Goldman Sachs: Zijin Mining's third-quarter performance roughly meets expectations, and free cash flow generation improves.

Jinshi data news on October 21st, Goldman Sachs released a report, indicating that Zijin Mining (02899.HK) performed in line with the bank’s expectations in the third quarter, surpassing market expectations. Operating cash flow in the first three quarters rose by 40% year-on-year, and free cash flow rose by 9 times year-on-year. The net debt ratio dropped from 115% at the end of last year to 90% in the third quarter. The bank lowered its profit forecast for Zijin in the next two years by 2% to 5%, reflecting the downward revision of copper price forecasts and the expected production of the Kamoa copper mine in the Congo. Part of it is offset by the upward revision of the gold price forecast. The bank lowered its copper production forecast for Zijin in the next two years by 2%, reflecting the downward production guidance of the Kamoa copper mine due to unstable power supply, but still expects an annual 8% to 10% rise in copper production during the period. Zijin recently announced the acquisition of the Akyem gold mine, which may bring a 7% increase in gold production and a 2% increase in profits next year. The bank maintains a buy rating, with an unchanged H-share target price of HK$21.5 for Zijin, a minority metal miner benefiting from production and commodity price rises, with an expected annual net profit of 41.3 billion RMB in 2026, compared to 22.4 billion RMB last year, representing a compound annual rise rate of 23%. Maintain a buy rating, with an unchanged H-share target price of 21.5 Hong Kong dollars.