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Buffett Apprentice[HK IPO] Zijin Gold International, it's my turn to win the lottery this time
The company is one of the world's leading gold mining companies formed by the consolidation of all Zijin Mining's gold mines (excluding those in China). Leveraging Zijin Mining's competitive advantages in the exploration, development, and operation of low-grade and hard-to-process resources, we have become a globally leading gold mining company primarily engaged in the exploration, mining, beneficiation, smelting, refining, and sales of gold. Through global mergers and acquisitions, we integrate high-quality gold mining resources and utilize capabilities in geological exploration, research and development ("R&D"), engineering, construction, and mine operations, along with an international ESG system, enabling us to achieve continuous reserve and production growth with efficient operations.
The company began its IPO on September 19, with an offer price of HKD 71.59, 100 shares per lot, a minimum subscription of HKD 7,231.19, a market cap of HKD 187.851 billion, and an issuance of 349 million shares. It belongs to the gold and precious metals industry and has a greenshoe option.
The sponsors are Morgan Stanley and CITIC Securities. Morgan Stanley's sponsored projects had an 80% first-day gain rate over the past two years, while CITIC Securities' sponsored projects had an 86.2% first-day gain rate. The sponsors' overall performance is excellent.
There are 29 cornerstone investors, including the Government of Singapore Investment Corporation, Hillhouse Capital, BlackRock Group, Schroders Group, Gaoyi Asset, Shanghai Gaoyi, Fidelity Fund, Shanghai Jinglin, Hong Kong Jinglin, Baillie Gifford, China Taiping Investors, Taikang Life Insurance, China Universal Investors, UBS Asset Management, GF International, Dao Yi Capital, New Golden Future Limited, RBC Global Asset Management, IHKL, CPE River, Oaktree Capital, Mirae Asset Financial Group, Wells Fargo Hong Kong and Wells Fargo Fund, IDG Breyer Fund, Arc Avenue, Greater Bay Area Homeland Investments, Millennium Fund, SMG Management, and Spackman International Limited;based on the offer price, the cornerstones subscribed to a total of USD 1.6 billion, accounting for 49.9% of the total issuance, with a high cornerstone ratio.
In 2024, the world's top 15 gold producers contributed approximately 30.5% of global gold production. Among these leading companies, our group ranked 11th globally in 2024, with a total gold production of 1.5 million ounces (45.3 tons) from its seven mines. Additionally, among these producers, our group achieved a compound annual growth rate (CAGR) of 21.4% from 2022 to 2024, ranking first in production growth.
The company's revenue from 2022 to 2024 was HKD 1.818 billion, HKD 2.262 billion, and HKD 2.9 billion, respectively, with a year-on-year revenue growth of 32.16% in 2024. Net profit for 2022 to 2024 was HKD 290 million, HKD 322 million, and HKD 621 million, respectively, with a year-on-year net profit growth of 92.62% in 2024.
At the offer price, the market cap is HKD 187.851 billion, with an issuance of HKD 24.985 billion, representing 13.3% of the total. Cornerstones locked in 49.9%, leaving a free float of HKD 12.742 billion, which is quite large. This issuance adopts Mechanism B under the new Hong Kong IPO rules, with an initial public offering share of 10%, no clawback mechanism, cornerstones accounting for 49.9%, and institutional placement at 40.1%. This allocation ratio is quite ideal. The current subscription multiple is 13.84times, and subscription interest seems lukewarm, as investors have focused on Chery Auto. Once funds are released, they are expected to flow into Zijin Gold International, with the final multiple likely exceeding 300 times.
Subscription Strategy:
Zijin Gold International is a globally leading gold mining company spun off from Zijin Mining, ranking 11th globally with the highest production growth. The sponsors are Morgan Stanley and CITIC Securities,whose overall performance is excellent.29 cornerstone investors subscribed toUSD 1.6 billion, accounting for 49.9% of the total issuance, with a strong and high cornerstone ratio. The company's performance is also outstanding, with a 92.62% year-on-year net profit growth in 2024. At the offer price, the market cap is HKD 187.851 billion, with an issuance of HKD 24.985 billion and a free float of HKD 12.742 billion, which is substantial. The current subscription multiple is 13.84 times, and subscription interest seems lukewarm, but once funds from other IPOs are released, the final multiple is expected to exceed 300 times. I haven't been allocated shares in recent IPOs, but this one has ample supply—everyone should get a piece. It's finally my turn! I plan to go all-in!
My views are personal and do not constitute investment advice. The stock market carries risks; invest with caution!
Follow me: Retail Investor Lao Yu
$ZIJIN GOLD INTL(02259.HK)
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