Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - The company reported significant improvement in performance for the third quarter, with revenue reaching 8.644 billion yuan, a year-on-year increase of 38.91%, and a net profit attributable to shareholders of 2.058 billion yuan, up 79.26% year-on-year [3][4] - The increase in production and sales of gold, along with rising international gold prices, contributed to the strong performance, with the average selling price of gold rising to 729.58 yuan per gram, a 44.13% increase compared to the same period last year [4][10] - The company is expected to continue increasing production in the fourth quarter to meet its annual production target of 16 tons [3] Summary by Sections Financial Performance - For the first three quarters, the company achieved a revenue of 8.644 billion yuan, with a quarterly revenue of 3.372 billion yuan in Q3, reflecting a 66.39% year-on-year growth [3][4] - The net profit for Q3 was 1.432 billion yuan, marking a 115.45% increase year-on-year [3][4] - The production of gold in Q3 was 3.95 tons, a 15.68% increase from Q2, while sales reached 3.9 tons, up 13.7% [3][4] Cost and Production Insights - The operating cost for gold production increased to 326.86 yuan per gram, a 16.09% rise compared to the previous year [4] - The company’s main gold mine, the Ghana Vasa Gold Mine, saw its operating costs rise significantly due to various factors, including increased tax rates and lower ore grades [4] Project Development - Key projects are progressing steadily, with the Five Dragon Mining Company enhancing its processing capacity to 3,000 tons per day [5] - The company is expanding its mining rights and production capabilities in various areas, indicating potential future resource increases [5][8] Future Outlook - The company’s revenue projections for 2025-2027 are 13.22 billion yuan, 15.32 billion yuan, and 17.10 billion yuan, respectively, with net profits expected to reach 3.247 billion yuan, 4.081 billion yuan, and 4.912 billion yuan [10][12] - The expected earnings per share (EPS) for 2025 is 1.71 yuan, with a price-to-earnings (P/E) ratio of 17.4 times based on the closing price on October 27, 2025 [10][12]

Inflation Data - The U.S. September CPI year-on-year is 3.0%, lower than the expected 3.1% and previous 2.9%[3] - The month-on-month CPI is 0.3%, matching the expected and previous values of 0.4%[3] - Core CPI year-on-year is also 3.0%, below the expected 3.1% and the previous 3.1%[3] Market Reactions - The lower-than-expected CPI data has increased market expectations for interest rate cuts by the Federal Reserve[3] - Following the data release, U.S. stock indices rose, while U.S. Treasury yields and the dollar saw slight increases[3] Energy and Food Prices - Energy prices rose significantly, with a month-on-month increase of 1.5%, up from 0.7% in the previous month[4] - Gasoline prices surged by 4.1%, contributing approximately one-third to the overall CPI increase[4] - Food CPI month-on-month decreased to 0.2%, down from 0.5% in the previous month, indicating a weakening impact from tariffs[4] Core Components - Core goods prices showed slight fluctuations, with a month-on-month increase of 0.2%, down from 0.3%[5] - Used car prices fell significantly by 0.4%, while new car prices increased by 0.2%[5] - Housing prices remained stable, with a month-on-month increase of 0.2%, down from 0.4%[5] Economic Outlook - The moderate inflation performance creates conditions for the Federal Reserve to consider easing monetary policy[5] - Upcoming economic indicators to watch include the FOMC meeting on October 29 and the Q3 GDP release on October 30[5]

Economic Overview - In Q3, the actual GDP growth rate slowed to 4.8%, with a cumulative growth rate of 5.2%[3] - Nominal GDP growth rate was 3.7%, with a cumulative growth rate of 4.1%, indicating a "volume increase and price drop" pattern[3] - The GDP deflator narrowed to -1.1%, reflecting a decrease in price levels[3] Production Insights - In September, industrial added value grew by 6.5% year-on-year, exceeding market expectations and increasing by 1.3 percentage points from the previous month[4] - The service production index maintained stability with a year-on-year growth rate of 5.6%[4] - Mining and manufacturing sectors saw growth rates of 6.4% and 7.3%, respectively, while the electric heat and water industry dropped to 0.6%[4] Investment Trends - Fixed asset investment showed a negative growth of -7.1% in September, with a cumulative growth rate of -0.5%[5] - Infrastructure investment slowed significantly, with broad and narrow infrastructure cumulative growth rates at 3.3% and 1.1%, respectively[5] - Real estate investment fell sharply by -21.3% in September, with cumulative growth at -13.9%[20] Consumption Patterns - Retail sales growth slowed to 3.0% year-on-year in September, down 0.4 percentage points from the previous month[31] - Restaurant consumption growth was only 0.9%, a decline of 1.2 percentage points from the previous month[31] - Consumer electronics, particularly home appliances, saw a significant drop in growth to 3.3%, down 11.0 percentage points[31] Future Outlook - The implementation of 500 billion yuan in policy financial tools is expected to effectively stimulate infrastructure investment and alleviate current downward pressure on investment[7] - Close attention is needed on the progress of policy implementation and its transmission effects on the real economy[7]

