Summary of Zijin Mining Conference Call Company Overview - **Company**: Zijin Mining (2899 HK/601899 CH) - **Industry**: Metals & Mining Key Financial Results - **3Q25 Net Profit**: RMB 14.6 billion, an increase of 11% quarter-on-quarter (q-o-q) and 57% year-on-year (y-o-y) [1][10] - **Mined Gold Sales Volume**: Increased by 9% q-o-q and 27% y-o-y [1] - **Mined Copper Sales Volume**: Remained flat q-o-q but increased by 8% y-o-y [1] - **Average Selling Price (ASP) of Mined Gold**: Increased by 4% q-o-q and 43% y-o-y [1] - **Unit Cost of Mined Gold**: Increased by 3% q-o-q and 20% y-o-y to approximately RMB 280/g [1] - **Gross Margin for Mined Gold**: Improved to 63.6%, up 7 percentage points (ppt) y-o-y, flat q-o-q [1] Strategic Outlook - **Output Targets**: - Copper: 1.5-1.6 million tons (mt) by 2028, revised target for 2025 to 1.1 mt [2] - Gold: 100-110 tons by 2028, with Zijin Gold International targeting approximately 100 tons annually by 2030 [2] - **Cost Management**: Focus on cost optimization before scaling lithium output, with full-year cost inflation for gold and copper expected to remain within 5-8% y-o-y [2] - **Earnings Momentum**: Anticipated sustained gold price strength and operational efficiency improvements to support earnings in 4Q25 and FY26 [2] Investment Ratings and Target Prices - **Rating**: Maintain Buy on H/A shares [3] - **Target Prices**: - H-share: Increased to HKD 43.00 from HKD 41.80, implying a 33% upside [3][5] - A-share: Increased to RMB 39.20 from RMB 38.00, implying a 32% upside [3][5] Financial Projections - **Earnings Growth**: Projected compound annual growth rate (CAGR) of 31% for 2024-2027 [3] - **Earnings Estimates**: Increased for 2025/26/27 by 5%/10%/6% respectively [3][23] Risks and Challenges - **Potential Risks**: - Delays in new capacity construction - Lower metal prices - Geopolitical conflicts affecting overseas operations - Overambitious mergers and acquisitions (M&A) impacting financials - Rising production costs due to inflation and stricter regulations [26] Additional Insights - **One-off Gains**: Approximately RMB 1.5 billion from changes in fair value of financial assets [1] - **Market Capitalization**: Approximately HKD 872.25 billion (USD 112.29 billion) [6] - **Free Float**: 77% for both H and A shares [6] This summary encapsulates the key points from the conference call, highlighting Zijin Mining's financial performance, strategic outlook, investment ratings, and associated risks.

Core Viewpoint - The company reported strong financial performance for the first three quarters of 2025, with significant increases in revenue and net profit, indicating robust operational growth and effective cost management [1][4]. Financial Performance - For the first three quarters of 2025, the company achieved operating revenue of 254.2 billion yuan, a year-on-year increase of 10.3% [1] - The net profit attributable to shareholders reached 37.864 billion yuan, up 55.4% year-on-year [1] - The net profit after deducting non-recurring items was 34.127 billion yuan, reflecting a year-on-year increase of 43.7% [1] - In Q3 2025, the company reported operating revenue of 86.489 billion yuan, a year-on-year increase of 8.14% but a quarter-on-quarter decrease of 2.58% [1] - The net profit for Q3 was 14.6 billion yuan, showing a year-on-year increase of 57% and a quarter-on-quarter increase of 11% [1] Production and Pricing - The company experienced growth in production volume and prices for its main products during the first three quarters of 2025: - Copper production was 830,000 tons, a 5% increase year-on-year [2] - Gold production was 6500 tons, a 20% increase year-on-year, driven by new acquisitions and increased processing capacity [2] - Zinc production decreased by 12% to 270,000 tons [2] - Lithium carbonate production was 11,000 tons [2] - Average prices for key metals showed positive trends: - SHFE copper average price was 78,302 yuan/ton, up 4.6% year-on-year [2] - SHFE gold average price was 749 yuan/gram, up 39% year-on-year [2] - SHFE silver average price was 8,635 yuan/kilogram, up 22.6% year-on-year [2] - SHFE zinc average price was 22,829 yuan/ton, up 0.6% year-on-year [2] Cost Management - The company maintained relatively controlled costs for its products: - Copper sales costs were 21,000 yuan/ton for copper concentrate, 32,000 yuan/ton for electrolytic copper, and 36,000 yuan/ton for refined copper, with varying year-on-year changes [3] - Gold sales costs were 330 yuan/gram for gold ingots and 186 yuan/gram for gold concentrates, with increases of 15% and 20% respectively [3] - Zinc sales costs were 10,100 yuan/ton, up 18% year-on-year [3] Future Development - The company has strengthened its foundation for sustainable development through several major acquisitions, including the Ghana Akim gold mine and others, enhancing its resource reserves in gold, copper, lithium, and molybdenum [4] - Key projects such as the Jilong copper mine and the Junuo copper mine are progressing well, with the second phase of the Jilong copper mine expected to be completed by the end of 2025 [4] - The lithium carbonate segment is advancing, with a new lithium project in Argentina starting production at the end of Q3 2025 [4] Profit Forecast and Investment Recommendation - The company is expected to achieve net profits of 51.4 billion yuan, 66 billion yuan, and 70.5 billion yuan for 2025, 2026, and 2027 respectively, reflecting an optimistic outlook based on rising gold and copper prices [4] - The current stock price of 29.45 yuan corresponds to a PE ratio of 15, 12, and 11 for the next three years, indicating a favorable investment opportunity [4]

