Zhaojin Mining 1818

Zhaojin Mining 1818

Postby winston » Mon Aug 18, 2008 9:03 am

Gold miner's first-half net jumps 34pc
KathyWang

Gold producer Zhaojin Mining (1818) said net profit rose 34.56 percent in the first six months on the back of higher gold prices, although it posted a lower profit margin.

The Shandong-based firm said net income rose to 214.4 million yuan (HK$243.77 million), or 0.15 yuan a share, from 159.3 million yuan, or 0.11 yuan, a year earlier. Revenue jumped 41.79 percent to 751 million yuan.

Zhaojin's average sales price of its gold traded on the Shanghai Gold Exchange was 209.35 yuan per gram - 29.51 percent higher than in the previous year.

In a statement filed with the Hong Kong stock exchange, Zhaojin said its sales costs surged 77.53 percent to 346 million yuan during the first six months.

Gross profit margin declined 53.96 percent during the same period, due to the higher sales volume of purchased gold and a lower gross profit margin on newly acquired mining enterprises. The company, which operates five mines in eastern Shandong province, produced 110,727 ounces of gold in the first half - 7.3 percent more than a year earlier.

Zhaojin shares dropped 4.9 percent to HK$5.40 on Friday. They have fallen 41 percent in the past month.
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Re: Zhaojin Mining 1818

Postby winston » Tue Nov 11, 2008 12:11 pm

Shanghai Yuyuan to buy 10.9pc of Zhaojin Mining

Shanghai Yuyuan Tourist Mart, a Chinese retailer of gold and jewelry, said it plans to buy a 10.9 percent stake in Hong Kong-listed Zhaojin Mining Industry for 394.3 million yuan (HK$448.53 million).

Shanghai Yuyuan plans to buy the stake from its largest shareholder, Shanghai Fosun Industrial Investment, a unit of Fosun International, which also owns Zhaojin Mining, the retailer said.

Shhanghai Yuyuan and its unit Shanghai Laomiao Gold will own 26.2 percent of Zhaojin Mining after the purchase, Zhaojin Mining said.

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Re: Zhaojin Mining 1818

Postby winston » Sun Jan 25, 2009 5:32 pm

20090116 Macquarie Zhaojin Mining
Best leverage to gold

Event

We have an Outperform rating on Zhaojin Mining with a price target of HK$6.20 based on DCF valuation and adjusted for Macquarie’s recent commodity price forecast changes. Coverage has been transferred to Xiao Li.

Impact

The gold price is on the rise: With the US trade deficit still high, we are bullish on the gold price. Despite recent euro weakness, investors should consider gold as being near its lows in terms of pricing. Before the US economy bottoms, gold should be the best counter-cycle play.

M&A opportunity: Zhaojin has a track-record of conservativeness since its listing. In the current environment, we highly value its conservative approach. The company has been talking to several potential targets. With its healthy balance sheet, we believe more value-creating deals could occur in the future.

Expansion on track: Zhaojin’s production track record has been poor, but we understand that the expansions at mines in Xiadian and Dayinggezhuang are almost finished. It could achieve double-digital output growth in 2009.

Gold price seasonality: Over the past 20 years, gold prices have tended to remain weak in the first half and become stronger in the second half of the year. This is the risk to our Outperform call.

Earnings revision
We have decreased our 2009 and 2010 EPS forecasts by 19% and 7%, respectively.

Price catalyst
12-month price target: HK$6.20 based on a DCF methodology.

Catalyst: 2008 annual result announcement on 4 March. We expect the company to meet expectations.

Action and recommendation
Zhaojin’s valuation has been discounted due to its small market capitalisation. We recommend Outperform on the stock as we remain bullish on gold prices. Zhaojin is best leveraged to gold price increases, with stable production growth, conservativeness in M&A and a good track record on cost control.
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Re: Zhaojin Mining 1818

Postby winston » Mon Feb 09, 2009 3:39 pm

DJ MARKET TALK:Macquarie Ups Zhaojin Target To HK$8.10 Vs HK$6.20

1427 [Dow Jones] STOCK CALL: Macquarie raises Zhaojin (1818.HK) target price to HK$8.10 vs HK$6.20, after adjusting valuation multiple. Says new target price still reflects 15% discount to global peers, 50% discount to Zijin (2899.HK).

Adds, current share price implies long-term gold price of US$805/oz, while target implies US$900/oz. "Before seeing a clear signal for a U.S. recovery, gold is still one of the best assets in a year of turbulence, we believe," says Macquarie. No change in earnings forecasts. Keeps Outperform. Stock up 1.8% at HK$7.90 midday.
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Re: Zhaojin Mining 1818

Postby winston » Wed Feb 11, 2009 10:54 am

DJ MARKET TALK: UBS Cuts Zhaojin Mining Target 63.1% To HK$9.30

0936 [Dow Jones] STOCK CALL: UBS cuts Zhaojin Mining (1818.HK) target to HK$9.30 from HK$25.20, after lowering DCF valuation for existing assets by 16% to CNY5.8 billion from CNY6.9 billion. Lowers 2008-10 output estimates 16%, 23%, 12% respectively, to reflect slower growth at both new, existing mines; raises 2009-10 cost estimates 20%-32%.

