BofA-SD Gold(H A) 1H25 NPAT 百分之84-百分之121 YoY, beat；earning gain momentum on sustained high gold px-20250714

1H25 NPAT +84%-121% YoY at RMB2.55-3.05bn, beat

Shandong Gold announced profit alert after market close today, expecting 1H25 NPAT atRMB2.55-3.05bn, increase +84%-121% YoY. The median of RMB2.8bn is better thanBofA forecast of RMB2.7bn (see our 2Q25 preview report), while achieved 45% of FY25earning of Bloomberg consensus. This implies 2Q NPAT at RMB1.5-2bn, +123%-196%YoY / +49%-97% QoQ. We believe the strong YoY earning is driven by sustained highgold price, with 2Q gold price +42%yoy/ +16% QoQ at $3.3k/oz, coupled with volumegrowth given the commencement of the Namdini Gold mine in Ghana. According to thecompany, in 1H25, the company has optimized its production layout, strengthened coretechnological breakthroughs, and enhance fine management levels. It has achieved acoordinated increase in production efficiency, resource utilization, and projectconstruction speed.

Benefits from higher gold price & Cardinal mine ramp up

Shandong Gold is one of our top picks in our 2H25 outlook report. We have a Buy ratingon Shandong Gold, given 1) our optimistic view on the gold price – The BofAGlobal Research Commodities team raised gold price forecasts to US$3,356/ozand US$3,750/oz for 2025 and 2026, +41%/ 12% YoY, respectively, 2) 8% volumegrowth in 2025 at 50t through commencement of Cardinal mine in Ghana and multiplemine expansion in Shandong (Jiaojia, Xincheng, Sanshandao/ Xiling) to bring +>10% p.a.volume growth in the next five years, 3) the company being a local SOE with stableoperations, with 80% of production in China - thus, it is subject to limited geographicaluncertainty; 4) its unique position as a top pure gold miner in China, which warrants itsvaluation premium; 5) an undemanding valuation of 18x 2025E P/E (vs. 5-year average of20x) and P/B at 2.7x with 16% ROE (vs. 5-year average of 3.1x P/B and 4% ROE).