Core Viewpoint - Shandong Gold's annual report indicates significant revenue and profit growth for 2024, with a strong outlook for gold prices and continued investment value in gold stocks [1][5]. Financial Performance - In 2024, Shandong Gold achieved revenue of 82.518 billion yuan, a year-on-year increase of 39.21%, and a net profit attributable to shareholders of 2.952 billion yuan, up 26.80% year-on-year [1]. - The fourth quarter saw revenue of 15.512 billion yuan, down 13.59% year-on-year and 26.94% quarter-on-quarter, with a net profit of 0.886 billion yuan, down 9.85% year-on-year but up 29.81% quarter-on-quarter [1]. Production and Cost Analysis - The company's gold production in 2024 reached 46.17 tons, an increase of 10.51% year-on-year, primarily due to improvements in production capabilities and ore grades at various mines [2]. - The cost of gold production increased significantly, estimated at 293 yuan per gram in 2024 compared to 230 yuan per gram in 2023, impacting overall performance [2]. - The company's resource reserves have increased substantially, with gold metal reserves reaching 2058.46 tons by the end of 2024, up from 1282.96 tons in 2023 [2]. Future Production Outlook - Future gold production is expected to continue growing, with several projects in progress, including the Kartino project, which aims for an annual output of 8.4 tons of gold, and the Jiaojiakou and Xincheng projects, which are also expected to contribute significantly to production [3]. Market Trends and Price Outlook - The gold market is anticipated to experience upward pressure on prices in 2025, driven by changes in U.S. tariff policies and global economic uncertainties, with long-term demand for gold expected to remain strong due to geopolitical factors and central bank purchases [4]. - The initiation of pilot programs for insurance capital investment in gold in China may provide additional support for gold demand [4]. Earnings Forecast and Valuation - Due to the unexpected rise in gold prices, earnings per share (EPS) forecasts for the company have been raised for 2025-2027, with expected EPS of 1.17, 1.71, and 1.99 yuan respectively [5]. - The company is assigned a price-to-book (PB) ratio of 3.6 for 2025, with a target price of 33.81 yuan for A-shares and 20.65 HKD for H-shares, maintaining a buy rating [5].

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 33.81 and HKD 20.65, maintaining the "Buy" rating [8]. Core Views - The company reported a significant increase in revenue and net profit for 2024, with revenue reaching RMB 82.518 billion (up 39.21% year-on-year) and net profit of RMB 2.952 billion (up 26.80% year-on-year) [1][5]. - The company is expected to continue its production growth due to ongoing projects and resource integration, with gold production expected to rise significantly in the coming years [3][4]. - The outlook for gold prices remains positive, driven by factors such as U.S. tariff policy changes and global economic uncertainties, which may enhance investment demand for gold [4]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of RMB 82.518 billion, a year-on-year increase of 39.21%, and a net profit of RMB 2.952 billion, up 26.80% year-on-year [1][7]. - The company's gold production in 2024 was 46.17 tons, an increase of 10.51% year-on-year, attributed to improved production capabilities and higher ore grades [2]. Production Outlook - Future production growth is anticipated from several projects, including the Kartino project, which is expected to process 9.5 million tons of ore annually, yielding approximately 8.4 tons of gold [3]. - The company has significantly increased its resource reserves, with gold metal reserves reaching 2,058.46 tons by the end of 2024, up from 1,282.96 tons in 2023 [2]. Market Conditions - The gold market is expected to experience upward pressure on prices due to factors such as inflation and geopolitical uncertainties, with a favorable supply-demand balance anticipated [4]. - The initiation of insurance capital investment in gold in China may provide additional support for gold demand [4]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025 is RMB 1.17, with expected growth rates of 11.4% and 17.1% for 2025 and 2026, respectively [5][7]. - The company is valued at a price-to-book (PB) ratio of 3.6 times for 2025, with a target price reflecting a premium based on recent market performance [5][12].