Guosen Securities has issued a research report reaffirming its "Outperform" rating on Zijin Gold International (02259) after the company delivered robust interim results for the first half of fiscal 2026. The brokerage highlighted the company's strong gold production growth and steady progress across multiple growth projects.

The company reported first-half revenue of $3.987 billion, up 99.7% year-over-year, while net profit attributable to shareholders surged 178.8% to $1.451 billion. Guosen Securities projects 2026-2028 revenue of $8.461 billion, $8.712 billion, and $9.475 billion respectively, with attributable net profit forecast at $3.118 billion, $3.251 billion, and $3.537 billion. Diluted earnings per share are expected to reach $1.16, $1.21, and $1.32 over the same period, corresponding to price-to-earnings ratios of 17.5x, 16.7x, and 15.4x based on the current share price.

Gold output surges with 46.1% of annual target achieved in H1

During the first half, the company produced approximately 27.3 tonnes of gold (including about 26.0 tonnes from controlled mines), representing a 43.7% increase year-over-year. With the full-year production plan set at approximately 59.2 tonnes, the first-half output accounted for 46.1% of the annual target, indicating an accelerated production pace is expected in the second half to meet the full-year goal.

All-in sustaining costs edge higher on royalties, but underlying costs decline

The company's all-in sustaining cost (AISC) reached $1,678 per ounce in the first half, up 7.0% year-over-year. The increase was primarily attributed to higher royalty payments linked to rising gold prices. Excluding this factor, per-ounce costs actually declined compared to the same period last year.

Interim dividend of HK$1.5 per share declared, payout ratio approximately 35.3%

The company has proposed an interim cash dividend of HK$1.5 per share, totaling approximately $512 million, which represents about 35.3% of first-half attributable net profit.

Key growth projects progressing steadily to support medium-to-long-term expansion

Several strategic initiatives are advancing according to plan: 1) At the Akyem Gold Mine in Ghana, expansion of the mining and processing system and tailings storage facility continues, targeting an increase in annual processing capacity from 8.5 million tonnes to approximately 13 million tonnes, with annual gold output expected to exceed 13 tonnes. 2) At the Rygold Gold Mine in Kazakhstan, construction of a new 10 million-tonne-per-annum mining and processing project is progressing, with overall capacity expected to reach 16 million tonnes annually, lifting gold output to approximately 11 tonnes per year. 3) At the Rosebel Gold Mine in Suriname, the Rosebel plant upgrade (increasing ore processing capacity from 8 million to approximately 18 million tonnes annually) and the new Saramacca processing system (adding 4 million tonnes of ore processing capacity) are both advancing. 4) At the Jilau/Taror Gold Mine in Tajikistan, a new 2 million-tonne-per-annum processing plant is being built to handle low-grade resources, targeting total annual capacity of approximately 6 million tonnes. 5) The company has terminated its planned acquisition of a 100% stake in United Gold and instead subscribed to 12.8 million newly issued ordinary shares, representing approximately 9.2% of the post-issuance share capital. United Gold's core assets include the producing Sadiola Gold Mine in Mali, a gold complex in Côte d'Ivoire (comprising the Bonikro and Agbaou mines), and the Kurmuk Gold Mine in Ethiopia, which is scheduled to commence production in the second half of 2026.

Overall, the company's multi-pronged approach effectively underpins its medium-to-long-term growth trajectory.

Key risks

Potential risks include mineral product selling prices falling short of expectations, project construction progress delays, and changes in mining resource policies in overseas jurisdictions.