BofA-Zijin Mining(H A)3Q NPAT 百分之11 QoQ, beat on FV changes gain；lift PO on higher gold price-20251020

3Q25 NPAT +11%QoQ/+57% YoY to RMB14.6bn, beat

Zijin reported 9M25 NPAT at RMB38bn, +55% YoY, implying 3Q25 NPAT at RMB14.6bn,+11% QoQ/+57% YoY, slightly beat our expectation. The earning growth is driven by 1)better ASP: 3Q25 seen LME copper price at US$9,814/t, +3% QoQ/+7% YoY and gold price at US$3,458/oz, +5% QoQ/+40% YoY; 2) volume growth: 3Q mined gold output at 24t, +7% QoQ/+26% YoY, implying 9M25 gold output at 65t, +20% YoY, achieved 76%of FY25 guidance. The output growth is mainly contributed by the ramp up of Akyem mine and Sawaya'erdun mine. Yet, 3Q mined copper output at 263kt, -6% QoQ, mainly due to the suspension of Kakula mine. It implies that 9M25 copper output at 830kt, +5%YoY, achieved 72% of FY25 guidance. 3) better-than-expected cost control: 3Q calculated gold unit cost at RMB280/g, +2.9% QoQ, vs. +8% QoQ cost growth in 2Q.Mgmt. guided that the growing gold unit cost is driven by higher royalty in gold price hike yet is estimated to stabilize with the ramp up of the new acquired gold mines. 3Q calculated mined copper unit cost at RMB25,386/t, +4% QoQ. 3Q financial highlights include: 1) gains from fair-value changes amounting to RMB1.8bn, +129% QoQ/+12%YoY, driven by gains from stock investment; 2) administrative expenses of RMB2.7bn,+27% QoQ/+54% YoY; 3) asset impairment loss of RMB75mn, +429% QoQ/-31% YoY.

Raise PO on higher gold price forecast

We factor in 1) our global commodity team’s latest gold price estimate with US$3,352/oz, US$4,438/oz, US$3,750/oz in FY25/26/27E; 2) the consolidation of newly acquired Raygorodok mine, and 3) the minority interest of Gold Int’l after spin-off. We lift FY25-27E NPAT by 7-13%. We raise DCF-based POs of H-share by 8% to HK$40/sh applying a WACC of 8% (unchanged) and 2% terminal growth rate (unchanged). Our A-share PO of RMB36/sh is based on 3% A-H discount, in line with one-month average. We reiterate Zijin as one of our top picks, supported by 1) our positive outlook on both copper and gold prices; 2) its strong volume growth with continuous M&As; 3)undemanding valuation: the stock trades at 12.3x FY26e PER and our PO implies 15x FY26e PER, which is still a discount to global copper peers average of 18x.