Zijin Mining(601899) 2 1 Shi Ji Jing Ji Bao Dao·2025-05-06 11:47Core Viewpoint - Zijin Mining is increasingly focusing on its market value performance, planning to spin off its overseas gold mining assets to enhance overall company value and shareholder value amid a rising gold price cycle [1][7]. Group 1: Spin-off and Market Strategy - The company plans to restructure its overseas gold mining assets into a wholly-owned subsidiary, Zijin Gold International Co., Ltd., and apply for a listing on the Hong Kong Stock Exchange [1]. - The spin-off is expected to significantly improve Zijin Mining's overall value and asset securitization level, as the company aims to attract more international investors [2][6]. - The current valuation of Zijin Mining is lagging behind its peers in A-shares, H-shares, and US stocks, with a P/E ratio of approximately 13.58 times compared to an average of 17.31 times for 14 gold and precious metal companies listed on the Hong Kong Stock Exchange [1][8]. Group 2: Growth Potential and Asset Quality - Zijin Mining's gold production is projected to increase from 68 tons in 2023 to 73 tons in 2024, positioning the company among the top ten globally [3][4]. - Key overseas projects, such as the Rosebel Gold Mine in Suriname and the Akyem Gold Mine in Ghana, are expected to contribute significantly to future earnings, with the Rosebel mine's production potentially reaching 10 tons annually post-expansion [5][6]. - The company’s overseas operations have a gross profit margin of 27.52%, significantly higher than the 9% margin for domestic operations, indicating a comparative advantage in asset quality [5][6]. Group 3: Valuation Comparison - The company’s current P/E ratio of 14.73 times in A-shares is below the average of 31.74 times for 11 gold companies, highlighting the undervaluation issue [7][8]. - In the global context, major competitors like Newmont and Barrick Gold have P/E ratios ranging from 15 to 31 times, further emphasizing the low valuation of Zijin Mining [9]. - The spin-off plan aligns with the favorable conditions of high international gold prices and the need for better market valuation management [9].