Cuts 2008 EPS estimate to 42 fen from 53 fen, cuts 2009 EPS estimate to 44 fen from 56 fen. Keeps at Buy as rising gold price in 2008-2009 should help offset lower production, higher costs. Stock ended down 0.3% at HK$7.80 Tuesday.
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Re: Zhaojin Mining 1818

Postby winston » Wed Feb 25, 2009 10:08 am

DJ MARKET TALK:Zhaojin +0.5%; Pure Gold Play, Guoco Eyes HK$10.50

1508 [Dow Jones] Zhaojin (1818.HK) +0.5% at HK$9.24, reversing early losses (intraday low of HK$8.90), outperforming vs Zijin (2899.HK), which down 1.2% at HK$4.85. Zhaojin stock benefitting most from recent gold price strength (+12% year-to-date), as gold has about 90% contribution to company's earnings, while Zijin has only 60%-70%, says Guoco Capital;

"As a pure gold play, we believe Zhaojin is the major beneficiary of the rising gold price." House raises average gold price assumption for 2009 to $950 per ounce from $910/oz, lowers production cost assumption thanks to dropping raw material cost. Keeps Buy rating, targets HK$10.50, based on 19X 2009 P/E
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Re: Zhaojin Mining 1818

Postby winston » Mon Mar 09, 2009 10:03 am

DJ MARKET TALK: Zhaojin May Outperform; FY Results Beat View

0824 [Dow Jones] Zhaojin (1818.HK) may outperform after stronger-than-expected results, with its 2008 net profit +37.4% on-year at CNY533.91 million, vs CNY484 million tipped by Thomson Reuters's poll of 9 analysts.

As gold now viewed as safe-haven investment amid volatility in equity markets, Zhaojin set to benefit from strength in gold price, with company's plan to invest CNY500 million to acquire gold resources and boost production capacity in 2009.

Stock ended +1.5% at HK$8.03 Friday, with 20-day moving average of HK$8.46 as near-term cap
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Re: Zhaojin Mining 1818

Postby winston » Mon Mar 09, 2009 11:57 am

DJ MARKET TALK: Zhaojin +4.1%; FY Strong, Guoco Keeps At Buy

1034 [Dow Jones] Zhaojin (1818.HK) +4.1% at HK$8.36 post-results, after 2008 earnings better-than-expected (net profit +37.4% on-year); Guoco Capital's Becky Yuen says Zhaojin's net profit was 5% above her forecast. Says growth of self-produced gold strong (+7.3% on-year) in 2008, which likely to support more upside in stock with its heavy reliance on gold operation.

While company plans CNY500 million to acquire gold resources and boost production capacity in 2009, Yuen says amount smaller vs CNY780 million in 2008, but "it's better to be more conservative" amid prevailing volatility in market and global economic downturn.

Keeps stock at Buy, target at HK$10.50. Stock's early high at HK$8.46, also marks its 20-day moving average, likely an immediate cap
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Re: Zhaojin Mining 1818

Postby winston » Fri Jun 12, 2009 8:03 am

Not vested. From Dr. Check, The Standard HK

======================================

Economist Andy Xie thinks gold can reach US$2,000 an ounce in two to three years. Currently it is trading around US$955 an ounce.

Zhaojin Mining (1818) is worth considering. The gold miner listed in December 2006 at an IPO price of HK$12.68. It issued a bonus share at a ratio of one for one in April last year.

If you have been holding this stock since it listed, your cost would be HK$6.34. Besides, you would have received a dividend of 80 HK cents. At its close yesterday of HK$13.46, Zhaojin has had a 24 percent return in the last 2 years. During the same period, gold surged 47 percent from US$650 per ounce.

Zhaojin is an alternative to buying gold, offering you higher positive gearing.
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Re: Zhaojin Mining 1818

Postby winston » Thu Sep 17, 2009 8:41 am

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

Zhaojin Mining (1818) is a gold miner that is worth looking at. It is estimated that its net profit can rise 20 percent for every 10 percent rise in the price of gold. Zhaojin is China's No2 gold miner in terms of reserves.

Last year, its gold reserves that can be mined amounted to 165.29 tonnes. Total output reached 17,619 kilograms.

Revenue rose 42 percent to 2.15 billion yuan (HK$2.44 billion) and net profit was up 43.1 percent to 538 million yuan. Zhaojin was listed in December 2006 at an IPO price of HK$12.68 when gold was around US$630 an ounce. In October 2007, Zhaojin shares hit a peak of HK$44.90 when the metal surpassed US$800 for the first time.

However, although gold climbed above US$1,000 in March last year, Zhaojin's share price fell to around HK$36. It distributed a one-for-one special bonus in April last year.

The stock plunged to a historical low of HK$1.86 in October when gold fell back to about US$700.

Yesterday, Zhaojin closed 9.3 percent higher at HK$14.78 as gold rose to US$1,015 per ounce.

Dr Check believes gold can climb to US$1,300 per ounce next year. So it could be worthwhile picking up some Zhaojin shares when they dip.

http://www.thestandard.com.hk/news_deta ... 90917&fc=7
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