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2026-07-10 17:41:21 BofAS published a report stating that ZIJIN GOLD INTL (02259.HK) issued a positive profit alert, expecting net profit for 1H26 to reach approximately USD1.4 billion, up 169% YoY, but representing only 44% and 38% of the bank's and market's full-year forecasts respectively, missing expectations. The bank estimated that 2Q26 net profit alone was USD593 million, up 67% YoY but down 27% QoQ. The bank believed the earnings miss was mainly due to higher-than-expected unit costs and slower-than-expected production ramp-up. Management said the weaker 1H26 performance was mainly affected by rising energy costs and one-off expenses at the RG mine; non-linear production increases caused by integration and expansion phases at multiple mines; and weather disruptions. In terms of production, gold output in 1H26 was 27 tonnes, equivalent to 46% of the full-year production guidance of 59 tonnes, while management remained confident in achieving the full-year guidance. The bank expected earnings in 2H26 to remain broadly flat HoH, as its gold price forecast was lowered to USD4,075 per ounce, down 13% HoH, which would be offset by higher production driven by continued commissioning at the Akyem and RG mines. To reflect the weaker-than-expected 1H26 results, BofAS lowered its 2026 and 2027 net profit forecasts by 6% to USD3 billion and USD3.2 billion respectively, mainly due to higher unit cost assumptions. Based on unchanged assumptions of an 8% weighted average cost of capital and a 2% terminal growth rate, the bank also cut its TP by 11% from HKD158 to HKD140. The bank reiterated its Buy rating, believing the company could benefit from visible production growth in 2026-2027, as well as the potential normalization of unit costs after newly acquired assets commence production and one-off expenses at the RG mine fade. (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |