Hong Kong Gold Industry Group (02623) Releases Dual Trillion Development Strategy Plan Outlining a New Era for Hong Kong Gold Industry

On June 3, the Main Board-listed company ADD NEW ENERGY (02623) officially completed its name change, with the new full name being changed to "Hong Kong Gold Industry Group Limited" and the stock abbreviation updated to "Hong Kong Gold Industry Group". This name change is not just a simple rebranding, but rather the culmination of a series of strategic initiatives since the change in controlling interest in October last year. At the same time, the company announced its future ten-year development strategic plan, officially proposing the "Six Ones" development goals. With a clear and quantifiable set of indicators, the company declared its entry into the full gold industry chain sector to the capital market and officially embarked on a new journey to build a top-tier gold industry group in the Asia-Pacific region. Behind the name change: Strategic precedence The brewing and implementation of this name change have always followed the underlying business logic of strategic precedence. In October last year, Wu Zhenxing and his wife, together with senior investment banking expert Mr. Wu Haiqin, acquired a controlling stake of 55.6% in ADD NEW ENERGY through Hong Kong Gold Group Holdings Limited (HKGG), injecting new development momentum into the company. The new management team then completed the board restructuring, forming a professional board of directors composed of 18 senior experts. In January of this year, the company initiated a rights issue plan, issuing 175 million shares at a net fundraising of approximately HK$503 million at a price of HK$2.88 per share, with 70% earmarked for the acquisition and investment in gold mining resources. With the funds in place, the company rapidly progressed its global gold mining layout with high efficiency. In February this year, the company subscribed for approximately AUD$39.5 million worth of shares in Australian listed company Horizon Minerals Limited (HRZ.AX) for approximately 36.57 million shares, accounting for 9.95% of its issued share capital, officially entering the gold mining field. Just over a month later, the company made another strategic move by acquiring 37.7 million shares of HRZ.AX for approximately AUD$40.716 million, increasing its stake to 19.97% and becoming its largest shareholder. HRZ.AX's core assets are located in the Kalgoorlie gold mining belt in Western Australia, with mineral resources of 34.32 million tons and approximately 1.88 million ounces of gold as of February this year. The Burbanks project under HRZ.AX has significant exploration and resource expansion potential. Meanwhile, the company's domestic precious metal resource layout was also underway, with plans to acquire a 20% stake in Guixi Baojia Mining for approximately RMB 221 million, officially venturing into silver mining and processing. It was after the substantial deployment of these assets that the company announced its name change proposal on April 2 this year and received high approval with 100% votes in favor at the shareholder special meeting on April 29, clearly signaling the company's steadfast determination and strong execution in strategic transformation to the market. Ten-year vision: "Six Ones" goals and "Three-step" strategy The "Hong Kong Gold Industry Group Future Ten-Year Development Strategic Plan (2026-2035)", released synchronously on June 3, is the comprehensive outline of the company's transformation into a gold industry, focusing on the grand vision of creating a hundred billion gold industry group. It puts forward the "Six Ones" development goals, constructing a complete and clear strategic objective from six dimensions - resource reserves, production capacity, industry chain layout, profitability, market capital value, and strategic reserves: 1. Gold Mine End: Acquire 10 large and medium-sized gold mines globally. 2. Resource End: Retain gold resources of up to 1000 tons, laying a long-term foundation for development. 3. Production End: Achieve an annual gold production of over 10 tons, entering the ranks of international large and medium-sized gold producers. 4. Profit End: Achieve total annual profits of HK$10 billion, nurturing strong and sustainable profitability. 5. Capital End: Drive market capitalization above HK$100 billion, maximizing shareholder value. 6. Asset End: Establish a strategic reserve of 100 tons of physical gold as a solid foundation for the company's strategic reserves. To achieve these ambitious strategic goals, the company has formulated a robust "Three-step" strategy: - Phase One Infrastructure Construction Period: Complete the acquisition of the initial 2-3 large and medium-sized gold mines, increase resource reserves by 200-300 tons; achieve a gold production of 2-3 tons and revenue of HK$2-2.5 billion by 2027; support market capitalization breaking through HK$10-15 billion, establishing a professional image of a gold industry group. - Phase Two Rapid Expansion Period: Accumulate completed acquisitions of 6-7 gold mines, with resource reserves reaching 600-700 tons, ranking among the forefront of domestic gold enterprises; achieve a gold production of 6-8 tons, revenue of HK$5-6 billion, and annual profits of HK$2-3 billion; establish a mature overseas operation system and form a cross-timezone production layout. - Phase Three Industry-leading Period: Achieve the comprehensive realization of the "Six Ones" strategic goals, gold resources exceeding 1000 tons with an annual production exceeding 10 tons; enter the top 10 gold producers in the Asia-Pacific region, deeply engage in industry standard setting, and build a complete eco-system of the entire industry chain. Core strength: Hong Kong location + Comprehensive industry chain layout As a Main Board-listed company rooted in Hong Kong, the company fully leverages