SJI(SZ:000975) Huaxin Securities·2024-08-23 02:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company has achieved significant cost reductions in gold mining and is initiating overseas acquisitions [2] - In the first half of 2024, the company's operating revenue reached 6.505 billion yuan, a year-on-year increase of 42.27%, while the net profit attributable to shareholders was 1.075 billion yuan, up 46.35% year-on-year [2][4] - The company has successfully reduced costs across its main mining operations, with the average cost of gold production dropping to 146.53 yuan per gram in H1 2024, down from 176.42 yuan per gram in 2023 [2][4] Summary by Sections Financial Performance - In Q1 and Q2 of 2024, the company's revenue was 2.773 billion yuan and 3.732 billion yuan respectively, with Q2 revenue increasing by 34.58% quarter-on-quarter and 56.81% year-on-year [2] - The net profit attributable to shareholders for Q1 and Q2 was 503 million yuan and 572 million yuan respectively, with Q2 net profit increasing by 13.72% quarter-on-quarter and 30.30% year-on-year [2] - The company produced 4.16 tons of gold and sold 4.41 tons in the first half of 2024, achieving 52% of its annual production target [2] Cost Management - The company has reported a significant decrease in production costs, with the cost of gold production after amortization dropping to 146.53 yuan per gram in H1 2024 [2] - The company has successfully reduced costs at its major mines, including Jilin Banmiaozi and Heihe Luoke, achieving varying degrees of cost reduction [2] Strategic Initiatives - The company is expanding its overseas presence by acquiring Osino Resources Corp., which includes the Twin Hills gold project in Namibia, estimated to have reserves of 64.5 million tons of ore with a gold grade of 1.04 grams per ton [3] - The acquisition is expected to enhance the company's production capacity and is set to be completed on August 29, 2024 [2][3] Earnings Forecast - The forecast for the company's operating revenue for 2024-2026 is 9.677 billion yuan, 10.719 billion yuan, and 11.245 billion yuan respectively, with net profits projected at 2.146 billion yuan, 2.565 billion yuan, and 2.761 billion yuan [4] - The current stock price corresponds to a PE ratio of 22.9, 19.1, and 17.8 for the years 2024, 2025, and 2026 respectively [4]