Core Viewpoint - Tongguan Gold Group is initiated with an OUTPERFORM rating and a target price of HK$3.52, driven by its strong gold exploration expertise and organic growth momentum [1] Investment Positives - The company has a total of 55.0 tons of gold reserves with an average ore grade of 8.26g/t, and expects gold sales volume to reach 2.8 tons in 2025 and 3.4 tons in 2026 [1] - Tongguan Gold's acquisition of Xi'an Hongshang is expected to reduce production costs through value chain consolidation [1] - Zijin Mining's acquisition of a 3.82% stake in Tongguan Gold for US$25 million indicates confidence in the company's asset quality and strategic direction [2] - The anticipated continuation of gold purchases by the People's Bank of China (PBoC) is expected to support gold price increases [3][4] Financials and Valuation - Forecasted EPS is HK$0.16 in 2025 and HK$0.23 in 2026, representing a CAGR of 121% from 2024 to 2026 [5] - The stock is currently trading at 17.3x 2025 estimated P/E and 11.6x 2026 estimated P/E, with a target price implying a 30% upside [5]
TONGGUAN GOLD GROUP(00340.HK)：CONTINUING TO EXPLORE AND INCREASE GOLD RESERVES STRONG MOMENTUM OF ORGANIC GROWTH AND EXTERNAL EXPANSION