2025-10-23 13:28Summary of Zijin Mining Conference Call Company Overview - Company: Zijin Mining (2899 HK/601899 CH) - Industry: Metals & Mining Key Financial Results - 3Q25 Net Profit: RMB 14.6 billion, an increase of 11% quarter-on-quarter (q-o-q) and 57% year-on-year (y-o-y) [1][10] - Mined Gold Sales Volume: Increased by 9% q-o-q and 27% y-o-y [1] - Mined Copper Sales Volume: Remained flat q-o-q but increased by 8% y-o-y [1] - Average Selling Price (ASP) of Mined Gold: Increased by 4% q-o-q and 43% y-o-y [1] - Unit Cost of Mined Gold: Increased by 3% q-o-q and 20% y-o-y to approximately RMB 280/g [1] - Gross Margin for Mined Gold: Improved to 63.6%, up 7 percentage points (ppt) y-o-y, flat q-o-q [1] Strategic Outlook - Output Targets: - Copper: 1.5-1.6 million tons (mt) by 2028, revised target for 2025 to 1.1 mt [2] - Gold: 100-110 tons by 2028, with Zijin Gold International targeting approximately 100 tons annually by 2030 [2] - Cost Management: Focus on cost optimization before scaling lithium output, with full-year cost inflation for gold and copper expected to remain within 5-8% y-o-y [2] - Earnings Momentum: Anticipated sustained gold price strength and operational efficiency improvements to support earnings in 4Q25 and FY26 [2] Investment Ratings and Target Prices - Rating: Maintain Buy on H/A shares [3] - Target Prices: - H-share: Increased to HKD 43.00 from HKD 41.80, implying a 33% upside [3][5] - A-share: Increased to RMB 39.20 from RMB 38.00, implying a 32% upside [3][5] Financial Projections - Earnings Growth: Projected compound annual growth rate (CAGR) of 31% for 2024-2027 [3] - Earnings Estimates: Increased for 2025/26/27 by 5%/10%/6% respectively [3][23] Risks and Challenges - Potential Risks: - Delays in new capacity construction - Lower metal prices - Geopolitical conflicts affecting overseas operations - Overambitious mergers and acquisitions (M&A) impacting financials - Rising production costs due to inflation and stricter regulations [26] Additional Insights - One-off Gains: Approximately RMB 1.5 billion from changes in fair value of financial assets [1] - Market Capitalization: Approximately HKD 872.25 billion (USD 112.29 billion) [6] - Free Float: 77% for both H and A shares [6] This summary encapsulates the key points from the conference call, highlighting Zijin Mining's financial performance, strategic outlook, investment ratings, and associated risks.