Guotai Haitong: Initiates ZIJIN GOLD INTL (02259) with "Overweight" rating, target price HK$163.8

Guotai Haitong released a research report stating that it expects ZIJIN GOLD INTL (02259) to have EPS of US$1.05/1.25/1.62 per share for 2026-2028, respectively. With reference to comparable companies, a 2026 PE of 20x is applied for valuation, and a target price of HK$163.8 for 2026 is assigned to the company (exchange rate calculated at 1 USD to 7.8 HKD). This is an initiation of coverage with an "Overweight" rating; the bank believes that the company's organic and external growth will jointly drive production increases, and gold output and performance will be released as scheduled. Guotai Haitong's main views are as follows: Global layout of gold mines, with abundant organic growth momentum The company has a global layout of high-quality gold mines, with its gold mines distributed in Central Asia, Africa, Australia, and South America, and possesses outstanding capabilities in global mining operations. In 2025, the company's gold reserves (proven + probable) totaled 917 tonnes, and in 2025 the company added 45.6 tonnes of attributable gold resources, indicating abundant gold resources. The company's core mines such as Rigo Duo, Akim, and Rosebel have strong organic growth momentum and are expected to continue contributing incremental output during 2026-2028. Norton Gold Fields' new 2 million tonnes/year low-grade heap leaching resource comprehensive utilization project was completed and put into trial operation with feed in June 2026. Rigo Duo's new 10 million tonnes/year mining and processing technical renovation project is expected to commence production in Q3 2028. The Rosebel Gold Mine's processing plant expansion of a 10 million tonne mining and processing project is expected to be completed in Q2 2028, and the newly built Saramacca 4 million tonnes/year mining and processing project is expected to be completed in Q3 2028. The Akim Gold Mine's mining and processing system expansion and tailings pond expansion project continues to advance; after completion, annual processing capacity will increase from 8.5 million tonnes to 13 million tonnes, and the project is expected to be completed in Q3 2028. The Gila-Taro Gold Mine's newly built 2 million tonnes/year processing plant to treat low-grade resources will have total processing capacity of approximately 600 tonnes/day after completion, and the project is expected to commence production in Q1 2028. Strong external acquisition capability, with mining layout continuously being implemented In April and October 2025, the company acquired the Akim Gold Mine in Ghana and the Rigo Duo Gold Mine in Kazakhstan, and in July 2025 completed the restructuring of the Porgera Gold Mine (joint venture). In the first half of 2026, the output of the Akim, Rigo Duo, and Porgera gold mines was 4 tonnes, 3.3 tonnes, and 1.3 tonnes, respectively, among which the Akim Gold Mine increased by 2.8 tonnes year-on-year. Backed by Zijin Mining Group, the bank believes that the company's future external acquisitions will continue to be implemented. Good cost control, excellent operational capability In the first half of 2026, the AISC costs of the company's various mines remained stable. The AISC of the Rosebel Gold Mine and Norton Gold Fields in H1 2026 were US$1,701/oz and US$2,146/oz, respectively, both declining year-on-year. The AISC of the Left Bank, Aurora, and Gila-Taro gold mines in H1 2026 were US$2,038/t, US$1,682/t, and US$1,298/t, respectively, all increasing year-on-year. The company's gold production costs are relatively stable, and the company's operational capability is excellent. Risk warnings New project commissioning falling short of expectations, and a sharp decline in gold prices.