[Earnings Report Analysis] Zijin Mining Group's Financial Report Analysis and Interpretation

On April 22, 2024, Beijing time, Zijin Mining Group (02899.HK) released its financial report for the first quarter of 2024.

1. Revenue and Profit Performance

According to the financial report, Zijin Mining achieved operating revenue of RMB 74.777 billion in Q1 2024, a slight year-on-year decrease of 0.22%. Despite the slight decline in revenue, the company's net profit performance was outstanding, with net profit attributable to shareholders of the parent company reaching RMB 6.261 billion, a year-on-year increase of 15.05%. Basic earnings per share were RMB 0.238, up 14.98% year-on-year. This indicates that Zijin Mining has improved in cost control, operational efficiency, and profitability.

2. Production and Gross Margin Performance

In terms of production, Zijin Mining's gold output increased by 5% year-on-year in January-March 2024, and copper output also rose by 5%, demonstrating the company's strong capabilities in gold and copper mining. However, zinc output decreased by 9% year-on-year, reflecting certain challenges in the zinc mining business. Nevertheless, the company's gross margin for mining operations reached 54.50%, up 0.97 percentage points year-on-year, indicating stable overall profitability.

3. Asset and Liability Status

In terms of assets, as of the end of Q1 2024, the company's fixed assets and intangible assets decreased compared to the end of the previous year, while investments in other equity instruments and cash reserves increased. On the liability side, short-term borrowings and non-current liabilities due within one year increased, while employee compensation payables and other payables decreased. Overall, Zijin Mining's asset and liability structure remained stable, with no significant risk points.

4. Changes in Shareholder Structure

In terms of shareholder structure, the total number of shareholders decreased by the end of Q1 2024 compared to the end of the previous year, while the average shareholding value per household increased, indicating higher concentration of holdings. Additionally, the newly entered Huatai-PineBridge CSI 300 ETF replaced UBS AG as one of the company's top ten circulating shareholders. Some shareholders increased their holdings, while others reduced theirs, reflecting dynamic adjustments in the shareholder structure.

5. Conclusion and Investment Recommendations

Overall, Zijin Mining's Q1 2024 financial report showed strong performance. Despite a slight decline in revenue, net profit and gross margin achieved year-on-year growth. The company also demonstrated stable production growth in gold and copper mining, highlighting its market competitiveness. Based on this analysis, we remain optimistic about Zijin Mining's long-term prospects.

However, investors should also pay attention to challenges in the zinc mining business and changes in the liability structure. We recommend that investors carefully assess the company's fundamentals alongside industry trends and market movements before making investment decisions.

6. Future Outlook

Looking ahead, Zijin Mining will continue to leverage its strengths in gold and copper mining, enhance cost control and operational efficiency, and strive for sustained and stable growth. The company will also focus on improving profitability in its zinc mining business. We expect Zijin Mining to deliver strong performance in future financial reports.$ZIJIN MINING(02899.HK)

Disclaimer: The views expressed herein are personal and do not constitute investment advice. Investors should conduct their own risk assessments and seek professional advice before making investment decisions. The market carries risks, and investments should be made cautiously.