Damo released a research report stating that it maintains Shandong Gold (01787)'s “in sync with the market” rating, with a target price of HK$20.2. In terms of the medium-term production outlook, the parent company Shandong Gold Group aims to produce 80 tons of gold within five years. Shandong Gold management expects listed companies to contribute and do their best to complete about 90% of production.
According to the Morgan Stanley report, against the backdrop of high gold prices, Shandong Gold continues to enjoy a strong profit trend. The company's output growth stemmed, first, from the further resumption of work at the Linglong Mine; the second was the final quarter operation of the Cardinal (Cardinal) project in Ghana; the third was the contribution brought by holding 28.89% of the shares affiliated with Yintai Gold (000975.SZ) (now known as Shanjin International).
According to the bank, Dongfeng Linglong Gold Mine, a subsidiary of Shandong Gold, resumed partial production in December last year, and the local government's safety license is expected to be obtained in the second half of this year. Facing the highest output in history of 3.8 tons, the Linglong Project is currently producing an annual operating capacity of 2 tons. The company's management expects that after the mine is fully resumed, the relevant production will reach 3 tons per year. The company also indicated that it was not notified of enhanced safety checks during the October National Day holiday.
