Morgan Stanley maintains a "market perform" rating for Shandong Gold Mining (01787) with a target price of HK$20.2.

Morgan Stanley released a research report stating that it maintains a "market-perform" rating on Shandong Gold Mining (01787), with a target price of 20.2 Hong Kong dollars. In terms of medium-term production outlook, the parent company Shandong Gold Mining Group's goal is to reach a gold production of 80 tons within five years. The management of Shandong Gold Mining expects the listed company to make every effort to achieve approximately 90% of the production. The Morgan Stanley report indicates that against the backdrop of rising gold prices, Shandong Gold Mining continues to enjoy a strong profit trend, with the company's production growth coming from the further resumption of production at the Linglong mine as the first reason, the expected start of operations at the Cardinal project in the upcoming season as the second reason, and contributions from its 28.89% shareholding in the subsidiary Jin Tai Gold (000975.SZ) (now known as Shanjin International Gold) as the third reason. The report states that Shandong Gold Mining's Dongfeng Linglong gold mine resumed partial production in December last year, and the local government is expected to obtain safety permits in the second half of this year. Facing the historical highest production of 3.8 tons, the Linglong project is currently producing an annual operating volume of 2 tons. The company's management expects the mine to achieve a production of 3 tons per year once it fully resumes operations. The company also points out that it has not received any notification regarding enhanced safety checks during the National Day holiday in October.