Zijin Mining 2899

[winston]

Not vested. My understanding it's 50% Copper and 50% Gold ....

DJ MARKET TALK: Zijin +1.0%; Strong Gold Price View Supports-Tanrich

1106 [Dow Jones] Zijin's (2899.HK) is up 1.0% at HK$6.25, as below-view results should have been priced in after the stock's 3.1% fall month-to-Wednesday vs peer Zhaojin's (1818.HK) 6.0% rise over the same period.

Under IFRS, Zijin's FY10 net profit rose 35% to CNY4.81 billion, below the average CNY5.24 billion forecast based on Thomson Reuters.

While below market expectation, it's in line with the company's guidance announced in January of a 30%-40% on-year rise in its FY10 net profit.

"I believe Zijin remains attractive given the strong outlook for gold prices in 2011," says Tanrich's investment manager Jackson Wong.

He expects the stock could test HK$8.00 in 2011. Based on Thomson Reuters, Zijin is expected to post net profits of CNY6.67 billion and CNY6.90 billion for FY11 and FY12, respectively.


Source: Dow Jones Newswire

[Muhajir]

I sold my shares at $6.50... netted a nice amount!

[winston]

Not vested

Attractive evaluation, continue to buy in

Based on the expectation of continuous growth and rising sales price, we expect that the Company will realize a revenue of RMB32.1 billion and RMB39.7 billion in 2011 and 2012, with an annual growth rate of 15% and 24% respectively, and realize a net profit of RMB5.77 billion and RMB7.33 billion, with an annual growth rate of 20% and 27%, and with an EPS of RMB0.397 and RMB0.504 respectively.

As to its evaluation, with an overview of gold-related stocks, we could find out that they normally enjoy one time premium of valuation compared with the corresponding market index. We evaluated separately the gold and non-gold business of Zijin Mining.

The former will be evaluated with the above method and the latter be evaluated with reference to the valuation of international peers. Also in combination with negative environmental factors and the weak market, we give a conservative rating: 22 times and 10 times PE ratio to 2011EPS for its gold and non-gold business; and the 12-month target price is HKD7.6, 37% premium than current close. We recommend investors to buy in.

Source: Phillips

[winston]

Not vested

Risks

Acquisition behaviors less than expected; Possible environmental incident effect.


Valuation driven` buying recommended

Based on sustainable growth and selling price rise expectation` we predict the company may realize RMB31 billion and RMB37.3 billion turnover in 2011 and 2012 respectively` increasing by 12% and 20% year on year` achieving RMB6.132 billion and RMB7.362 billion net profits` up 27% and 20%. EPS is RMB0.28 and RMB0.34.


In terms of evaluation` gold share analysis discovers evaluation generally has 100% premium over the market index.

For Zijin Mining` we separately evaluate its gold and non-gold business` the said method applies to the former` but evaluation of international similar companies is considered for the latter.

Combined with the current weak momentum` we prudently evaluate the two businesses as PE 20X and 8X corresponding to EPS in 2011` 12-month target price is HK$5.41` 47% premium over the current price` thus buying is recommended.

Source: Phillips

[winston]

DJ MARKET TALK: Zijin Down 5.3%; May Offer A Buy Opportunity

1040 [Dow Jones] Zijin Mining (2899.HK) falls 5.3% to HK$3.39, lagging peer Zhaojin Mining's (1818.HK) 1.4% decline to HK$13.78, hurt by news three workers were killed in an accident Thursday at its wholly-owned subsidiary, Zijin Copper.

Still, while this rekindles investor concerns about safety issues, and a short-term production disruption is likely, any financial impact doesn't appear to be significant.

Further weakness from here for Zijin may be a buy opportunity, given renewed strength in gold prices (gold is up for four straight weeks for a 10.6% gain) and Zijin's valuation discount versus Zhaojin.