Investment Rating - The investment rating for Zijin Mining is "Buy" (maintained) [1][12] Core Views - The report highlights that Zijin Mining's production expansion is progressing steadily, with expected profitability elasticity [4][6] - The company achieved a revenue of 254.2 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 10.3%, and a net profit attributable to shareholders of 37.864 billion yuan, up 55.4% year-on-year [4][6] - The report anticipates continued growth in gold and copper production, with rising prices expected to support performance [7] Financial Performance Summary - **Revenue Forecasts**: - 2023A: 293.403 billion yuan - 2024A: 303.640 billion yuan - 2025E: 358.910 billion yuan - 2026E: 447.245 billion yuan - 2027E: 485.077 billion yuan - Growth rates: 2024A +3%, 2025E +18%, 2026E +25%, 2027E +8% [1] - **Net Profit Forecasts**: - 2023A: 21.119 billion yuan - 2024A: 32.051 billion yuan - 2025E: 51.429 billion yuan - 2026E: 65.983 billion yuan - 2027E: 70.511 billion yuan - Growth rates: 2024A +52%, 2025E +60%, 2026E +28%, 2027E +7% [1] - **Earnings Per Share (EPS)**: - 2023A: 0.79 yuan - 2024A: 1.21 yuan - 2025E: 1.94 yuan - 2026E: 2.48 yuan - 2027E: 2.65 yuan [1] - **Price-to-Earnings (P/E) Ratio**: - 2023A: 37.1 - 2024A: 24.4 - 2025E: 15.2 - 2026E: 11.9 - 2027E: 11.1 [1] - **Price-to-Book (P/B) Ratio**: - 2023A: 7.3 - 2024A: 5.6 - 2025E: 4.4 - 2026E: 3.4 - 2027E: 2.7 [1] Production and Cost Analysis - **Production Volumes**: - Copper: 830,000 tons in the first three quarters of 2025, up 5% year-on-year - Gold: 65 tons, up 20% year-on-year - Zinc: 270,000 tons, down 12% year-on-year - Lithium: 11,000 tons [6] - **Cost Control**: - The sales cost for copper, gold, and zinc has been relatively controlled, with specific costs showing manageable increases [6][7] Strategic Developments - The company has completed significant acquisitions, enhancing its resource reserves in gold, copper, lithium, and molybdenum, with ongoing projects expected to contribute to production and profits [6][7]

