摩根大通在25日发布的研报中认为，JPMorgan believes that Gold has become a key profit driver for the company, contributing 32% of gross profit in fiscal year 2024 (up from 26% in 2023), mainly due to a 28% year-on-year increase in the average selling price. It is expected that Gold production will reach 85 tons in 2025 (a year-on-year increase of 17%), and Copper production will reach 1.15 million tons (a year-on-year increase of 8%).
Despite Copper prices nearing historical highs, JPMorgan believes that Zijin Mining Group's Stocks are still "not expensive" and has given an "Overweight" rating.
On the 21st, Zijin Mining Group announced record performance for 2024, showing that the fiscal year achieved a record Net income of 32.1 billion yuan, a year-on-year increase of 52%. This performance is mainly attributed to strong prices of Copper and Gold as well as stable production growth.
In the Research Report released on the 25th, JPMorgan stated that Gold has become a key profit driver, contributing to 32% of gross profit for the 2024 fiscal year (up from 26% in 2023), mainly due to a 28% year-on-year increase in sales prices; the gross profit of the Copper Business increased by 29%, with sales prices rising by 14% year on year.
It is expected that Gold and Copper production will grow steadily, and the company's Target Price for A-shares has been raised to 25 yuan per share.
JPMorgan pointed out that the unit cost of self-produced Copper for Zijin Mining Group decreased by 1% year-on-year. Net financial costs decreased by 1.2 billion yuan, bringing the borrowing cost rate down to 3.8%. It is expected that by 2025, mining unit costs will slightly increase due to rising wage costs and declining grades, but Zijin Mining Group's good control over sales, management, and financial costs will support robust profit margin performance.
In addition, Zijin Mining Group plans to achieve stable production growth through mine expansions and potential acquisition activities. The report noted that Zijin Mining Group has a good track record in mine expansion and demonstrates excellent cost control, which will support its 8-10% compound annual growth rate over the next few years.
It is expected that Gold production will reach 85 tons (a year-on-year increase of 17%) and Copper production will reach 1.15 million tons (a year-on-year increase of 8%) in 2025. The main mine expansion projects include the third phase of the Kamoa project (expected to achieve a year-on-year production increase of 32% in 2025) and the second phase of the Julong project (expected to be put into production by the end of 2025).
According to JPMorgan's valuation model, the Target Price for Zijin Mining Group A-shares is expected to be 25.00 RMB, with an implied one-year forward PE of 13 times and an EV/EBITDA multiple of 8.9 times.
The Target Price for stocks listed in Hong Kong is 23.70 HKD, with an implied one-year forward PE of 12 times and an EV/EBITDA multiple of 7.7 times. JPMorgan believes that, despite Copper prices being close to historical highs, the valuation of Zijin Mining Group remains attractive.
JPMorgan expects that Zijin Mining Group's adjusted EPS will grow by 10% and 13% in 2025 and 2026, respectively, primarily benefiting from a positive outlook on Copper and Gold prices as well as the company's cost control capabilities.
Edit/New
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
Comment(0)
Reason For Report