HSBC Research raises the target price of Zijin Mining to 43 yuan, maintaining a "Buy" rating

HSBC Research published a report indicating that Zijin Mining (02899.HK) saw a 57% year-on-year increase in profit for the third quarter, slightly exceeding the bank's expectations, mainly benefiting from rising gold prices, increased sales, and one-time gains, which fully offset the impact of rising unit costs. The gross profit margin reached 24%, an increase of 6 percentage points year-on-year, thanks to the rise in gold prices and contributions from new mines. The bank maintains a "Buy" rating on the company, raising the target price from HKD 41.8 to HKD 43, citing attractive valuation.

The bank maintains an optimistic outlook on Zijin Mining, believing that the company's high-quality assets support steady production growth, with a projected compound annual growth rate of 31% in earnings from 2024 to 2027. The simultaneous increase in gold production and prices will enhance gross profit contributions, while the assumptions of rising copper and gold prices will improve earnings predictability. Taking into account the third-quarter performance in 2025, the latest trends in unit costs, and the surge in gold prices, the bank has raised its earnings forecasts for Zijin for 2025 to 2027 by 5%, 10%, and 6%, respectively