Citi: Zijin Mining Group (02899) Q3 copper segment gross profit contribution surpasses gold; maintain "Buy" rating

Citi issued a research report stating that Zijin Mining Group's (02899) third-quarter net profit was slightly below the bank's expectations, but the copper segment's gross profit contribution has surpassed gold, and the bank maintains its "Buy" rating. The bank believes that with gold prices at around US$4,000 per ounce and the share price already at a low level, the short-term risk-reward is attractive. Zijin Mining Group's third-quarter net profit was RMB18.4 billion, up 26% year-on-year and down 4% quarter-on-quarter, slightly below the bank's expectations, mainly due to lower sales volumes and higher costs for gold, copper and lithium, as well as lower-than-expected share of profits from associates. The bank noted that net profit for the first three quarters was RMB57.5 billion, up 52% year-on-year, equivalent to 70% and 71% of the bank's full-year forecast and the market consensus, respectively; recurring net profit was RMB55.8 billion, up 64% year-on-year. Third-quarter gross profit was RMB32.5 billion, up 54% year-on-year and down 5% quarter-on-quarter, with the copper segment's gross profit contribution having surpassed gold.