Investment Rating - The investment rating for the company is "Buy (First Coverage)" [6] Core Views - The company has undergone significant changes, transitioning to a new operational phase under the leadership of Shudao Group, which has become the controlling shareholder. The focus is on whether the company can achieve a rebirth after overcoming past challenges [3][21] - The development of the Duolong Copper Mine is a key factor in the company's long-term growth prospects, as it is the largest undeveloped copper mine in China, expected to significantly enhance the company's production capacity and profitability [4][5] Summary by Sections Historical Development - The company has experienced both peaks and troughs throughout its history, and it is now entering a new phase of operations under Shudao Group's guidance [3][14] Shudao Group's Entry - The entry of Shudao Group has allowed the company to shed historical burdens, resolving long-standing litigation and debt issues, and improving liquidity and capital structure [8] - Potential integration of mining resources from Shudao Group could enhance the company's phosphate chemical business, which currently faces challenges due to a lack of upstream resources [8] - The collaboration between resources and market opportunities is expected to transform the existing business model, addressing issues related to raw material supply, market expansion, and product consumption [8] Duolong Copper Mine Development - The long-term supply of copper is expected to face bottlenecks, with price expectations trending upwards. The development of the Duolong Copper Mine is anticipated to open up significant growth opportunities for the company [5][9] - The estimated annual production from the Duolong Copper Mine is projected to be between 263,700 to 273,400 tons of copper, along with gold and silver production, contributing significantly to the company's profitability [5][9] Existing Business - The company's current operations focus on phosphate chemicals and zinc smelting, with zinc smelting primarily contributing to revenue but facing limited profitability. The phosphate chemical segment is expected to improve with potential resource integration [9][10] - The company is projected to achieve revenues of 3.561 billion, 3.729 billion, and 3.741 billion yuan from 2025 to 2027, with net profits gradually improving [11][10] Profit Forecast and Investment Recommendations - The company is expected to enter a positive growth trajectory in profitability due to improved liquidity and operational stability, with net profits projected to reach 30-40 billion yuan in the long term if the Duolong project is successfully developed [10][11]

Summary of Key Points 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core View of the Report The fiscal revenue growth rate continues to improve, with an enhanced contribution from tax revenues. The overall fiscal expenditure progress is slow, but the decline in infrastructure - related expenditures has narrowed. Government - funded funds show a divergence between revenue and expenditure, with revenue lagging behind expenditure. In the fourth quarter, the implementation of incremental fiscal funds will help the economy operate smoothly, and more incremental policies are still expected [3][4][5]. 3. Summary by Relevant Catalogs 3.1 Fiscal Revenue Growth Rate Continues to Improve, Tax Revenue Contribution Increases - The growth rate of general public budget revenue from January to September reached 0.5%, 0.2 percentage points higher than the previous value, and improved for three consecutive months. The central government's monthly revenue growth rate improved significantly, and the decline in cumulative growth rate narrowed to - 1.2%, while local fiscal revenue maintained positive growth at a cumulative rate of 1.8%. The fiscal revenue growth rate was slightly higher than the annual budget target by 0.1%, but the completion progress was 74.5%, lower than the historical average [11]. - Tax revenue growth significantly supported the improvement of fiscal revenue, while non - tax revenue growth declined sharply, turning into a negative drag on revenue growth. From January to September, the cumulative year - on - year growth rate of tax revenue was 0.7%, reaching the highest value of the year. Non - tax revenue had negative single - month growth for five consecutive months, and the cumulative growth rate turned slightly negative at - 0.4% [17]. - In terms of tax revenue structure, VAT, corporate income tax, domestic consumption tax, individual income tax, and stamp duty all showed positive growth, while land and real - estate - related tax revenue decline was narrowing [18]. 3.2 Overall Expenditure Progress is Slow, Decline in Infrastructure - Related Expenditure Narrows - From January to September, the year - on - year growth rate of fiscal expenditure was 3.1%, the same as the previous value and lower than the annual budget target of 4.4%. The central government's expenditure growth rate dropped to a new low of 7.3% for the year, while the local government's expenditure growth rate was 2.4%, 0.1 percentage points higher than the previous value. The general public budget expenditure completion progress from January to September was 70.1%, the lowest in the past five years [20]. - In terms of expenditure structure, people's livelihood - related expenditures remained the focus, and infrastructure - related expenditures improved. Social security and employment expenditures maintained a growth rate of 10%, and infrastructure - related expenditures such as energy conservation and environmental protection and transportation had a growth rate close to 20% for two consecutive months [21]. 3.3 Government - Funded Funds' Revenue and Expenditure Diverge, Revenue Lags Behind Expenditure - From January to September, the government - funded funds' revenue decreased by 0.5% year - on - year, lower than the annual budget growth target of 0.7%. The decline in land transfer fees was the main reason for the negative growth. The government - funded funds' expenditure increased by 23.9% year - on - year, higher than the annual budget target of 23.1%. The revenue completion progress was 49.1%, and the expenditure completion progress was 60% [25]. - The issuance of local government special bonds accelerated, with the completion progress of new special bonds in September reaching about 83.6%, still slow in a five - year perspective [25]. 3.4 Incremental Funds are Implemented to Fill Gaps and Expand Investment In September, the National Development and Reform Commission established a new policy - based financial instrument worth 500 billion yuan, and the Agricultural Development Bank of China has disbursed nearly 100 billion yuan. On October 17, the Ministry of Finance issued another 500 billion yuan in carry - over quotas. The implementation of incremental funds will help expand investment and support the stable operation of the economy in the fourth quarter. More incremental policies are still expected [5][30].

