in China, and still has great potential for growth. It is expected to become a world-class mining enterprise, receiving an “increase in wealth” rating for the first time.
Risk warning
Geopolitical risk, product price risk, community and social relationship risk, and risk of a project falling short of expectations.