The market may soon witness the emergence of a third “A+H” gold stock.

On February 19th, Chifeng Jilong Gold Mining Co., Ltd. announced its ongoing efforts to issue overseas listed shares (H shares) and seek listing on the main board of the Hong Kong Stock Exchange.

Regarding the process, Chifeng Gold has successfully passed the hearing of the Hong Kong Stock ExchangeFollowing this hearing, the company has published the requisite documentation on the Stock Exchange's website.

Should Chifeng Gold proceed with its Hong Kong listing, it would become the third company in the gold sector to adopt the dual listing method, joining Zijiang Mining and Shandong Gold.

Successfully passing the Hong Kong Stock Exchange hearing

On February 19th, the company informed its stakeholders about the advances in its plan to go public with H shares in Hong Kong.

Looking back at Chifeng Gold's journey towards the Hong Kong listing, the company first unveiled its plan in June 2024. By the end of August the same year, they submitted their listing application to the Hong Kong Stock Exchange, which subsequently was published on the exchange's website.

In December 2024, they received confirmation for their overseas issuance and listing, further advancing their steps toward the Hong Kong stock market.

On February 13th, the Hong Kong Stock Exchange conducted a hearing, reviewing Chifeng Gold’s application for the issuance and listing

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According to their timeline, the requested post-hearing documentation was duly published on the Exchange's website.

The announcement indicated that these post-hearing documents were prepared in accordance with the requirements set by the Hong Kong Stock Exchange and the Securities and Futures Commission, aiming to provide information to the public and qualified investors in Hong KongIt should be noted that this documentation is a draft version and is subject to updates and changes.

Chifeng Gold also cautioned that its issuance and listing still require approval from various regulatory bodies, which introduces an element of uncertainty into the process.

If Chifeng Gold achieves its goal of listing in Hong Kong, it will further solidify its status in the market alongside Zijiang Mining and Shandong Gold.

As of the market close on February 19th, Chifeng Gold's shares rose 0.82% to 19.72 yuan per share, giving it a market capitalization of 32.8 billion yuan.

Rising Revenue

According to its prospectus, Chifeng Gold is an international gold producer primarily engaged in the mining, selection, and sales of goldCurrently, the company owns and operates seven gold and polymetallic mines located in various regions, including China, Southeast Asia, and West Africa.

In terms of revenue contribution, Chifeng Gold's income from gold mining and sales constituted 78.5% in 2021, 84.6% in 2022, and increased further to 87.6% in 2023. In the first half of 2024, gold sales comprised 89.56% of the total revenue, generating an impressive 3.758 billion yuan.

In recent years, the price of gold has consistently reached new heights, significantly boosting Chifeng's financial performance

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Reports indicate that their revenues were 3.783 billion yuan in 2021, escalating to 6.267 billion in 2022, and further to 7.221 billion in 2023, with corresponding net profits of 583 million, 451 million, and 804 million yuan over the same periods respectively; the compound annual growth rate of gold production over three years stands at an impressive 33.1%.

Moreover, based on preliminary calculations by the financial department for 2024, Chifeng Gold anticipates a net profit attributable to shareholders of 1.7 to 1.8 billion yuan, signifying a notable annual increase of 115.19% to 123.9%. In terms of net profit after eliminating non-recurring gains and losses, expectations range from 1.67 to 1.74 billion yuan, reflecting a growth of 92.79% to 100.87%.

The company attributes the remarkable projected growth for 2024 to increased gold production and sales, a rise in sales prices, and ongoing cost control measures resulting in effectively managed production costs.

Analyst Wang Weimang from Zhonghui Futures explains that factors such as global "de-dollarization," the expansion of global debt, unexpected actions of US presidents, strategic withdrawal of the US, and internal chaos caused by US policies will provide long-term support for goldAlthough uncertainties abound in the future, the strategic value of gold remains significant, with prices likely to continue rising.

Research from Guosheng Securities indicates that in the medium to long term, gold will increasingly highlight its value as a safe haven in times of economic downturn, especially as global central banks continue to increase gold holdingsNon-speculative positions are expected to support gold prices, while the long-term outlook will benefit from the dual influences of potential Fed interest rate cuts and inflation premiums

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