Zijin Mining(601899) 2 1 Shi Ji Jing Ji Bao Dao·2025-05-27 10:57Core Viewpoint - The executive compensation at Zijin Mining (601899.SH) is expected to see a significant decline in 2025 due to the company's employee stock ownership plan, which involves executives voluntarily giving up part of their bonus compensation in exchange for shares at a discounted price [1][4]. Group 1: Employee Stock Ownership Plan - The employee stock ownership plan allows executives to purchase shares at a preferential price of 10.89 CNY per share, with a total funding amount not exceeding 700.4 million CNY [3][5]. - Executives, including Chairman Chen Jinghe, are expected to forgo bonuses ranging from 391,000 CNY to 699,000 CNY as part of this plan [1][3]. - The plan aims to align management's interests with the company's market performance, as stated by Chen Jinghe, who emphasized that future bonuses will be closely tied to stock and market value [1][2]. Group 2: Valuation Enhancement Strategy - Zijin Mining has initiated a strategy to enhance its valuation, which includes the spin-off of its subsidiary, Zijin Gold International, for a potential listing on the Hong Kong Stock Exchange [1][8]. - The company aims to leverage favorable industry cycles and policy benefits to provide investors with opportunities for value reassessment of its gold assets [8]. - The net assets and net profit of Zijin Gold International for 2024 are projected to be 21.14 billion CNY and 4.458 billion CNY, respectively, indicating significant potential for market capitalization post-listing [8]. Group 3: Executive Compensation Context - In 2024, the annual salary for Chen Jinghe and Vice Chairman Zou Laichang is expected to exceed 7 million CNY, while other vice president-level executives typically earn between 4 million CNY and 5.5 million CNY [4]. - Following the commitment to forgo bonuses, executive salaries may drop to tens of thousands of CNY, with the trade-off being the acquisition of shares at a lower price [4][6]. - The stock price difference between the preferential purchase price and the market price as of May 27 was 6.99 CNY per share, potentially resulting in significant gains for executives participating in the stock ownership plan [6]. Group 4: Market Performance and Management Responsibility - Chen Jinghe has been designated as the primary responsible person for the company's market value management, acknowledging that the company's current market valuation does not reflect its growth potential [7]. - Following a significant drop in market value due to external factors, the company quickly approved a buyback plan of 1 billion CNY to stabilize its stock price [7]. - The company has been actively taking steps to improve its market performance, with monthly actions reflecting its commitment to enhancing shareholder value [7]. Group 5: Long-term Strategic Goals - Zijin Mining has maintained its long-term production targets despite short-term adjustments in its lithium production guidance due to market conditions [9][10]. - The acquisition of control over Zangge Mining is expected to support the company's mid-to-long-term lithium production goals [10]. - The complexity of capital market operations presents uncertainties regarding the company's ability to achieve its desired valuation improvements [10].