Zijin Mining 2899

[winston]

Zijin Mining (2899 HK)
1Q24: In Line; Margin Expansion On Effective Production Cost Reductions

Zijin reported 1Q24 earnings of Rmb6,260.8m (+15.1% yoy), in line with expectations.

Gross margin of mining entities expanded by 0.97ppt yoy to 54.5%, driven by cost savings and a spike in metal prices.

Mine-produced copper/gold production volume rose 5.2%yoy/5.3% yoy to 262,649 tonnes/16,805kg, and management is confident of meeting the 10%/9% yoy production growth targets for 2024.

There is limited impact from the production halt at the Kolwezi mine.

Maintain BUY. Target price: HK$18.10.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Zijin Mining joins convertible bonds rush

Zijin Mining (2899) is raising US$2.5 billion (HK$19.5 billion) through sales of convertible bonds and discounted share placement, making it the latest Chinese firm to take advantage of the instrument to get cheap money amid high interest rates.

A wholly-owned unit of the company issued notes worth US$2 billion that can be turned into equity due in 2029 at a 1 percent annual coupon, according to a filing yesterday.

In a parallel offering, Zijin also sold 251.9 million H-shares at HK$15.5 per share, a discount of 5 percent to Monday's closing price of HK$16.32.

Net proceeds from the bond sale, which is expected to be US$1.98 billion, will be used for refinancing the company's offshore indebtedness, the filing said, while money from the share placement is intended for business operations and development in the overseas market, including potential mergers and acquisitions.

Chinese firms have stepped up the pace of convertible bond sales, including a flurry of high-profile issuances by technology companies such as Alibaba (9988), JD.com (9618) and Trip.com (9961), which raised billions of dollars and used some of the proceeds to repurchase their American depositary receipts.

Convertibles are popular during times of higher borrowing costs because the hybrid notes' equity component typically means interest rate payments are lower than regular debt. They allow companies to borrow at lower rates than regular debt - in some cases for free.

The notes also give investors the chance to profit from a rise in the underlying share price, which is attractive in volatile markets.

Source: The Standard

https://www.thestandard.com.hk/section- ... bonds-rush

[winston]

not vested

<News Alert!>: 1H24 preliminary net profit, above our estimates and share placement and CB issue, positive for its business growth.

2Q24 preliminary result, above our expectations, buoyed by strong production growth of mined gold and copper and higher metal prices.

Share placement and CB issue, positive to secure capital for its business growth.

Retain BUY call and TP of HKD22.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=20118

[winston]

not vested

<Research>HSBC Global Research Expects Copper Prices to Stay High, Prefers CMOC & ZIJIN MINING w/ TP Raise

HSBC Global Research noted its optimism in a report that copper prices will remain elevated due to recovering demand from the energy transition and tight copper concentrate supply.

According to the broker, copper demand will continue to be supported by strong demand for energy transformation, such as grid investment, renewable energy installations and electric vehicle production.

Demand for real estate completions also has the potential to improve in 2H24 as the Chinese government rolls out more stimulus packages for the real estate sector.

Related News: M Stanley: Recent Copper Prices Backed on Still Tight Supply; ZIJIN, CMOC Expected to React Positively

On the supply side, the broker believed copper concentrate supply may be vulnerable to disruptions in mine production.

Stocks of copper concentrate at mainland ports have rebounded since April, partly due to increased use of copper scrap, but stocks are still below historical figures.

HSBC also preferred ZIJIN MINING (02899.HK) for its diversified portfolio of mines, which has brought steady growth and favourable exposure to gold production. The broker kept its Buy rating and elevated its H-share target price from $20.9 to $21.3.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>UBS: ZIJIN MINING (02899.HK) Interim Earnings Beat; Positive Investor Reaction Expected

UBS released a research report expecting that ZIJIN MINING (02899.HK) 's 1H24 net profit will be between RMB14.55 billion and RMB15.45 billion, up 41-50% YoY, realizing 51-54% of UBS' FY2024 forecast of RMB28.5 billion and 50-53% of the market consensus of RMB29.1 billion.

This means that 2Q24 earnings should be RMB8.3 billion to RMB9.2 billion, beating UBS' forecast of RMB8.1 billion and the market's expectation of around RMB8 billion.

In 1H24, the Company produced approx. 35.4 tons/ 518,000 tons of gold/ copper, up 9.6% YoY/ 5.3% YoY, according to the report.

Higher prices and improved cost control brought a positive surprise to the results.

