2025-06-30 01:02Investment Rating - The investment rating for Zijin Mining Group is Overweight [4][78]. Core Views - The report highlights that Zijin Mining Group generates over 50% of its gross profit from copper, with a forecasted compound annual growth rate (CAGR) of approximately 7% in copper production volume from 2025 to 2027, driven by projects such as Kamoa, Timok, Julong, and Ashele [13][14]. - The price target for Zijin Mining Group has been raised to HK$25.10, reflecting an implied 2025 estimated price-to-earnings (P/E) ratio of 15x [3][4]. - The report indicates a positive risk-reward scenario, with a bull case price target of HK$31.80 and a bear case price target of HK$9.60 [10][11]. Summary by Sections Price Target and Scenarios - The price target has been updated from HK$23.40 to HK$25.10, with the bull case increasing from HK$31.00 to HK$31.80 and the bear case from HK$9.40 to HK$9.60 [2][3]. - The updated earnings per share (EPS) estimates for 2025, 2026, and 2027 are Rmb1.56, Rmb1.70, and Rmb1.65, respectively, reflecting increases of 1%, 4%, and 5% [3][4]. Production and Pricing - The report adjusts the Kamoa production volume to 400kt for 2025-26 and raises the realized average selling price (ASP) to gold price ratio based on first-quarter 2025 actual numbers [3]. - In the bull case scenario, gold and copper prices are projected at US$3,945/oz and US$5.03/lb, respectively, with gold production of 84.9 tons and copper production of 938.9kt in 2025 [11]. - The base case scenario estimates gold and copper prices at US$3,289/oz and US$4.19/lb, with gold production of 78.6 tons and copper production of 853.5kt [12]. Investment Drivers - Recent mergers and acquisitions, including four gold, three lithium, and one molybdenum project, are expected to enhance gold output growth and diversify into new products [14]. - The report emphasizes the strong demand for copper in China, which is a significant driver for Zijin's growth [13].