Zijin Mining(601899) 光大证券·2024-10-20 09:10Investment Rating - The report maintains a "Buy" rating for Zijin Mining Group (601899 SH) [3] Core Views - Zijin Mining's Q3 2024 performance slightly exceeded expectations, with gold and copper production increasing by 1% and 6% quarter-over-quarter respectively [1] - The company achieved a revenue of 230 4 billion yuan in the first three quarters of 2024, a year-over-year increase of 2 4%, and a net profit attributable to the parent company of 243 6 billion yuan, up 50 7% year-over-year [1] - Q3 2024 net profit attributable to the parent company was 92 7 billion yuan, a year-over-year increase of 58 2% and a quarter-over-quarter increase of 5 1% [1] - The report is optimistic about the continued upward trend in copper and gold prices, driven by supply constraints and favorable demand in Q4 2024 [2] Production and Costs - Q3 2024 gold production was 18 9 tons, up 6 2% year-over-year and 1 4% quarter-over-quarter, while copper production was 271,000 tons, up 3 4% year-over-year and 5 9% quarter-over-quarter [2] - Q3 2024 gold and copper prices averaged 9,313 per ton, up 4% and down 6% quarter-over-quarter respectively [2] - Copper concentrate and gold concentrate costs increased slightly in Q3 2024, while gold ingot costs decreased by 1% quarter-over-quarter [2] Financial Performance - The difference between non-GAAP and GAAP net profit in Q3 2024 was mainly due to a 15 9 billion yuan gain from fair value changes [2] - The company's fair value changes were primarily driven by commodity hedging contracts [2] Project Updates - The commissioning of the lithium carbonate projects in Argentina and Tibet has been delayed to 2025 due to licensing delays and low lithium prices [2] Industry Outlook - Copper prices are expected to continue rising in Q4 2024 due to tightening supply and strong demand from the power grid and home appliance sectors [2] - Gold prices are expected to benefit from the US interest rate cut cycle and a potential return of ETF investment demand [2] Valuation and Forecast - The report raises the company's profit forecast for 2024/2025/2026 to 337/402/482 billion yuan, representing year-over-year growth of 59 5%/19 3%/20 1% [3] - The current stock price corresponds to a PE ratio of 14/12/10 times for 2024/2025/2026 [3]