Third quarter results: In the first three quarters of 2024, the company achieved operating income of 230.396 billion yuan, up 2.39% year on year; net profit to mother was 24.357 billion yuan, up 50.68% year on year; in the third quarter, the company's revenue was 79.98 billion yuan, up 7.11% year on year; net profit to mother was 9.273 billion yuan, up 63.64% year on year.

The continued rise in gold and copper prices led to an increase in profits: with the determination of the direction of interest rate cuts by the Federal Reserve and safe-haven demand brought about by political and economic uncertainty, the price of gold continued to operate at a high level this year. Currently, the closing price of spot gold in London reached 2648.8 US dollars/ounce, up 13.64% from the end of June. The continued rise in gold prices contributed to the company's performance growth in the third quarter; the average price of Changjiang non-ferrous copper has now reached 0.0767 million yuan/ton and is operating at an all-time high. Mainly due to the tightening of supply-side expectations and recovery in demand, we expect copper and gold prices to continue to rise, which will strongly support the company's profit level.

Gold and copper production continued to rise at a stable cost level: the company's main product output in the first three quarters: mineral gold production was 54.3 tons, up 8.33% year on year; mineral silver production was 331.1 tons, up 6.69% year on year; mineral copper was 789,459 tons, up 4.67% year on year; mineral zinc was 309,735 tons, down 4.18% year on year. In terms of cost, the company's unit sales costs for copper concentrate, electrodeposited copper and electrolytic copper in the first three quarters were 0.0188/0.0327/0.0357 million yuan/ton, respectively, with year-on-year changes of -4.16%/+5.49%/-13.05%, respectively. The unit sales cost of gold ingots and gold concentrate was 286.46/155.06 yuan/gram respectively, with year-on-year changes of +1.32%/-0.54%, respectively. As the company's production is expected to continue to rise in the fourth quarter, it is expected that the company's costs will still have room to decline.

The new project helped increase the company's gold production: The company announced in October that it had acquired 100% of the shares in the Akyem gold mine project in Ghana. As of December 31, 2023, Akyem's proven, control+ inferred amount of gold metal resources (excluding reserves) was 54.4 tons, verified+credible gold metal reserves of 34.6 tons, and an underground gold resource reserve of about 83 tons, which is expected to be upgraded to resources later. After the company designs and transforms the mine in the future, it is expected that the open pit mining period will be extended, and the gold production level will be maintained at 8-10 tons in the future.

Target price of HK$22.34, maintaining purchase rating: Based on the steady progress of the company's project construction and the gradual release of ore production in the future, gold and copper prices are expected to remain high in the short to medium term to drive overall profit growth. We adjusted the 2024-2026 revenue forecast to 325.8 billion/362.5 billion/3792 yuan respectively; adjusted the net profit forecast to mother to 30 billion/38.6 billion/41.9 billion yuan, corresponding 18x PE in 2024, maintaining the buy rating.