Zijin Mining's financial report exceeds expectations

$ZIJIN MINING(02899.HK) Zijin Mining's earnings report exceeded expectations, higher than my conservative estimates.
Mainly driven by the rise in gold prices in Q3. On the other hand, the average shipment price in Q2 was lower than the market bidding price in the same period, which was corrected in Q3.
Non-GAAP net profit expectations were largely in line, with the biggest upside surprise coming from non-operating income driven by Zijin Gold. The 17 billion yuan net profit attributable to the parent company exceeded expectations even more.
Non-GAAP net profit grew significantly year-on-year and quarter-on-quarter. The logic behind Zijin Mining's continued earnings growth is very clear. Rapid growth in gold production capacity combined with rising gold prices. The copper business is growing steadily. The performance is very solid.
After Zijin Gold International was listed, it drove approximately 3.5 billion yuan in non-operating profit growth.
Based on Q3's net profit attributable to the parent company of 14.5 billion yuan, Q4's non-GAAP net profit is expected to be around 14.5-15 billion yuan due to rising gold prices. The net profit attributable to the parent company in Q4 is expected to be around 15 billion yuan (assuming Zijin Gold International's market capitalization remains unchanged).

Zijin Mining's full-year net profit attributable to the parent company in 2025 should be around 52.7-53 billion yuan.
At 53 billion yuan, the corresponding P/E ratio is 18x (neutral to conservative). The corresponding target market capitalization should be around 1.04 trillion HKD.
Compared to Zijin Mining's current H-share market capitalization, there is still about 20% upside in Q4 this year.

Under a neutral-to-optimistic scenario, assuming Q4 gold prices stabilize at $4,300, the full-year net profit attributable to the parent company is expected to reach 55 billion yuan, with the P/E ratio remaining at 18x, implying an upside potential of about 25%.
If sentiment is good, it could happen around December, or more conservatively, likely after the annual report at the end of January.

One last thing:
Look at companies you know and understand, and know when they are undervalued and when to take profits.