SD GOLD Drops Over 2.7% Following Approximately 9% Discounted Share Placement

The analyst rating for SD GOLD (01787.HK) is maintained at "Overweight" based on the company's strong financial performance in the third quarter of 2025, where it reported a revenue of RMB27.017 billion, representing a 27.25% year-over-year increase. Additionally, the net profit attributable to the parent company was RMB1.148 billion. For the first three quarters of 2025, the company achieved a total revenue of RMB83.783 billion and a net profit of RMB3.956 billion. The positive growth in net profit, particularly a 68.24% year-over-year increase, supports the favorable outlook and target prices assigned by Huatai Securities.

The analyst rating from the article is influenced by several factors: 1. Cost Pressures: The Chinese gold industry is facing cost pressures due to higher royalties, new mine transitional costs, accumulated ore inventories, and lower ore grading, which are driving cost increases. 2. Stronger Cost Control: ZIJIN MINING is noted for demonstrating stronger cost control capabilities compared to its peers, which is a positive factor for its rating. 3. Future Profit Potential: ZHAOJIN MINING's inventory accumulation is seen as a potential boost for future profits, especially as gold prices remain high. 4. Target Price Adjustments: The broker has cut the target price for ZHAOJIN MINING but kept the target prices for ZIJIN MINING and SD GOLD unchanged, indicating a more favorable outlook for these companies. 5. Gold Price Expectations: The expectation of high gold prices in the second half of 2025 and into the first half of 2026, despite anticipated volatility and potential price moderation in the second half of 2026, supports a positive outlook for gold producers. Overall, the combination of cost management, future profit potential, and favorable gold price expectations contributes to the analyst's rating.

The analyst rating from HSBC Global Research is primarily based on the expectation of rising gold prices, which are projected to reach new highs. The report indicates that for every 1% change in gold prices, the earnings of pure gold companies are expected to change by about 2%. Consequently, HSBC has raised target prices for gold miners, with a particularly bullish outlook on ZIJIN MINING and SD GOLD. Key reasons for the positive ratings include: 1. Record Gold Prices: Gold has reached new all-time highs, with predictions of further increases, potentially exceeding USD4,000 per ounce by the end of 2025. 2. Production Growth: ZIJIN MINING is expected to show the fastest production growth in the coming years. 3. Earnings Sensitivity: SD GOLD is noted for having the highest earnings sensitivity to gold prices, with a projected increase in earnings per share (EPS) corresponding to gold price increases. 4. Valuation Appeal: Both ZIJIN MINING and SD GOLD are considered attractive based on their valuations, with ZIJIN MINING benefiting from a copper-gold mix and SD GOLD being a pure gold play. Overall, the combination of anticipated gold price increases, production growth, and favorable valuations underpins the positive analyst ratings for these gold mining companies.

The analyst rating for ZIJIN MINING (02899.HK) is "Buy" with a target price increase from HK$37.7 to HK$41.8. The positive rating is likely influenced by the company's recent performance, as indicated by a share price increase of 0.980 (+2.859%) and a significant short selling ratio of 50.841%. Additionally, the related news about CMS initiating a "Strongly Recommend" rating on ZIJIN GOLD INTL suggests a favorable outlook for the gold mining sector, which may also contribute to the positive sentiment towards ZIJIN MINING.