Volume and price have risen sharply, and profits have grown rapidly. In 2023, the company achieved operating income of $59.275 billion, +17.83% year over year; net profit to mother of 2,328 billion yuan, +86.57% year over year; net profit after deduction of 2,213 billion yuan, +69.47% year over year. Among them, Q4 achieved operating income of 17.952 billion yuan, +71.30% YoY, +29.17%; net profit to mother of 983 million yuan, +77.13% YoY, +111.11% month-on-month; net profit after deduction of 934 million yuan, +69.85% YoY and +134.38% month-on-month.
In 2023, the company's mineral gold production was 41.78 tons, up 8.03% year on year. The average annual spot price of gold in 2023 was 449.68 yuan/gram, up 14.7% year on year.
It extends endogenously and continues to expand gold reserves. The company is a leader in China's gold industry, and continues to enrich its gold reserves through various methods such as external mergers and acquisitions, internal exploration and additional reserves, and group asset injection.
The acquisition of Yintai Gold's controlling interest was completed in 2023, and the mining rights for the Gansu Bridge Project were auctioned to promote the injection of mineral rights into the Yanshan mining area in the Penglai region, which belongs to the Gold Group. It will integrate and develop existing mineral rights in Penglai Mining to exert synergy effects. The company completed 480,000 meters of prospecting projects throughout the year, invested 570 million yuan in prospecting capital, and added 36.6 tons of gold metals. The prospecting results were remarkable, further extending the mine's service life and promoting the sustainable development of the mine. As of 2023, the company has resources and equity with a metal volume of 1282.96 tons (excluding Yintai Gold), and Yintai Gold has a resource volume of 156.78 tons of gold metal. In addition, Yintai Gold plans to achieve 240 tons of gold resources and reserves in 2025 and 300 tons in 2026.
By speeding up the construction of key projects, mineral gold production is expected to continue to increase. The construction of the Sanshan Island Gold Mine auxiliary well shaft reached an elevation of -1,260 meters. The Jiaojia Gold Mine Zhuguolijia auxiliary well project and the Sizhuang mining area production system were accurately completed, the new main well of the Xincheng Gold Mine was capped 22 days ahead of schedule, Xinhui Company's new main and auxiliary well -870 meter mid-section completion project achieved accurate completion ahead of schedule, and the Namutini mine project of Ghana's Katino Resources Company progressed rapidly. The Katino gold mine in Ghana is expected to be put into operation as early as 2025, with an average annual output of 8.9 tons of gold after production. The holding subsidiary Yintai Gold plans to produce 12 tons and 15 tons of mineral gold in 2025 and 2026, respectively, and 7.01 tons in 2023.
Investment advice: Through external acquisitions, internal exploration and additional reserves, and group asset injection, the company's future mineral gold resources and production have the potential for sustainable growth. The Federal Reserve is expected to start cutting interest rates during the year, and the price of gold is expected to continue to rise during the interest rate cut cycle. The company's revenue for 2024-2026 is estimated to be 723.68/784.21/82.004 billion yuan, respectively, net profit to mother of 44.55/ 58.21/6.621 billion yuan, and EPS of 1.00/1.30/1.48 yuan/share, respectively. Maintain the company's “buy” rating.
Risk warning: Gold prices have dropped sharply, project progress falls short of expectations, production falls short of expectations