Goldman Sachs released a report, $ZIJIN MINING (02899.HK)$ The management attended the investor conference held by the bank on Wednesday (the 11th) and reported positive results from the cost reduction measures implemented by the company. It is expected that the total unit production cost of copper concentrate in 2024 will be 18,500 yuan per ton, and the unit production cost of mineral copper will be 22,400 yuan per ton, representing a 7% and 4% annual reduction respectively. Zijin's unit production cost of copper concentrate in the first half of this year decreased by 8.8% on a half-yearly basis, mainly from overseas projects.

In terms of dividend policy, Zijin has set the minimum payout ratio at 30% and will balance capital spending to increase the dividend yield. Goldman Sachs believes that as one of the world's largest copper miners and gold producers, Zijin's copper production in 2023 was 1.007 million tons, and gold production was 68 tons. The company's mineral copper production is expected to increase from 1 million tons in 2023 to 1.1 million tons in 2024, and is projected to further increase to 1.2 million tons by 2025. The bank forecasts that by 2026, Zijin Mining's gold and copper production will reach 91 tons and 1.5 million tons respectively, placing it among the top five gold producers and top three copper producers globally.

The bank believes that Zijin Mining is one of the few mining companies that can benefit from production growth and rising commodity prices. In the event of an increase in copper prices, the bank expects Zijin's net income to increase from 22.4 billion in 2023 to 41.4 billion yuan by 2026, with a compound annual growth rate of 23%. The bank maintains a 'buy' rating for Zijin's H shares (buy conviction list) with a target price of 21.5 Hong Kong dollars, and considers its current valuation to be attractive. The bank believes that the continued execution of new project expansions and the rise in copper prices will act as catalysts.