Cinda International: Zijin Mining's (02899) global diversified mineral layout favors stock price performance
The Zhitong Finance App learned that Cinda International released a research report stating that Zijin Mining (02899) Group is implementing a global strategy and operating multiple mining projects in 17 countries. The Group completed the delivery of the Akim gold mine in Ghana and the acquisition of the Raygorodok gold mine in Kazakhstan this year, directly increasing gold reserves and expanding its presence in West Africa and Central Asia. Furthermore, the Group completed a holding acquisition of Zangge Mining (000408.SZ) this year, increasing its holding ratio of Julong Copper Mine, adding strategic mineral potassium resource reserves, and further strengthening copper and lithium resource reserves.
Cinda International's main views are as follows:
Major mine shutdowns impact supply, US tariff expectations exacerbate shortages
Since this year, several large mines have stopped production one after another, affecting global supply, and the market has lowered copper production in 2025 and 2026 several times. Meanwhile, the market anticipates that the US may impose a tariff of at least 25% on refined copper by mid-2026. In response to potential import tariffs, large stocks of copper are being transferred to the US, exacerbating shortages in other regions.
AI, green energy and defense three-wheel drive, copper will be in short supply in the next 10 years
As an excellent conductor, copper is widely used in transportation, defense and power networks. Despite the uncertain economic outlook, the market still expects copper demand to grow, mainly due to AI investment, green energy transformation, and national defense restructuring. Global AI is developing rapidly. For example, the United States launched the AI “Genesis Mission” (Genesis Mission) to strengthen data center construction and significantly boost copper demand. For the first time, the mainland clearly proposed specific reduction targets for total greenhouse gas emissions. It is expected that power infrastructure and grid upgrades will support copper demand. On the European side, Germany will increase its fiscal budget and increase military spending, which will also boost demand. The International Energy Agency (IEA) predicts that according to current mining plans, existing and planned mine production capacity will only meet about 70% of the world's copper demand by 2035.
Prices of metal resources rose sharply, and profit growth in the first three quarters beat expectations
Zijin Mining established a five-year plan as early as 2024. The goal is that by 2028, mineral copper production will increase by more than 49% compared to 2023 to reach 1.5 to 1.6 million tons, and mineral gold production will increase by more than 47% to 100-110 tons. Through mergers and acquisitions, technical improvements and production expansion, and operational optimization, etc., the Group's mineral gold production increased by 20% to 65 tons and mineral copper production increased by 5% to 830,000 tons in the first three quarters of this year. Gold and copper prices rose repeatedly during the matching period, and we were able to enjoy the “sharp rise in volume and price” dividend. In the first three quarters, the Group's revenue increased 10% year-on-year to RMB 254.20 billion, and shareholders' earnings increased 55% to RMB 37.86 billion, beating market expectations. During the period, the Group's net cash flow from operating activities increased by 44% to RMB 52.11 billion. It can be seen that its hematopoietic capacity is strong.
If metal prices further reach new highs, the 2026 profit forecast will have room to rise
According to Bloomberg's comprehensive forecast, the Group's earnings per share in 2026 will increase by about 28% year-on-year to 2.475 yuan. The current price is equivalent to about 12 times the predicted price-earnings ratio in 2026. If the imbalance between supply and demand in the copper market worsens further, and total global demand for gold continues to rise, driving copper and gold prices to new highs, the Group's profit forecast for 2026 will have room to rise, which is beneficial to stock price performance.