KAIYUAN SECURITIES·2025-08-29 05:31Investment Rating - The investment rating for Zijin Mining is "Buy" (maintained) [1] Core Views - Zijin Mining reported a 54.41% year-on-year increase in net profit attributable to shareholders for H1 2025, with revenue reaching 167.71 billion yuan, a growth of 11.5% [4] - The company expects stable releases in copper and gold production, with an upward revision of profit forecasts for 2025-2027, projecting net profits of 46.45 billion, 51.33 billion, and 57.12 billion yuan respectively [4] - The current price-to-earnings ratio (PE) is projected at 12.9, 11.7, and 10.5 times for 2025-2027 [4] Financial Performance - In H1 2025, Zijin Mining achieved a revenue of 1677.11 billion yuan, with a net profit of approximately 232.92 billion yuan, and a net cash flow from operating activities of 288.30 billion yuan, reflecting a growth of 41.0% [4][5] - For Q2 2025, the company reported a revenue of 887.83 billion yuan, a year-on-year increase of 17.38%, and a net profit of 131.25 billion yuan, up 48.74% [4][5] - The copper production increased by 9% to 567,000 tons, while gold production rose by 16% to 41.2 tons in H1 2025 [5] Price and Cost Analysis - The average selling price for copper increased by 6.21% and for gold by 42.51% in H1 2025 [5] - The sales costs for copper and gold in Q2 2025 rose by 8.85% and 37.34% respectively, attributed to factors such as declining ore grades and increased operational costs [5] Strategic Developments - Zijin Mining signed an agreement to acquire 100% equity in the Raygorodok gold mine in Kazakhstan, which is expected to enhance its resource base and regional control [6] Financial Summary and Valuation Metrics - The projected revenue for 2025 is 377.04 billion yuan, with a net profit of 46.45 billion yuan, reflecting a year-on-year growth of 24.2% [7] - The gross margin is expected to improve to 22.3% by 2025, with a net margin of 12.3% [7] - The return on equity (ROE) is projected to be 24.2% in 2025 [7]