Furui: Raised Zijin Mining's (02899) target price to HK$38.1, expects annual gold production to exceed guidance.

Furui released a research report stating that Zijin Mining (02899) had a third-quarter net profit after tax of 14.6 billion RMB, an increase of 11% quarter-on-quarter and 57% year-on-year, slightly better than the bank's expectations. The regular net profit after tax was 12.5 billion RMB, an increase of 6% quarter-on-quarter and 50% year-on-year, in line with the bank's expectations. The bank raised Zijin Mining's H shares target price from 29.6 HKD to 38.1 HKD and A shares (601899.SH) target price from 27.3 RMB to 35.2 RMB, both with a "buy" rating. In the period, Zijin's gold production was 23.8 tons, an increase of 7% quarter-on-quarter and 26% year-on-year. The cumulative gold production in the first three quarters of this year increased by 20% year-on-year. The bank noted that due to the recent completion of the acquisition of the Raygorodok gold mine in Kazakhstan, the annual gold production is expected to exceed the guidance of 85 tons, with the latest estimate reaching around 89 tons. As for copper production, the management has revised down the annual guidance from 1.15 million tons to 1.1 million tons, and for 2024 it is expected to be 1.07 million tons. However, the bank believes that the impact on profitability is limited, as the increase in copper prices can offset the decline in production.