Real Gold Mining 0246

Real Gold Mining 0246

Postby winston » Thu Mar 11, 2010 4:47 pm

Not vested. From Phillips:-


Risks
Global economy recovers without obvious inflation and gold price goes down significantly;
The rate of expansion of the Company may be below expectation.
Resources tax policy appears and taxation burden rises for gold miners.


To buy proactively for the expected high-speed growth

Real Gold Mining will expand its main business continually, and its profitability can also keep at the high level. Plus with the gold is expected to spiral up, we forecast its turnover of FY10 and FY11 of RMB 1.53 billion and RMB1.87 billion, increase by 52% and 22% respectively, net profit of RMB794 million and RMB970 million, increase by 51% and 22% y/y respectively; and EPS of RMB1.03 and RMB1.26.

Regarding P/E and P/B valuation, the gold companies listed in other markets and HK have obvious value premium to relative indexes in most of its records, with average 100% and peaked 200%. Limited by the small scale, the P/E of Real Gold Mining is fairly equivalent to that of HSI, with the historical relative P/E averaging at 0.83X.

Taking consideration of the high growth potential, we give it the relative P/E with 0.88X. Plus with the average 14.59X P/E of HSI since 1993, the 12-m TP of the Company will be HK$15, over 40% premium than current price. We initiate it Buy rating.

By the technical analysis, Real Gold Mining is going on the upwards trend, showing a bull market in the medium to long term. In March, 2010, its stock price has broke through the downwards pressure line since December, which is still a good time to buy the Company.
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Re: Real Gold Mining 0246

Postby stilicon » Thu Mar 11, 2010 8:05 pm

Taifook also has a positive view on RGM, setting a TP of $14.3.

They also note the extreme efficiency of RGM with a cash cost of US$208 per oz (Apparently it is a gross number, before some sort of levy by the State - Macquarie cites a US$350/oz cash cost of payable gold). Most canadian miners I follow have a cash cost between 400 and 450 (US$/oz).

Taifook also cites a cash cost of 280US$/oz for Zhaojin Mining (1818.HK).
The ore grades vary between the different mines. The bigger one (Nantaizi) has a high 9.4 g/t, whereas the other one (Luotuochang) comes at 3.2 g/t. Both have recovery rates of about 85%.

Unfortunately the company site gives no information about reserves or exploitations ratios.

Macquarie set a TP of HK$13.5, and Citi HK$14.3 (on a report dated 8/3/10 - but it should be noted that Citi has 8% of the capital, following the Taifook report).

I will definitely start looking at this company.
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Re: Real Gold Mining 0246

Postby winston » Thu Mar 11, 2010 8:13 pm

DJ MARKET TALK: Real Gold's Liquidity Position Remains Strong -TF

1244 [Dow Jones] STOCK CALL: Taifook notes with a net cash position of CNY1.96 billion end-2009, Real Gold Mining's (0246.HK) liquidity position remains healthiest among gold stocks under house's coverage.

Adds, management has confirmed its appetite for more sizable acquisitions on mainland, with house projecting 43% production growth in FY10, thanks to operation of recently upgraded processing plants, while scheduled opening of Fuyuan gold mine in Yunnan in December 2010 also expected to be supportive.

Keeps at Buy, HK$14.30 target (8.9X FY10 P/E). Stock +0.6% at HK$10.66.

Source: Dow Jones Newswire
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Re: Real Gold Mining 0246

Postby winston » Thu Mar 11, 2010 8:15 pm

DJ MARKET TALK: Real Gold +1.5%;Spectacular Growth To Persist-CPY
March 8, 2010

1101 [Dow Jones] Real Gold Mining (0246.HK) +1.5% at HK$10.60, after stronger-than-expected FY09 results, with FY09 net profit up 5.1 times on-year at CNY526.7 million, vs CNY480.45 million to CNY504 million range tipped by Thomson Reuters.

Stock off early high of HK$10.90, as gains capped after 6.7% rise month-to-date. Core Pacific-Yamaichi notes huge jump in revenue expected, as RGM already reported sharp rise for 9M09.

Adds, like other major gold mining companies in China, RGM seeks to achieve growth by acquisitions of gold mines. "We believe that the company's current net cash position and prudent dividend policy allow it to seize M&A opportunities to increase its gold resources."

Given its fast-expanding reserves and production capacity, tips spectacular earnings growth to continue in FY10. House doesn't rate stock. (SUT)


Source: Dow Jones Newswire
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Re: Real Gold Mining 0246

Postby winston » Thu Mar 11, 2010 8:17 pm

DJ MARKET TALK: Taifook Keeps Real Gold At Buy; HK$14.30 Target
Feb 22, 2010

1244 [Dow Jones] STOCK CALL: Taifook says further acquisitions by Real Gold (0246.HK) could be on cards to boost gold production growth in FY11 and FY12. After recently completed upgrade of Shirengou-Nantaizi and Luotuochang processing plants, and acquisition of Fuyuan mine which set to begin production in December 2010, house expects company would post 50% production growth in FY10, though that figure should decline to 21% and 2% in FY11 and FY12.

Rates stock at Buy with HK$14.30 target (12X FY10 P/E). Stock last +5.0% at HK$10.06. (SUT)

Source: Dow Jones Newswire
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Re: Real Gold Mining 0246

Postby stilicon » Thu Mar 11, 2010 8:30 pm

Does anyone know something about the Wu family, said to possess 62% of the capital ? (there must be plenty of Wu families in China, am I right ? :roll: )
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Re: Real Gold Mining 0246

Postby investar » Thu Mar 11, 2010 9:35 pm

Could it be the same Mr. Wu from XING and QXM?

I like Real Gold Mining, have bought at 9 and very recently at 10.7 HKD just after the results.
Discount to peers is quite high, while they have the strongest growth and lowest production costs...

Targets?
http://www.realgoldmining.com/English/cwzy03.asp
This morning there was a report from Philip Securities, target 15
Taifook target 14.3
Citi upped their target to 14.3 after the results
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Re: Real Gold Mining 0246

Postby investar » Mon Mar 29, 2010 5:32 pm

GTJA cautious target 13.25:

Real Gold Mining is a mining company focusing on upstream business and providing versatile ores, thus its unit cost is negatively related to by-product metal prices. Considering the rising metal prices and labor cost, we expect its unit cost of FY10-12 to be US$205.0/Oz, US$230.5/Oz and US$234.6/Oz, respectively.

Real Gold Mining’s mining and processing capacity is at its maximum on current projects and will increase once the mining rights of new mines are issued in FY10. Based on our assumption of gold price, we estimate the company’s FY10-12 EPS to be RMB1.067, RMB1.348 and RMB 1.183, respectively.

The company is trading at a discount to HK peers. Considering its short history and potential risks in acquisitions, we suggest investors to be more patient on investment. Based on 2.7x FY10 PB, which represents a 25% discount to its HK peers and a 15% premium to its global peers, our Target Price is HKD 13.25. Initial with “Accumulate”.
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Re: Real Gold Mining 0246

Postby investar » Thu Apr 08, 2010 5:51 pm

Cheapest serious gold stock on the HK market?
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Re: Real Gold Mining 0246

Postby investar » Wed Apr 14, 2010 6:30 pm

Real Gold Mining is down 10% in the last 3 sessions, while the gold price looks firm to me.
Opportunity, or am I missing any news?

+why the discount to peers, while their growth is much higher and costs are lower?
Only because of lower liquidity and shorter trading history?

CLSA report target 16.5$:
http://www.realgoldmining.com/PDF/20100 ... with%20BUY).%20Golden%20growth.pdf
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