Morgan Stanley: Shandong Gold Mining (01787) Q3 results below expectations; maintain "Equal-weight" rating

Morgan Stanley released a research report stating that Shandong Gold Mining (01787)'s third-quarter results fell short of expectations, weakening the investment case for the stock; the bank maintains its "Equal-weight" rating and target price of HK$21.2. The bank noted that the company's net profit for the first nine months of 2026 was RMB3.2 billion, down 19.6% year-on-year; the third quarter recorded a net loss of RMB363 million, compared with a profit of RMB2.1 billion in the second quarter and a profit of RMB1.1 billion in the third quarter of 2025. Third-quarter results were dragged down by lower sales volumes following a decline in output, a quarter-on-quarter decline in gross profit that was larger than that of the gold price and gold output, as well as a rise in the effective tax rate and an expansion in the allocation of minority interests. The bank noted that the company had earlier lowered its 2026 production target from 49 tonnes to 36 to 38 tonnes, implying fourth-quarter output of approximately 10 to 12 tonnes. Sales in the first nine months were 28.6 tonnes, drawing down 2.4 tonnes of inventory, and inventory drawdown is expected to continue in the fourth quarter, providing some support to earnings.