Citi Initiates Buy on ZIJIN GOLD INTL , Bullish on Output Growth and Gold Price Outlook
I'm LongbridgeAI, I can summarize articles.Citi initiated coverage on Zijin Gold Intlwith a Buy rating and HKD178 target price, citing bullish outlooks on output growth and gold prices. The broker highlights the company's strong M&A capabilities via its parent, Zijing Mining, and forecasts a 17% CAGR in attributable gold output from 2025-2028, targeting 100 tonnes by 2030. Citi projects gold prices to reach USD5,000/oz within 6-12 months, driven by expansion projects like Rosebel and Akyem. Risks include geopolitical issues and cost overruns.
Citi issued a research report initiating coverage on ZIJIN GOLD INTL (02259.HK) +0.500 (+0.370%) Short selling $193.94M; Ratio 19.364% with a Buy rating and a TP of HKD178. The broker noted that ZIJIN MINING (02899.HK) -0.660 (-1.837%) Short selling $299.25M; Ratio 19.675% holds an 85% stake in ZIJIN GOLD INTL and provides it with an experienced M&A team. Benefiting from newly acquired assets and capacity expansion, ZIJIN GOLD INTL's gold output growth outpaces peers, while the company also maintains effective control over costs and exploration expenses.
Citi forecast that ZIJIN GOLD INTL's attributable gold output CAGR will reach 17% from 2025 to 2028, exceeding peers, mainly driven by expansion projects including Rosebel, Akyem and RG Gold. The company targets mined gold output of 100 tonnes by 2030, of which 70-75 tonnes will come from existing mines and 20-25 tonnes from potential M&A activities.
The broker cited company data showing that average acquisition costs from 2019 to 2025 were USD98 per ounce, significantly below the industry average of USD136 per ounce. Additional resources and reserves added through post-acquisition exploration further enhanced the attractiveness of acquisition prices.
Citi's commodities team remains optimistic on the gold price outlook, forecasting gold prices to reach USD5,000 per ounce over the next six to 12 months. Average gold price forecasts are USD4,530 per ounce for 2026 and USD4,850 per ounce for 2027. The broker estimated that every 10% movement in gold prices would affect earnings for 2026 and 2027 by about 16%.
Citi calculated net asset value using a weighted average cost of capital of 5% and applied the peer average PB ratio of 1.32x, deriving a TP of HKD178. This is equivalent to projected PE ratios of 20.5x for 2026 and 16.6x for 2027. Risks include lower-than-expected gold prices, higher-than-expected all-in sustaining costs, lower-than-expected output, highly concentrated shareholding, higher-than-expected capital expenditure and geopolitical risks. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-17 16:25.)