【英文】摩根士丹利报告：中国投资策略：中国黄金股票淘金热（52页）

After the 11.1%-80.7% YTD rally for A and H shares in Chinese gold  stocks, we see volume growth as the next leg to run as Chinese gold  miners have a strong desire to boost their gold production profiles.  Chinese gold majors, Zhaojin, Shandong Gold and Zijin, have strong  pipelines of new projects. In particular, Zhaojin is currently working  on a new mine, Haiyu, which is expected to boost its production from  M 20 tons p.a. currently to 35 tons upon completion. We estimate this  will imply 21% CAGR for 2019-2022e. We estimate Shandong Gold  and Zijin both have 12% CAGR for 2019-22e in gold production following our deep dive analysis of the Growth options from recent  acquisitions . We have built in the upside from these new projects in  to our bull case scenarios as acquisitions are still subject to regulator  approvals.

Year to date, Zhaojin has lagged peers and the gold price with just a  9% return. The underperformance was mainly due to the 1Q results  miss as volume disappointed on the back of Covid-19. Management  indicated operations have resumed since April and are on track to  meet its full year production target. Zhaojin has guided for an annual  gold production target of 606.8koz (down 4.5% YoY) of which  556.6koz is from self-mined gold, implying 11% growth for the higher  margin own gold volume. On a spot gold price of US$2000/oz, the  stock now trades at 16x 2021e PE, well below its historical average  of 28x. Our new target price implies 26% upside from the current  level.

Shandong Gold has been the best performer with a 79% rally year to  date (versus -11.5% for the Hang Seng Index). Shandong Gold is the  largest gold producer in China with 98% of its gross profit from gold.  Recent corporate action has also contributed to the stock outperformance, as the adjusted share price made it more appealing to retail  investors Exhibit 21 . Our new probability weighted price target of  HK$24.45 implies ~3% upside from the current level. Under our bull  case scenario for a US$2010/oz gold price in 2021e, Shandong Gold  shows significant upside of 37% from the current level. This is due to  its high earnings sensitivity as well as volume upside from new projects. We estimate every 1% move in the gold price leads to 3.3%  change in its 2021e net profit. On our NPV analysis, we estimate NPV  values of Rmb7.7bn for TMAC, assuming a 10% discount rate. This  should add HK$2.6, to Shandong Gold’s current share price.