Core Insights - The global gold market is experiencing a historic surge, with international gold prices rising over 50% and setting new records in 2025 [1] - Domestic gold mining companies, such as Zijin Mining and Zhaojin Mining, reported explosive growth in their Q3 2025 earnings, with net profit increases of 57.14% and 206.58% respectively [1] Zijin Mining Highlights - Zijin Mining's Q3 2025 report shows a net profit of 145.72 billion yuan, a 57.14% year-on-year increase, with total revenue reaching 254.2 billion yuan [2][4] - The company's gold production for the first nine months of 2025 was 65 tons, a 20% increase, driven by new acquisitions and increased processing capacity [5] - Zijin Mining successfully spun off its subsidiary, Zijin Gold International, to the Hong Kong Stock Exchange, setting a record for IPO size in the global gold mining industry [5] Zhaojin Mining Highlights - Zhaojin Mining's Q3 2025 report indicates a net profit of 37.46 million yuan for the quarter, reflecting a 206.58% year-on-year increase, with total revenue of approximately 340 million yuan, up 119.51% [6] - The growth was primarily attributed to increased sales from its Fiji Vatukoula Gold Mine, which sold 14,530.26 ounces of gold, a 61.34% increase [6] - The company improved its asset structure by disposing of a subsidiary, resulting in a 30.82% decrease in financial expenses [6] Market Dynamics - The current gold price is fluctuating around 4,400 USD/ounce, with significant volatility observed, including a 300 USD/ounce drop in a single day [7][8] - Factors driving gold prices include global economic uncertainty, expectations of Federal Reserve interest rate cuts, and geopolitical tensions, leading to increased demand for gold as a safe-haven asset [7] - The sustainability of high gold prices remains a concern, with rising production costs and potential market corrections posing risks to mining companies [9]

Core Viewpoint - Zijin Mining's copper production has decreased due to the impact of the Kamoto Copper Mine, while gold production has steadily increased [1] Group 1: Production and Financial Performance - In Q3 2025, Zijin Mining achieved copper production of 263,100 tons, representing a year-on-year decrease of 2.89% and a quarter-on-quarter decrease of 5.81% [1] - The company has seen significant capital operation results, with its subsidiary Zijin Gold International successfully listing on the Hong Kong Stock Exchange on September 30, raising HKD 28.7 billion through the issuance of 401 million shares at HKD 71.59 per share [1] - This IPO set records as the largest in the global gold mining industry, the largest for a Chinese mining company overseas, and the second largest globally in 2025 [1] Group 2: Investment and Revenue Forecast - The IPO attracted 26 top global institutions as cornerstone investors, who subscribed for USD 1.6 billion, accounting for 50% of the base offering [1] - Due to the increase in gold and copper prices in Q3, the company has raised its profit forecast, projecting revenues of CNY 352.683 billion, CNY 387.977 billion, and CNY 406.642 billion for 2025-2027, with net profits attributable to shareholders of CNY 53.441 billion, CNY 63.285 billion, and CNY 71.034 billion respectively [1] - The current stock price corresponds to price-to-earnings ratios of 14.9, 12.6, and 11.2 times for the years 2025, 2026, and 2027 [1]

Core Viewpoint - The report from Huaxin Securities indicates that Zijin Mining's copper production has decreased due to the impact of the Kamoto Copper Mine, while gold production has steadily increased [1] Group 1: Production Performance - In Q3 2025, the company achieved copper production of 263,100 tons, representing a year-on-year decrease of 2.89% and a quarter-on-quarter decrease of 5.81% [1] - The company's gold production has shown a steady increase during the same period [1] Group 2: Capital Operations - Zijin Gold International, a subsidiary of the company, successfully listed on the Hong Kong Stock Exchange on September 30, issuing 401 million shares at HKD 71.59 per share, raising HKD 28.7 billion [1] - This IPO set records as the largest in the global gold mining industry, the largest for a Chinese mining company overseas, and the second largest globally in 2025 [1] - The issuance was supported by 26 top global institutions, which subscribed to USD 1.6 billion, accounting for 50% of the base offering [1] Group 3: Financial Forecast - Due to the increase in gold and copper prices in Q3, the company has raised its profit forecast [1] - Projected revenues for 2025, 2026, and 2027 are expected to be CNY 352.683 billion, CNY 387.977 billion, and CNY 406.642 billion, respectively [1] - Projected net profits attributable to shareholders for the same years are CNY 53.441 billion, CNY 63.285 billion, and CNY 71.034 billion, respectively [1] - The current stock price corresponds to price-to-earnings ratios of 14.9, 12.6, and 11.2 times for 2025, 2026, and 2027 [1] Group 4: Investment Rating - The investment rating is maintained at "Buy" [1]

