Northeast: Gold price expected to maintain long bull market. Zijin Gold International (02259) rated as "buy".

Northeast issued a research report stating that considering the expected long-term bull trend in gold prices, combined with ZIJIN GOLD INTL's strong ability to acquire resources, operate mines, and realize production, the company deserves a higher valuation and has been given a buy rating. The bank predicts the company's net profit attributable to the parent in 2025/2026/2027 to be approximately 12.9/22.7/28.4 billion US dollars, with a year-on-year growth rate of 169%/75%/25%. The company currently has an equity gold resource of 1812.7 tons and an equity gold reserve of 851.9 tons (considering the RG gold mine in Kazakhstan). As of the end of 2024, the reserve/production ranks around 10th globally. Most of the management team are from ZIJIN MINING, with backgrounds in mining and hands-on experience in the industry. Key points from Northeast are as follows: Where does ZIJIN GOLD INTL excel in? 1) Resource acquisition capability: Lower acquisition costs, with an average acquisition cost of $61.3 per ounce of gold for the company from 2019-2024, lower than the industry average of $92.9 per ounce, and the acquired mines continue to increase reserves, for example, the resource volume of the Rosebel and Akeim mines increased by over 70% as of the end of 2024 since acquisition. 2) Mine operation capability: By improving stripping ratios and ore grades, adjusting ore processing technologies to increase recovery rates, the company can turn previously unprofitable mines into profitable ones; the company's average ore grade is only around 1.4g/t, but the AISC cost is around $1400-1500 per ounce, ranking 6th among the top 15 gold producers in terms of cost, and the company's costs have stabilized from 2024-2025H1. 3) Production realization capability: The company's production growth rate of 21% over the past three years is the fastest among large gold stocks, and the production realization rate after the fact is high (99%/101%/103% in 2022-2024 for 6 producing mines), and with future organic growth and external mergers and acquisitions, the company's gold production CAGR is expected to continue at a high rate of over 15%. Gold prices are expected to maintain a long bull trend 1) Medium-term outlook: Global central bank gold purchases maintain over 1000 tons annually, coupled with continued enthusiasm for buying gold by Chinese funds, leading to gold prices breaking away from traditional frameworks. Against the backdrop of the Fed maintaining a rate-cutting cycle and the US economy showing signs of stagflation, European and American funds have also significantly turned to gold this year, diverse buying pressure will continue to support the gold bull market. 2) Long-term outlook: The global trend of fiat currency depreciation and geopolitical confrontation forms the basis for the current super bull market in gold. On one hand, the US fiscal expansion is cyclical, with the government debt continuously expanding; on the other hand, the Fed's independence is being challenged, especially as the Trump administration selects a new Fed chairperson, fiscal policy may overshadow monetary policy to move towards expansion, further opening up room for gold prices to rise. Geopolitical tensions are also expected to continue to attract various buyers to reduce the US dollar assets in their portfolios and shift towards gold.