Hong Kong's unique position as the "world's second-largest international financial center" and "global gold trading center" to build a distinctive and differentiated core competitiveness. Hong Kong's gold trade volume ranks among the top globally, with cross-border flow totaling around 1,650 tons in 2024, accounting for 25-27% of global seaborne trade volume. Leveraging this advantage, the company is developing refining business in Hong Kong, aiming to gain additional profits of around $45-50 per ounce: compared to the mainland's 13% value-added tax, Hong Kong's zero-tariff policy can save $30-40 per ounce in comprehensive taxes; LBMA's fast-track certification can generate an additional premium of $5-8 per ounce; Hong Kong's mature super logistics network and offshore dual-currency settlement center will further reduce operating costs and create cross-market arbitrage opportunities. In terms of industry chain layout, the company is committed to building a comprehensive gold industry group integrating upstream mining, midstream refining, downstream trade retail, and financial services. - Upstream: Implementing a precise global resource acquisition strategy, focusing on high-quality gold mines in China, Oceania, Africa, and South America, prioritizing mines that are producing or ready for production, and gradually configuring them in batches following the "producing, under construction, and reserves" approach. - Midstream: With the Hong Kong refining plant as the foundation, the company is building an industrial model of "front store, rear factory" in Shenzhen Shuibei, firmly grasping cost advantages. - Downstream: Promoting gold trade and financial services, developing diversified financial products such as gold ETFs, options, expanding into gold leasing, mortgages, and other comprehensive financial services, and advancing gold digitalization (such as the GoldZip model). Additionally, the company plans to establish a mining investment fund to leverage upstream resources and establish a strategic reserve of 100 tons of physical gold as the company's cornerstone. Capital market: Global M&A drives sustained market value growth This strategic transformation and name change will reshape the company's valuation system comprehensively. The core pricing variables in the gold industry are resource volume, proportion of mine profits, and the ability to expand through subsequent mergers and acquisitions. The PE ratio of gold companies with production capacity averages at around 12 times, significantly higher than the PE ratio of nearby producing companies at 5.7 times. The company plans to gradually increase the proportion of mine business profits through continuous resource mergers and acquisition and production capacity release, driving the center of valuation upwards. According to the plan, the company aims to achieve a revenue of HK$100 billion and a total annual profit of HK$10 billion by 2035, with a valuation target of PE 10-15 times, corresponding to a target market value of HK$1-1.5 trillion. To achieve this goal, the company has developed clear capital market strategies: continuously acquiring high-quality gold mine resources globally through equity and bond financing, implementing equity incentives and business spin-offs; by 2030, increasing the dividend payout ratio to 50-70%, maintaining long-term stability to create satisfactory investment returns for shareholders, clearly conveying the company's strategic value to the market. Looking at the development history of global gold industry leaders, continuous external merger and acquisition is the core path to achieve leapfrog growth in corporate value. Canadian company Agnico Eagle has significantly outperformed its peers over the past 20 years through continuous mergers to expand its resource volume; domestic companies like Zijin Mining Group and Chifeng Jilong Gold Mining have also opened up growth opportunities through overseas resource integration. The core management team of the Hong Kong Gold Industry Group has deep mining investment background and rich capital operation experience, with past investments covering a portfolio of several Hong Kong-listed gold mining companies such as Zijin Gold Intl, Wanguo Gold GP, Chifeng Jilong Gold Mining, Zhaojin Mining, and Lingbao Gold. With the deepening of the company's strategic transformation and more high-quality gold assets coming into play, it is expected to replicate the growth path of industry leaders, achieving a leap from a billion to a trillion market value. Conclusion: Pioneering a new era for the Hong Kong gold industry From "ADD NEW ENERGY" to "Hong Kong Gold Industry Group", this name change is not just a strategic transformation for a listed company, but also an important milestone in the development history of the Hong Kong gold industry. The company actively responds to the national "Fifteen-Year Plan" and the strategic deployment of the Hong Kong SAR government to build a "global gold trading center", positioning the gold industry chain as the direction of strategic transformation to become a leading enterprise in driving the development of the Hong Kong gold industry. Standing at a new historical starting point, the Hong Kong Gold Industry Group will leverage Hong Kong's location advantage and international financial center status to integrate global gold resources and build a complete industry chain ecosystem. With the steady implementation of the company's development strategy and the gradual realization of the "Six Ones" goals, the company is expected to grow into a top-tier comprehensive gold industry group in the Asia-Pacific region over the next decade. This will create continuous and stable returns for all shareholders, while contributing core strength to Hong Kong in establishing a globally influential gold trading center, jointly pioneering a new era for the development of the Hong Kong gold industry.