Business Summary:

Shandong Gold Group is a leading Chinese gold producer, specializing in gold mining, ore processing, and smelting, with integrated operations spanning exploration, refining, and gold-related financial services. The company is the second-largest producer of gold in China by output and its publicly listed subsidiary ranked #1,898 in the Forbes Global 2000.

The company operates major domestic mines in Shandong, Gansu, and Inner Mongolia, while expanding globally through projects in Argentina and Australia. Leveraging its A+H-share listed subsidiary (600547.SH / 01787.HK), it balances cost efficiency with large-scale production.

Financial Summary:

The company reported a net profit of approximately RMB 1.026 billion for the first quarter ended March 31 (with earnings per share of RMB 0.20), representing a 46.62% year-on-year increase. Excluding non-recurring gains and losses, the net profit was RMB 1 billion, up 45%.

The group's operating revenue reached RMB 25.9 billion, marking a 36.8% growth. The weighted average return on net assets (ROE) rose by 1.03 percentage points to 3.59%.

Risk:

1. Gold price dependency: the company’s profitability is heavily tied to gold prices. Fluctuation in gold prices may cause a company’s profits to decrease or increase significantly.
2. Policy Risk: Tightening monetary conditions in US/China may reduce investment demand.
3. Operational Risk: Rising production costs could pressure margins despite higher gold prices
4. Geopolitical risks: the group has extensive overseas business, and geopolitical conflicts and policy changes may have an impact on the operation of overseas assets.

Trading Strategy:

52-week high: $28.15 (June 20, ex-dividend)

Buy range: $25.5-26.5

Targets: $30 (mid-term), $35 (long-term)

Stop-loss: $24

References

www.hkex.com.hk 

www.etnet.com.hk

www.sd-gold.com、

I, Yvonne Chen, am a licensed person under the Securities and Futures Commission. Until the date this commentary was published, neither I and/or my affiliates are the beneficiary of the securities mentioned herein or are entitled to any financial interests in relation thereto.