Zijin Mining released the 2024 three-quarter report

The company achieved revenue of 230.396 billion yuan in the first three quarters of 2024, +2.39% year over year; realized net profit to mother 24.357 billion yuan, +50.68% year over year. Among them, Q3 achieved revenue of 79.98 billion yuan, +7.11% YoY, +5.74% month-on-month; realized net profit to mother of 9.273 billion yuan, +58.16% YoY and +5.09% month-on-month.

Both gold, silver, and copper have increased. In terms of rising gold prices driving profits to increase production, mineral gold/copper/silver production in the first three quarters of 2024 was +8%/+5%/+7% year-on-year, respectively. Among them, the production of gold, copper, and silver in single Q3 was +1%/+6%/+12% month-on-month compared to Q2. In terms of price, according to the closing price of the Shanghai Gold Exchange, the average price of gold in the first three quarters of 2024 was about 527 yuan/gram, +27.3% year over year. The average price of gold in a single Q3 was about 569.4 yuan/gram, +23.87% year over year, and +3.04% compared to the second quarter. The closing price of gold on October 18, 2024 was 616.83 yuan/gram, which is a significant increase from the previous three quarters. We believe that Q4 gold prices are expected to remain high, leading to an increase in annual performance.

Acquire gold mines in Ghana and continue to expand overseas resource allocation

The company announced on October 9 that it intends to acquire 100% interest in the AkyeM gold project in Ghana for 1 billion US dollars through a wholly-owned overseas subsidiary. According to the announcement, as of the end of 2023, Akyem's proven, control+ estimated amount of gold resources (excluding reserves) was 54.4 tons of gold metal, and the confirmed + credible reserves were 34.6 tons of gold metal, and about 83 tons of gold were classified as ground mining resource reserves, which are expected to be upgraded to resources after further encrypted drilling and exploration. Akyem's gold production from 2021 to 2023 was 11.9 tons, 13.1 tons, and 9.2 tons, respectively, and there are prospects for continuous development in the future.

Investment advice

We expect the company's net profit for 2024-2026 to be 31.815/36.72/40.575 billion yuan, respectively (previous value was 31.714/35.345/38.284 billion yuan, considering the increase in the contribution of newly acquired gold mines), and the corresponding PE will be 15/13/12 times, respectively, maintaining a “buy” rating.

Risk warning

Metal prices fluctuate greatly; project construction progress falls short of expectations; overseas mine operation risks, etc.