Zijin Mining 2899

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DJ MARKET TALK: CS Ups Zijin Mining Target To HK$5.70 Vs HK$4.40

0921 [Dow Jones] STOCK CALL: Credit Suisse raises Zijin Mining (2899.HK) target price to HK$5.70 from HK$4.40, based on SOTP. Notes 1Q09 net profit under China standards +21% on-year at CNY912 million, marking 28% of FY09 consensus forecast, offering positive surprise to market. Says lower-than-expected costs a positive highlight, with unit cost of gold flat on-year at US$257/oz, but down 17% vs FY08 average, on lower material cost, labor cost.

Says unit cost of copper in concentrate also down 25% on-year. Raises 2009-10 EPS forecasts 21%, 9% on better-than-expected costs; expects 2009 earnings +10% as rising gold profit partly offset by falls in copper/zinc, gold in total earnings to rise to 78%. Keeps at Neutral. Shares ended yesterday down 4.4% at HK$5.90.

Source: Dow Jones Newswire

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Not vested. From Dr. Check, The Standard HK:-

Consider Zijin Mining (2899) whose earnings soared from 703 million yuan (HK$797 million) in 2005 to 3.06 billion yuan last year. It was the only China metal play to record net profit growth, 20.5 percent year on year, in the first quarter.

Some analysts say if gold clears US$1,002.80 an ounce - the high early last year - it may soar to US$1,300.

Zijin listed in December 2003 at an IPO price of HK$3.30. Since then there have been four dividend payments. Since listing, Zijin has made a return of 21 times based on yesterday's closing of HK$7.28. It is much more attractive than holding actual gold. Around HK$6.80-HK$7, the pick looks reasonable.

Source: The Standard HK

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Glittering profits as Zijin Mining benefits from rising price of gold -

Zijin Mining Group - the mainland's largest gold producer - said first-half profit gained 11 percent on higher bullion prices and production.
Net income rose to 1.93 billion yuan (HK$2.19 billion) from 1.74 billion yuan a year earlier, the company said yesterday. Gold climbed to an 11-month high of US$1,006.29 (HK$7,849) an ounce on February 20 as investors bought haven assets because of the financial turmoil.

China may overtake India to become the world's top gold consumer this year as jewelry demand expanded, the World Gold Council said.

Zijin Mining, based in Fujian province, made 63 percent of its profit from gold last year, with the rest from copper, zinc, iron ore and silver.

BLOOMBERG

[winston]

Not vested. From Phillips:-


Risks
Global economy recovers without obvious inflation and gold ends its risk- hedging mission temporally and goes down.

Resources tax policy appears and taxation burden rises for gold miners.


Valuation
Based on Zijin Mining's sustainable growth and increasing gold price , we expect its turnover of FY09 and FY10 of RMB 19.7 billion and RMB24.4 billion, increase of 21% and 24% respectively; net profit of RMB4.136 billion and RMB5.384 billion, increase of 35% and 30% y/y respectively; and EPS of RMB0.28 and RMB0.37.

Regarding valuation, we take a look at the ratio of market capitalization to total resources value. Based on the price in the end of July, it is only 20% around for Zijin Mining, lower than most of main domestic resources companies, although higher than Western Mining. For its gold peers, that for Shandong Gold and Zhongjin Gold is respectively above 100% and 50%.

What's more, Zijin has obvious value premium to HSI in most of its records, especially in 2006-2007, its premium peaked with 200% with average PE of 30x. At present, the circumstance is better for gold than in 2006-2007. Given increasing gold price and growth expectation of this company, we give it 30x PE of FY09 and 12m TP of HK$9.68, rating Buy.

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DJ MARKET TALK: Zijin's Copper Expansion A Strategic Move - UOB

1347 [Dow Jones] UOB KayHian says Zijin Mining's plan to buy remaining 50% of copper producer Zijin Copper is "strategic expansion" into copper; CNY1.2 billion bid, if successful, will be funded by internal resources. Says decision to fully own copper refinery suggests Zijin aims to turn copper into big future earnings driver; company now has China's 2nd-largest copper reserves of 9.6 million tons, trailing Jiangxi Copper (0358.HK).

House notes Zijin shares recently lagged Zhaojin Mining (1818.HK), Real Gold (0246.HK), as latter two perceived pure gold plays, but "when there is a raging gold bull, gold/copper plays tend to rise to the valuations of pure gold plays."

Keeps Zijin at Buy with HK$9.32 target; stock down 2.4% at HK$10.52 yesterday.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: DB Ups Zijin Mining Target To HK$9.00 Vs HK$6.60

0842 [Dow Jones] STOCK CALL: Deutsche Bank raises Zijin Mining (2899.HK) target price to HK$9.00 from HK$6.60 after increasing FY09-11 earnings estimates by 29%, 56%, 74% respectively on higher metal price forecasts. Keeps at Buy.

Notes house's commodities team raised FY09-13 gold price forecasts by 2.9%, 32.4%, 45.5%, 25.0%, 6.7% respectively; also increases FY09-12 copper price forecasts by 23.1%, 29.7%, 37.5%, 7.1% respectively.

"We continue to rate Zijin our top pick in the Chinese metals space as we believe its strong management team, solid track record of constant earnings growth and ongoing mine acquisitions should enable it to benefit the most from the stronger-for-longer metal prices in the next few years."

Adds, 3Q09 gold price +10% on-year, +4% on-quarter, indicating strong earnings due in mid-October. Shares ended Wednesday +0.7% at HK$7.61.

Source: Dow Jones Newswire

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Zijin Mining Group (2899.HK) (601899.SS) is eyeing up to $1 billion in investments in gold and copper projects in the Philippines within five years, the Philippine environment secretary said on Thursday.

Source: Reuters

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Gold firm Zijin fails to shine

Zijin Mining (2899), China's largest listed gold company, missed outbound investment opportunities because of inaccurate judgments, a senior executive said yesterday.
"In terms of overseas investment, there were inaccurate judgments of the mining market. Even though we've done a lot of work the achievement is not satisfactory," Zijin's chief executive Chen Jinghe told an industry forum in the port city of Tianjin.

"We've got some projects that are not large - there is a difference from our expectations."

Gold hit a record of above US$1,070 (HK$8,346) last week on a weak US dollar as the precious metal is often seen as a hedge against the dollar.

It has risen more than 20 percent this year.

Chen said the company barely missed some very big projects.

Zijin said in July that it had terminated share acquisition talks with a Kazakhstan gold company, but gave no reason for the termination.

It was in active pursuit of overseas resources and had made initial investigations into various overseas projects, although no agreements had been signed, the company said in a statement in July.

Source: REUTERS

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Zijin Mining Group Co., China’s largest gold producer, plunged 9.8 percent to HK$8.12. The company said billionaire Chen Fashu sold 146 million of the company’s shares, reducing his stake to 11.95 percent from 12.95 percent.

Source: Bloomberg

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