Group 1: Financial Data Overview - The growth rate of social financing (社融) decreased to 8.7% in September, with new social financing of 3.53 trillion yuan, a year-on-year decrease of 233.9 billion yuan[3] - The decline in social financing was primarily due to a slowdown in government bond supply and weaker RMB loans, while corporate bonds and off-balance-sheet note financing provided some support[3] - New RMB loans amounted to 1.61 trillion yuan, a year-on-year decrease of 366.1 billion yuan, indicating slow recovery in demand[12] Group 2: Corporate and Household Lending - New short-term loans for enterprises increased by 710 billion yuan, a year-on-year increase of 250 billion yuan, driven by a shift from bill financing[4] - New medium- and long-term loans for enterprises were 910 billion yuan, a year-on-year decrease of 50 billion yuan, constrained by insufficient corporate profitability and investment confidence[4] - Household short-term loans were 142.1 billion yuan, a year-on-year decrease of 127.9 billion yuan, reflecting weak consumer confidence and income expectations[5] Group 3: Monetary Supply and Economic Outlook - M1 growth rate rose to 7.2%, while M2 growth rate decreased to 8.4%, indicating a mixed monetary environment[36] - The recovery in M1 was supported by fiscal measures and a shift of funds from fixed deposits to demand deposits[36] - Future credit recovery depends on the restoration of corporate profitability and investment confidence, alongside coordinated fiscal spending and policy tools[7]

Export Performance - In September, export growth rebounded to 8.3%, up 3.9 percentage points from the previous month, exceeding the Wind consensus expectation of 5.7%[3] - The month-on-month export growth was 2.2%, slightly below seasonal expectations[3] - The rebound in exports was primarily driven by a low base effect, as the year-on-year growth in September 2024 was only 2.3%, the second-lowest point of the year[3] Regional Export Trends - Exports to non-U.S. economies showed strong resilience, with exports to Africa surging by 56.4%, an increase of 29.5 percentage points from the previous month, contributing 2.7 percentage points to overall export growth[4] - Exports to ASEAN and the EU maintained high growth rates of 15.6% and 14.2%, respectively, with EU growth up 3.8 percentage points from the previous month[4] - Exports to the U.S. continued to decline, with a year-on-year drop of 27.0% and a cumulative decline of 16.8%[4] Product Category Insights - Labor-intensive product exports showed some recovery, but many categories remained in negative growth, such as bags (-12.3%) and toys (-28.0%), collectively dragging down overall exports by 0.8 percentage points[5] - In contrast, technology-intensive product exports significantly rebounded, with electromechanical products growing by 12.6%, contributing 7.7 percentage points to export growth[5] Import Dynamics - Imports saw a significant rebound in September, with a year-on-year growth of 7.4%, up 6.1 percentage points from the previous month[6] - Agricultural imports surged, with a notable increase in soybean imports, which grew by 1.7%, a rise of 10.6 percentage points from the previous month[6] - High-tech product imports also rose sharply, with integrated circuit imports increasing by 14.1%[7] Future Outlook - The export rebound in September was mainly driven by low base effects, but as the base rises, export growth may slow again[7] - The structural shift in export markets towards non-U.S. regions is expected to provide some support, with exports to ASEAN, EU, Latin America, Africa, and Hong Kong now accounting for over 55% of total exports[7]