As the results beat market consensus, UBS forecasted a positive response from investors, and rated ZIJIN MINING at Buy, with a target price of $22.3.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

not vested

Zijin Mining (2899 HK)
1H24: In Line; Mining Entities’ Gross Margin Expands To 57.3%

Zijin reported 1H24 earnings of Rmb15,084.4m (+46.6% yoy), representing 53% of our
full-year estimate and in line with expectations.

Mining entities’ gross margin rose to 57.3% (+5.6ppt), thanks to an uptick in copper/gold prices and cost savings in 1H24.

Copper/gold output grew to 518,570 tonnes/35 tonnes (+5.3%/+9.5% yoy), slightly behind the full-year target given interruptions of mine operations.

Lithium production will likely be postponed on weak prices.

Maintain BUY. Target price: HK$21.50.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Zijin Mining Group (2899 HK / 601899 CH) - Continued volume growth

Summary (2899 HK): 1H24 results in-line with previously announced profit alert guidance with recurring earnings surged 60% year-on-year (YoY), largely driven by higher sales volume and average selling price (ASP) for both gold and copper, solid production volume and lowered cost of goods sold.

Cash flow position has improved significantly operating cash flow rose 28% YoY in 1H24 with CAPEX down 16% YoY.

As such, free cash flow turned positive and came in at CNY4.5b.

The solid results demonstrated Zijin’s strong operating leverage with stringent cost discipline.

We view Zijin as one of the few companies benefiting from increase production volume and rising commodity prices.

Share price has risen 10.7% year-to-date and is trading at 9x forward price-to-earnings (P/E), which is around -1 s.d. to historical average.

We finetune our fair value estimate to HKD21.00, which is based on discounted cash flow (DCF) methodology.

Source: OCBC

[behappyalways]

Colombian drug lords robbed mine tunnels, China's Zijin Mining "3.2 tons of gold" was stolen, gangs are rampant + government inaction,
Chinese companies admitted that 3.2 tons of gold were stolen

哥國毒梟強搶礦道 中國紫金礦業"3.2噸黃金"被盜 黑幫猖獗+政府不作為 中企認了被盜3.2噸黃金│國際焦點20241115│三立新聞台

https://m.youtube.com/watch?v=YO4NhvRgCpQ

[winston]

not vested

Jan 10, 2025

China's Zijin Mining in talks to buy controlling stake in Zangge Mining

The potential deal would allow Zijin to consolidate its ownership over the Julong copper project in Tibet, its joint venture with Zangge.

Last year, Zijin had won government approval to expand the Julong mine's output to about 350,000 metric tons per day, making it the largest single copper mine in China.

The talks further underline Zijin's attempts to cash in on growing demand for battery metals, as it prepares to start production at its first lithium exploration project in the Democratic Republic of Congo next year.

Source: Reuters

https://www.reuters.com/markets/deals/c ... 025-01-10/

[winston]

not vested

Zijin Mining Group (2899 HK / 601899 CH)

Recommendation : BUY
Fair Value : HKD 22.00 (2899 HK) / CNY 22.40 (601899 CH)


STEADY VOLUME GROWTH
• In-line 2024 earnings
• Updated 2025 guidance
• Benefiting from volume growth and encouraging commodity prices

Summary (2899 HK): Recurring earnings surged 45% year-on-year (YoY) in 2024 with gold output in-line with full year guidance.

Copper output was about 3% lower than guidance due to Kamoa’s electricity shortage in 1Q24.

The YoY surge in underlying earnings was driven by disciplined cost control, rising output and higher average selling prices across major products.

Zijin updated its 2025 production guidance for gold and copper production to increase 16% and 8% YoY respectively.

Comparing to previous guidance, copper output is lowered by about 6% and should not be a surprise given Kamoa reduced its 2025 production guidance owing to power issue.

Zijin announced strategic investment and acquisitions recently:
i) enhancing its stake in Julong Copper Mine in Tibet and improve operating efficiency, and
ii) taking a strategic investment in gold resources in the Bankan gold project in Guinea.

While Zijin was added to the Uyghur Forced Labour Prevention Act Entity List, the company commented that the inclusion to the list will not have significant impact given it does not have any assets in the US and has limited direct revenue and earnings from the US.

Share price has risen 14% year-to-date (YTD) and is trading at 9.2x forward price-to-earnings (P/E), which is close to -1 s.d. to historical average.

The preliminary profit announcement demonstrated Zijin’s effective cost control.

We view Zijin as one of the few companies benefiting from increased production volume and encouraging commodity prices.

Its exposure to copper enables the company to benefit from incremental green demand, industrial upgrade and consumer goods trade-in subsidies program as key end-markets include home appliances, new energy vehicles (NEV), renewables and grid.

We finetune our fair value estimate to HKD22.00, which is based on the discounted cash flow (DCF) methodology.

Source: OCBC