HK Stock Market Move | Zijin Mining Group (02899) rebounds more than 4% and being included in Entity List does not have significant impact. The company plans to acquire Zangge Mining, a major lithium miner.

Zijin Mining Group(02899) rose more than 4% in early trading, to 15.08 Hong Kong dollars, with a trading volume of 475 million Hong Kong dollars as of the time of writing. On the news front, Zijin Mining Group and some of its affiliated companies in Xinjiang were included in the UFLPA Entity List. Zijin Mining Group stated that the inclusion of the company and its affiliated companies in the UFLPA Entity List is not expected to have a significant impact on the company. The company will work with a team of American legal experts to study the relevant relief procedures and actively communicate with the relevant U.S. government departments to address the misunderstandings and strive to have the company and its affiliated companies in Xinjiang removed from the UFLPA Entity List. In addition, Morgan Stanley released a research report stating that Zangge is still in negotiations with Zijin Mining Group regarding a equity transaction. Zangge Mining is jointly owned by Zangge Development and the second largest shareholder, New Sha Hongyun Investment Management, with a combined ownership of about 40%. Based on Zangge Mining's current market value of 46.6 billion yuan, with a premium of 30% to 40%, if Zijin Mining successfully completes the acquisition transaction, the estimated transaction value would be 2 to 2.2 billion US dollars (approximately 15.58 to 17.13 billion Hong Kong dollars). The report pointed out that Zangge Mining's key projects are potash and lithium mines in Tibet and Laos. Zijin Mining had previously expressed interest in exploring opportunities beyond gold and copper during the summit hosted by the bank last week.