Based on Thomson Reuters consensus, Zijin is trading at 8.6X FY12 earnings, compared to Zhaojin's 14.4X.

Source: Dow Jones Newswire

[winston]

not vested

DJ Zijin Estimates 2011 Net Profit CNY5.80 Bln, Up 20%

HONG KONG (Dow Jones)--Zijin Mining Group Co. (2899.HK), China's largest gold producer by output, estimated Friday net profit for 2011 totaled CNY5.80 billion, up 20%.

The on-year increase was driven by higher sales prices for gold and other major products, the company said, adding it recorded CNY4.83 billion net profit in 2010.

It estimates operating revenue for last year totaled CNY39.82 billion, up 39.5% from CNY28.54 billion, the company said in a statement.

The estimated results are unaudited, Zijin said, adding the audited performance is due to be announced in March.


Source: Dow Jones Newswires

[winston]

Zijin (2899 HK) as our top pick among gold and gold miners.

a) Zijin Mining (Zijin) already outperformed gold and other gold miners ytd: Zijin rose 30% (vs Zhaojin’s 24% and gold’s 6%).

b) Zijin’s share price has discounted negative news with regard to corporate governance issue.

c) Zijin’s gold reserve will jump by one-third after four acquisitions were announced in 4Q11. Backed by strong cash flow, it may pursue more external growth. Share price has not priced in this strategy shift.

d) Valuation looks attractive compared to its peers and historical average.


Source: UOBKH

[winston]

not vested

DJ MARKET TALK: Zijin Trading At Trough, Buy - Deutsche Bank

1059 [Dow Jones] Deutsche Bank says Zijin Mining's (2899.HK) share price has fallen 32% over the past three months while gold and copper prices have declined 9% and 6%, respectively.

While equities should decline faster than the underlying commodities (due to operational leverage), Zijin has never benefited much from the commodity price upswing.

Meanwhile, the divergence in trading between Zijin's share price and the commodities has increased further and Zijin is now trading at trough P/B levels, DB says and keeps the stock at Buy with a target price of HK$4.35.

Zijin is up 2.0% at HK$2.56 on top of its 3.3% rally Monday.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Zijin +2.4%, Tracking Gold Prices; DB Keeps At Buy

1510 [Dow Jones] Zijin Mining (2899.HK) defies market weakness, rising 2.4% to HK$2.59 taking a cue from the strength in gold prices.

Zijin already rose 2.8% Friday after the Fujian-based gold miner said it plans to take a controlling stake in Australia's Norton Gold Fields (NGF.AU).

Deutsche Bank says the acquisition will not significantly change Zijin's financials as EBITDA generated by Norton (approximately US$50 million in FY12) will only account for less than 3% of Zijin's FY12 EBITDA; therefore, the house keeps its current target price of HK$4.35 and reiterates its Buy rating on Zijin.


Source: Dow Jones Newswire

[winston]

Risks

Gold price performance below expectation;


Capacity release or mining resource expansion below expectation;


Effect of emergencies such as environmental pollution.


not vested

Seriously underestimated, buying recommended

To sum up, we predict the Company will realize turnover of RMB46.1 and 55.1 Billion for 2012 and 2013, realizing net profits of RMB6.007 and 7.81 billion respectively in 2012 and 2013, converted to EPS RMB 0.276 and $0.358.


In valuation, the company performance will maintain continuous growth momentum. We apply the P/E method for valuation.

Historically, the valuation of gold mining company generally enjoys a premium over Hang Seng Index, twice as much on the average. Even in poor-performance H1 2012, the low premium was more than 20%.

As the largest gold mining company, Zijin Mining possesses the largest reserves and output, but it currently has a discount, so we believe it is seriously underestimated.

Even if we cautiously give the company 10-time valuation to the EPS 2013, correspondent to 11% premium over the Hang Seng Index, the company's 12-month target price may still reach HKD4.42, far higher than the present price. We hence maintain buy rating.


Source: Phillips