Guotai Junan (Hong Kong) analyst Leung Kin-man said that Lingbao Gold (03330-HK) achieved net profit of 118 million yuan in 2009, up 2.1% from the previous year, 51% lower than market expectations, and 30% lower than the bank's forecast.

According to Liang Jianwen, there are two main reasons why the company's performance fell short of expectations: first, the company's accounts receivable and investment capital margin impairment losses from Beijing Jiuyi Company reached 110.8 million yuan, equivalent to 94% of the company's net profit; second, the company recorded other net losses of about 191 million yuan, mainly derivatives investment losses of about 163 million yuan.

The analyst pointed out that the company's closing price before it was suspended was equivalent to 10 times its price-earnings ratio in 2010, which was significantly lower than its peers. Due to its low ore self-sufficiency rate and relatively high unit cost, the company's stock price was often discounted by more than 30% compared to peers such as Zhaojin Mining (01818-HK) and Zijin Mining (02899-HK). The company currently targets HK$3.4 and is rated as “Collection”.

Lingbao Gold announced that as of the results for the full year ending December 2009, shareholders' profit should be 118 million yuan (RMB, same below), up 2.11% from 116 million yuan in the same period in 2008. The profit per share was 15 points. It is recommended to pay a final interest of 5 per share; the turnover during the period increased 11.31% to 3,962 million yuan.