[Zhenzhuo Institutional View] Zijin Mining (02899.HK): Three-Year Production Expansion Plan

$ZIJIN MINING(02899.HK) demonstrates strong growth momentum, with market forecasts predicting its 2026 revenue will reach RMB 464.3 billion, a year-on-year increase of 23.2%; earnings per share are expected to be RMB 2.7, a significant increase of 39.2%.

In terms of business segments, copper operations remain the core profit engine, accounting for 46% of the company's total gross profit, and benefit from the structural demand driven by the national strategic reserve mechanism. The company has announced a three-year production plan, with guidance for 2026 mineral copper and gold production set at 1.2 million tons and 105 tons respectively, representing a year-on-year increase of 10% and 17%; lithium carbonate production is expected to surge by 380% to 120,000 tons. In terms of valuation, if the spun-off businesses are excluded, the price-to-earnings ratio of its gold assets is only about 11 times, showing a significant discount compared to international and domestic peers.

Looking ahead, the company aims to rank in the top three globally for mineral copper and gold production by 2028, with plans to achieve copper production of 1.5 to 1.6 million tons and gold production of 130 to 140 tons by then. It is expected that between 2025 and 2028, the compound annual growth rates for gold and copper production will reach 13-16% and 11-14% respectively, indicating a clear growth outlook.

Source: KGI Securities