Yulong Gold(601028) 信达证券·2024-07-24 10:02Investment Rating - The report gives a "Buy" rating for the company, with a target price of 20.3 CNY per share based on a 25x PE for 2024, corresponding to a market value of 15.8 billion CNY [31]. Core Insights - The company is focusing on optimizing its operations and reducing costs, particularly in the Pakingo gold mine, where the production cost per gram of gold decreased by 8.82% to 210.54 CNY, while the gross profit per gram increased by 77.23% to 234.43 CNY in 2023 [1]. - The company is transitioning from a trading business to focus on gold and new energy mining, with gold business contributing 52% of revenue and 67% of gross profit in 2023 [52][71]. - The Pakingo gold mine has significant resource potential, with a JORC-compliant gold metal quantity of 202.1 million ounces (62.86 tons) as of June 30, 2023, an increase of 31.5 million ounces (9.80 tons) year-on-year [95]. - The company is also diversifying into new energy materials, including vanadium and silicon, with ongoing projects expected to contribute to future revenue [6][9][87]. Summary by Sections Section 1: Business Focus - The company is committed to divesting from trading operations and concentrating on gold and new energy mining, with a strategic focus on enhancing gold resource efficiency and exploration [52][54][96]. - The company has transitioned to a state-owned enterprise, which has influenced its strategic direction and operational focus [67]. Section 2: Gold Resource Potential - The Pakingo gold mine is highlighted as a low-cost, high-potential asset, with plans for further resource expansion and production capacity increases [105][108]. - The company has established a management agreement with Bato Gold to assist in the operation and potential restructuring of the Bato gold mine, which has rich resources [111][63]. Section 3: Diversification into New Energy - The company is actively pursuing projects in vanadium and silicon, with significant resource quantities reported, such as 65.15 million tons of V2O5 in the vanadium project [7][112]. - The company has entered into strategic partnerships to enhance its position in the vanadium and silicon markets, aiming to capitalize on the growing demand for energy storage solutions [89][143]. Section 4: Market Trends and Price Forecast - The report anticipates a bullish trend for gold prices due to expected interest rate cuts and increased demand for gold as a safe-haven asset amid economic uncertainties [16][31]. - The company projects revenue growth in the coming years, with expected revenues of 21.50 billion CNY, 19.76 billion CNY, and 22.89 billion CNY for 2024-2026 [28].