CHIFENG GOLD(SH:600988) CHINA DRAGON SECURITIES·2024-03-31 16:00Investment Rating - The report initiates coverage with a "Buy" rating for Chifeng Gold (600988.SH) [2][3]. Core Views - The company is expected to benefit from rising gold prices and cost control measures, leading to strong performance in 2023 with a revenue of CNY 7.22 billion, a year-on-year increase of 15.23%, and a net profit of CNY 804 million, up 78.21% [3]. - The gold price is anticipated to continue its upward trend in 2024, supported by increased global demand and geopolitical risks, which will further enhance the company's performance [3]. Financial Performance Summary - 2023 Financials: - Revenue: CNY 7,220.95 million, up 15.23% - Net Profit: CNY 803.93 million, up 78.21% - Gross Margin: Increased by 8.05 percentage points to 35.69% [4][5]. - 2024-2026 Forecasts: - Revenue projections: CNY 8,819.42 million (2024E), CNY 9,946.27 million (2025E), CNY 11,207.23 million (2026E) - Net Profit projections: CNY 1,174.57 million (2024E), CNY 1,331.57 million (2025E), CNY 1,560.38 million (2026E) - Corresponding P/E ratios: 23.16 (2024E), 20.43 (2025E), 17.43 (2026E) [4][5]. - Key Ratios: - ROE: Expected to rise from 13.07% in 2023 to 15.99% in 2024 - EPS: Projected to increase from CNY 0.48 in 2023 to CNY 0.71 in 2024 [4][5]. Market Outlook - The report highlights that the company has added 996,000 tons of geological gold resources in 2023, and new production capacity from ongoing projects is expected to come online in 2024, positioning the company to capitalize on the anticipated rise in gold prices [3].