FIRST SHANGHAI: Maintains "Buy" rating for CHINAGOLDINTL (02099) with a target price raised to HKD 167.07

FIRST SHANGHAI released a research report stating that it maintains a "buy" rating for CHINAGOLDINTL (02099) and raised the target price to HK$167.07. The bank believes that the resumption of production at the Jiamamine is not only a turning point for the company's performance, but also the beginning of a new growth cycle. The company's "three-step" plan is key to unlocking the next phase of production capacity bottleneck, directly driving a significant increase in copper, gold, and other major metal production. Coupled with the expectation of sustained high copper and gold prices in the current global macroeconomic environment, as well as the significant cost advantages of the Jiamamine itself, the bank expects the company's future profitability to experience explosive growth. The huge potential of peripheral exploration has opened up longer-term imagination space for the company. The main points of FIRST SHANGHAI are as follows: Copper and gold price boom cycle provides strong tailwinds As the "profit cow" of the company, the stable operation of the Jiamamine is the cornerstone of the company's value. The second phase of the Jiamamine plant selection has successfully resumed operation on May 30, 2024 and quickly reached a stable processing volume of 34,000 tons of ore per day. In the first half of the year, the company's gold production and copper production increased by 69% and 230% year-on-year, showing a stronger than expected recovery momentum. Coupled with the expectation of sustained high copper and gold prices in the current global macroeconomic environment, as well as the significant cost advantages of the Jiamamine itself, the company's future profitability is expected to experience explosive growth. The "three-step" expansion plan of the Jiamamine, high visibility of medium- and long-term growth The company's management recently announced a clear "three-step" development strategy for the Jiamamine. The first phase aims to increase the processing capacity from the current 34,000 tons to 50,000 tons per day by mid-2027; the second phase aims to increase the normal daily processing capacity from 50,000 tons to 80,000 tons, and increase the low-grade ore heap leaching process, with a heap capacity of 30,000 tons per day, for a total daily processing capacity of 100,000-120,000 tons. The third phase aims to increase the daily processing capacity from 80,000 tons to 200,000 tons. This strategy focuses on short-term stable production, medium-term expansion, and long-term exploration, aiming to fully unleash the huge potential of the Jiamamine's world-class mineral resources. Peripheral exploration is expected to create another Jiamamine The company has huge potential for increased reserves of Jiamamine resources. Currently, the company's exploration projects in Zegulangbei and Bayi Ranch are progressing in an orderly manner, with the two mining areas already showing huge resource potential, and as of July 8, 2025, the 2-kilometer connecting road and 5.9 square kilometers of soil samples in the mining area have been completed. After the update of the resource amount, expanding and increasing production capacity may become the main driving force for future performance growth.