Strong mid-year performance proves high growth potential, does ZHAOJIN MINING embrace opportunities with certainty?

If we were to list the best-performing assets globally since 2024, gold, with its multiple attributes in finance, currency, hedging, and commodities, naturally stands out. This year, amidst weakening trends in US economic data, rising expectations of Fed rate cuts, and frequent geopolitical conflicts, the price of gold has repeatedly hit new highs.

Taking the first half of the year as a observation window, by the end of June, the London spot gold fixing price was $2,330.9 per ounce, up 12.34% from $2,074.9 per ounce at the beginning of the year; the average price for the first half of the year was $2,202.91 per ounce, a year-on-year increase of 14.05%. In China, the Shanghai Gold Exchange's Au9999 gold closed at 549.88 yuan/gram at the end of June, up 14.37% from the opening price of 480.8 yuan/gram at the beginning of the year; the weighted average price for the first half of the year was 514.12 yuan/gram, a year-on-year increase of 18.98%.

With a strong bullish sentiment in the gold market, the performance of related concept stocks naturally echoes the "sound of rising prices". Recently, Zhaojin Mining released its mid-year performance for 2024. The financial report shows that Zhaojin achieved revenue of 4.627 billion yuan in the first half of the year, a strong increase of 34.24% year-on-year. As the revenue scale significantly increased, the company's profit elasticity was released more intensely. During the same period, Zhaojin's net profit and net profit attributable to shareholders were 726 million yuan and 553 million yuan respectively, with year-on-year growth rates as high as 98.82% and 118.62% on a comparable basis.

The steep financial data curve once again confirms Zhaojin Mining's position as a gold giant with tremendous growth potential.

Significant Increase in Revenue and Profit Signals Value Release

A comprehensive and high-quality growth signal is evident throughout Zhaojin Mining's 2024 interim report.

In a favorable market environment, Zhaojin Mining seized opportunities in the first half of the year, vigorously promoting increased production around key areas such as mining engineering, ore dressing management, and product sales. During the reporting period, Zhaojin achieved a total gold production of 13,178.35 kilograms, an increase of 11.98% year-on-year. Among them, mineral gold was 8,997.03 kilograms, an increase of approximately 6.86% year-on-year; smelted and processed gold was 4,181.31 kilograms, an increase of 24.83% year-on-year.

Benefiting from the simultaneous increase in gold production and price, Zhaojin Mining's gold mining business generated revenue of 4.268 billion yuan in the first half of the year, a significant increase of 34.9% year-on-year, accounting for 92.2% of the company's total revenue.

While the gold mining business thrived, Zhaojin Mining's copper mining business also delivered impressive performance. In the first half of the year, Zhaojin's total copper metal production was approximately 4,082 tons, an increase of 54.15% year-on-year. Driven by strong sales volume, the copper mining business of Zhaojin contributed revenue of 170 million yuan during the period, with a year-on-year increase in scale of 32.9%.

In addition, Zhaojin Mining also had a small portion of revenue from other businesses, totaling approximately 189 million yuan during the period.

Compared to the steady expansion of revenue, the profit release of ZHAOJIN MINING during the reporting period was much stronger. In the first half of the year, ZHAOJIN MINING achieved a gross profit of 1.977 billion yuan, an increase of 47.03% year-on-year; with a corresponding gross profit margin of 42.72%, an increase of 3.72 percentage points year-on-year. During the same period, the company's net profit and net profit attributable to shareholders were 726 million yuan and 553 million yuan respectively, both doubling compared to the same period last year.

Seizing the Great Growth Opportunities with Internal and External Linkages

As the clock turned to August, the trend of gold prices can still be described as magnificent.

Recently, influenced by dovish remarks from the Federal Reserve Chairman, gold prices continued to break through upwards. On August 21st, the international spot gold price once reached $2,531.75, hitting a historical high.

Wisdom Finance App believes that as gold prices continue to rise, this naturally indicates that the growth opportunities for gold stocks are still worth paying attention to. Especially for ZHAOJIN MINING, the leading company in the industry, its growth potential is expected to continue to exceed market expectations.

Currently, ZHAOJIN MINING is accelerating the progress of the Ruihai Mining and Selection Engineering, Xiadian Gold Mine, and Dayingezhuang Gold Mine production expansion projects; at the same time, the company is also increasing investment in geological exploration and surveying at various mines, strengthening exploration and resource increase at key mines such as Dayingezhuang Gold Mine, Subei Jinying, and ZHAOJIN North Xinjiang.

In terms of domestic projects, the most eye-catching project in ZHAOJIN MINING's portfolio is the high-grade offshore gold mine. It is understood that the offshore gold mine project is still in the project construction stage, and according to the project plan, the offshore gold mine will be initially completed by 2025. Once fully operational, the offshore gold mine is expected to produce 16-20 tons of gold annually, becoming the largest domestic gold mine, which will significantly boost ZHAOJIN MINING's production and sales levels.

Having a "trump card" in hand, ZHAOJIN MINING seems not content with just that. As a gold giant, ZHAOJIN is firmly seeking overseas projects with an international perspective. In the first half of the year, ZHAOJIN successfully completed the comprehensive tender offer to acquire 100% of the equity of TieTuo Mining.

It is reported that TieTuo Mining owns 88% equity of the Abujar Open-pit Gold Mine project in Cote d'Ivoire, which is one of the top 20 gold mines in West Africa, a globally important gold-producing region. The Abujar project is a traditional low-cost, high-recovery, high-profit open-pit project, with confirmed and estimated ore reserves of approximately 36.7 million tons, a gold grade of 1.15 grams per ton, a gold metal content of 1.36 million ounces, and commercial production was achieved on July 6, 2023.

It is worth mentioning that the above acquisition took 7 months to complete, making it a landmark transaction as the first successful mandatory tender offer acquisition by a Chinese mining company on a global scale.

Shortly after completing the above acquisition, ZHAOJIN MINING made another overseas acquisition, with its wholly-owned subsidiary Xinghe successfully acquiring 60% equity of West Gold Mining for a total consideration of 180 million yuan, thereby indirectly controlling the development of the Komboko Gold Mine by Odelan Company.

Public information shows that the Komboko Gold Mine is located in Sierra Leone, Africa. According to the development plan formulated by ZHAOJIN MINING, in the next phase, the project will expand its mining scale to 1,500t/d on the basis of a good profit foundation, with an annual output reaching 57,000 ounces. According to reports from authoritative institutions, the Komboko Gold Mine covers an area of 100 km², including 8 gold ore anomaly blocks, with a resource ore volume of 4.9403 million tons, a gold metal content of 22,461.85 kg, and an average grade of 4.55 g/t The exploration work before this acquisition was mainly located in one block, with the remaining 7 blocks showing less work and good results. After the acquisition is completed, ZHAOJIN MINING will increase its exploration efforts in other blocks.

Looking back at the financial report, benefiting from the strong performance of gold prices, ZHAOJIN MINING was already in a rising performance trend. With frequent good news of overseas expansion, ZHAOJIN's resource map is constantly expanding. As the saying goes, hearing the song and knowing the elegance, it can be certain that the company's performance growth momentum in the next few years is very strong, and the company is characterized by both growth certainty and high elasticity. With ZHAOJIN MINING balancing prudence and growth expectations, it is obviously worth investors' increased attention in the future