Core Viewpoint - The report from Jefferies indicates that Zijin Mining's (601899) (02899) net profit after tax for Q3 reached 14.6 billion RMB, reflecting a quarter-on-quarter increase of 11% and a year-on-year increase of 57%, slightly exceeding expectations [1] Financial Performance - The recurring net profit after tax was 12.5 billion RMB, with a quarter-on-quarter increase of 6% and a year-on-year increase of 50%, aligning with expectations [1] - The target price for Zijin's H-shares has been raised from 29.6 HKD to 38.1 HKD, while the A-shares target price has increased from 27.3 RMB to 35.2 RMB, both maintaining a "Buy" rating [1] Production Metrics - Gold production for the period was 23.8 tons, showing a quarter-on-quarter increase of 7% and a year-on-year increase of 26%, with a cumulative year-to-date increase of 20% [1] - Following the acquisition of the Raygorodok gold mine in Kazakhstan, the company expects total gold production to exceed the guidance of 85 tons, now estimated at approximately 89 tons for the year [1] - Copper production guidance has been revised down from 1.15 million tons to 1.10 million tons for the year, with a further reduction to 1.07 million tons anticipated for 2024; however, the impact on profitability is expected to be limited due to rising copper prices offsetting the production decline [1]

Core Viewpoint - The report from Jefferies indicates that Zijin Mining's net profit after tax for Q3 reached 14.6 billion RMB, showing a quarter-on-quarter increase of 11% and a year-on-year increase of 57%, slightly exceeding expectations [1] Financial Performance - The recurring net profit after tax for Zijin Mining was 12.5 billion RMB, with a quarter-on-quarter increase of 6% and a year-on-year increase of 50%, aligning with expectations [1] - The target price for Zijin's H-shares has been raised from 29.6 HKD to 38.1 HKD, while the target price for A-shares has increased from 27.3 RMB to 35.2 RMB, both maintaining a "Buy" rating [1] Production Metrics - Gold production for the period was 23.8 tons, reflecting a quarter-on-quarter increase of 7% and a year-on-year increase of 26%, with a cumulative increase of 20% in gold production for the first three quarters of the year [1] - Following the acquisition of the Raygorodok gold mine in Kazakhstan, the company expects total gold production to exceed the guidance of 85 tons, now estimated at approximately 89 tons for the year [1] - Copper production guidance has been revised down from 1.15 million tons to 1.10 million tons for the year, with a further reduction to 1.07 million tons for 2024; however, the impact on profitability is expected to be limited due to rising copper prices offsetting the decline in production [1]

Core Viewpoint - The optimistic mid-term outlook for copper prices supports the continued profitability momentum of Zijin Mining, which may lead to a further revaluation of the stock [1] Group 1: Company Performance - Zijin Mining has downgraded its 2025 group copper production forecast due to a flooding incident at one of its mines [1] - Despite the production downgrade, the company indicates that frequent severe disruptions in global mining production may keep supply tight and support long-term prices [1] - Strong fundamentals in gold and copper have reaffirmed Zijin Mining's robust nine-month performance, confirming its profit visibility [1] Group 2: Analyst Recommendations - Daiwa Capital Markets has raised the target price for Zijin Mining's H-shares from HKD 29.70 to HKD 37.80 while maintaining a buy rating [1]

Core Viewpoint - Zijin Mining (601899) reported a revenue of 254.2 billion RMB for the first three quarters of this year, representing a year-on-year increase of 10.33%, and a net profit attributable to shareholders of 37.864 billion RMB, up 55.45% year-on-year [1] Financial Performance - In Q3 alone, Zijin Mining achieved a revenue of 86.489 billion RMB, which is a quarter-on-quarter decline of 2.58%, while the net profit attributable to shareholders was 14.572 billion RMB, reflecting a quarter-on-quarter increase of 11.02% [1] - The better-than-expected net profit in Q3 was primarily driven by non-operating income exceeding market expectations [1] Future Projections - Based on the strong non-operating income in Q3 and rising copper and gold prices, the bank has raised its net profit forecasts for Zijin Mining for 2025 and 2026 by 11.2% and 18.8%, respectively, to 50.91 billion RMB and 65.09 billion RMB [1] - The H-share target price has been increased by 33% to 40 HKD, while the A-share target price has been raised by 31% to 38 RMB [1]