SJI(SZ:000975) Xin Lang Cai Jing·2025-09-30 00:35Core Viewpoint - The company is positioned to benefit from rising gold prices due to its high-quality gold mines and cost-effective operations, with significant growth potential from both existing and new projects [1][2][3]. Group 1: Company Operations - The company currently operates six gold mines and one polymetallic mine, with an expected gold resource increase to 277 tons by the end of 2024, of which the Osino mine will contribute nearly 50% [1]. - The average grade of the company's gold mines is 1.7 grams per ton, with a projected gold production of 8 tons in 2024 and an all-in sustaining cost of $683.5 per ounce, placing it in the top 10% of global gold mining cost curves [1]. - The company has a gross margin of over 70% on mined gold, indicating superior cost efficiency compared to peers [1]. Group 2: Market Trends - The upward trend in precious metal prices is expected to continue, driven by the shift in gold's core pricing factors from yield to safety due to geopolitical tensions and a weakening dollar reserve credit [1]. - China's central bank's gold reserves are currently at 6.7%, which is relatively low compared to global standards, suggesting potential for increased gold purchases [1]. - Historical data shows a significant negative correlation between gold ETFs and real interest rates, with expectations of declining real interest rates and increased gold ETF inflows by 2025 [1]. Group 3: Growth Opportunities - The company has identified growth opportunities through both existing mines and potential acquisitions, with plans to increase production from its current mines and new projects [2]. - The company’s existing mines, including Heihe Luoke, Jilin Banmiaozi, and Qinghai Dachaidan, have the potential to increase gold production from 8 tons in 2024, with significant growth expected from the Qinghai Dachaidan project [2]. - The company is planning to list on the Hong Kong stock exchange to enhance its acquisition funding capabilities and is actively seeking high-quality asset acquisition opportunities [2]. Group 4: Financial Projections - The company is projected to achieve net profits of 3.48 billion, 3.91 billion, and 5.34 billion yuan for the years 2025 to 2027, with corresponding price-to-earnings ratios of 18, 16, and 12 times, which are below the industry average [3]. - The company’s stable production, high-grade resources, and low costs position it well to benefit from the gold price upcycle, with a clear growth path from upcoming projects [3]. - The company plans to issue H shares in June 2025, which will strengthen its acquisition funding advantage and support its growth strategy [2][3].