Group 1: Key Points on the "One Big Beautiful Bill" (OBBBA) - The OBBBA is projected to increase the federal deficit by approximately $3.4 trillion over the next decade and raise the debt ceiling by $5 trillion[3] - The bill primarily focuses on tax cuts, with the cost of personal and corporate tax reductions exceeding $4 trillion, while new tax cuts are estimated to cost only $664 billion[4] - The majority of new tax provisions are set to expire by 2028, leaving the deficit burden for future administrations[4] Group 2: Economic and Fiscal Implications - By 2025, the U.S. public debt-to-GDP ratio is expected to exceed 96%, with projections indicating a rise to 118.5% by 2035 due to the OBBBA[5] - The OBBBA's tax cuts are anticipated to stimulate GDP growth by 0.2% to 0.8% in the short term, but the long-term impact could shift to a negative effect of -0.3% to -0.5% on GDP[8] - The bill's implementation is likely to exacerbate income inequality, as the tax cuts disproportionately benefit high-income individuals[8] Group 3: Market Reactions and Risks - The increase in debt supply from the OBBBA may lead to higher long-term bond yields and increased risk premiums, potentially crowding out private investment[9] - The short-term benefits of tax cuts may support equity markets, but long-term concerns about fiscal deficits and inflation from tariffs could create volatility[9] - The political landscape surrounding the OBBBA may lead to further government shutdowns, reflecting ongoing fiscal uncertainties[9]

Investment Rating - The report upgrades the investment rating to "Positive" for the gold market [5]. Core Viewpoints - The escalation of US-China trade tensions has led to increased market risk aversion, driving gold prices to new historical highs, with spot gold reaching over $4060 per ounce on October 13 [3]. - The impact of the current round of US-China trade friction is expected to be limited, as both economies have developed a basic understanding of each other's economic resilience, and upcoming high-level negotiations may lead to a consensus [4]. - The gold market is unlikely to replicate the bull market seen during the previous US-China tariff conflict, as the likelihood of tariffs being implemented is low, with only a 16.5% chance according to Polymarket data [4][7]. Summary by Sections Market Performance - The report notes that the US stock indices fell significantly due to the trade tensions, with the Dow Jones down 1.9%, S&P 500 down 2.71%, and Nasdaq down 3.56% on the announcement day [3]. - Gold prices are expected to experience high volatility in the short term, supported by strong buying interest as the market digests the impact of trade tensions [5]. Economic Indicators - The US government is facing a shutdown crisis, which raises concerns about the stability of the US dollar and sovereign debt, potentially leading to increased capital inflows into gold [5]. - The Federal Reserve is expected to lower interest rates by 25 basis points, with a 95.7% probability, which would reduce the opportunity cost of holding gold and support its price [7][14]. Recommendations - The report recommends focusing on investment opportunities in gold-related companies, specifically mentioning Shandong Gold International (000975.SZ), Chifeng Jilong Gold Mining (600988.SH), and Shandong Gold Mining (600547.SH) as potential targets [7].

Production Side - In September, the average operating rate for electric furnaces and rebar steel was 61.70% and 42.21%, respectively, showing a slight decline from the previous month[3] - The operating rate for petroleum asphalt improved significantly, reaching an average of 34.38%, up by 10.35 percentage points from last month and 32.34% year-on-year[3] - The capacity utilization rates for coking, glass, cement clinker, and cold-rolled steel improved, recorded at 79.49%, 78.21%, 52.22%, and 78.21% respectively[3] Demand Side - In September, the transaction area for commercial housing in 30 cities increased by 4.92% month-on-month, while land transaction area in 100 cities rose by 26.92%[4] - The average daily sales of passenger cars were 66,930 units, reflecting a month-on-month growth of 3.17%[4] - The average weekly box office revenue for movies dropped to 635 million yuan, a decrease of 59.61% month-on-month, but a significant year-on-year increase of 70.02%[4] Price Side - The PPI for copper and aluminum saw increases of 1.77% and 0.22% respectively, while rebar and diesel prices fell by 1.75% each[6] - The average price of cement was 342.72 yuan/ton, up by 1.06% month-on-month, but lower than the previous year's average[79] - The price of petroleum asphalt increased to 3,513.20 yuan/ton, reflecting a month-on-month rise of 0.27%[81]