Global Materials | Industrials | Commodities

Rahul Jain

Thematic (Sector/Industry)

<ul>
<li>Lithium oversupply of ~20% persists despite recent mine headlines, keeping long-term price pressure intact.</li>
<li>CATL (300750 CH / 3750 HK) remains cushioned, with lower lithium prices enhancing its cost advantage.</li>
<li>Albemarle (ALB US) and other upstream miners face margin squeeze as oversupply caps near-term upside.</li>
</ul>


Lithium oversupply of ~20% persists despite recent mine headlines, keeping long-term price pressure intact.
CATL (300750 CH / 3750 HK) remains cushioned, with lower lithium prices enhancing its cost advantage.
Albemarle (ALB US) and other upstream miners face margin squeeze as oversupply caps near-term upside.


Lithium Oversupply Persists: CATL (300750 CH / 3750 HK) Cushioned, Albemarle (ALB US) Under Pressure

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Northern Star Resources / Index Rebalance

<ul>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.</li>
<li>The differences in the constituents between the two indices should result in 8 adds and 25 deletes. Estimated one-way turnover is 27.4% resulting in a round-trip trade of US$12.5bn.</li>
<li>The forecast adds have continued to underperform the forecast deletes as the big valuation gap that had opened up since the announcement of the benchmark switch narrows.</li>
</ul>


The VanEck Gold Miners ETF/USA (GDX US) will change benchmark from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index at the close on 19 September.
The differences in the constituents between the two indices should result in 8 adds and 25 deletes. Estimated one-way turnover is 27.4% resulting in a round-trip trade of US$12.5bn.
The forecast adds have continued to underperform the forecast deletes as the big valuation gap that had opened up since the announcement of the benchmark switch narrows.


Gold Miners ETF (GDX US): Further Capping Pushes Trade to Over US$12.5bn

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO proceeds.</li>
<li>Zijin Gold had sales of US$3.0 billion (up 32.2% YoY) in 2024. Net margin increased from 14.2% in 2023 to 20.8% in 2024. </li>
<li>There has been a sharp increase in the gap between gold AISC (all-in-sustaining cost) and gold price in the past year, leading to higher profit margins of gold producers globally. </li>
</ul>


Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO proceeds.
Zijin Gold had sales of US$3.0 billion (up 32.2% YoY) in 2024. Net margin increased from 14.2% in 2023 to 20.8% in 2024. 
There has been a sharp increase in the gap between gold AISC (all-in-sustaining cost) and gold price in the past year, leading to higher profit margins of gold producers globally. 


Equity Bottom-Up

<ul>
<li>Zijin Mining is spinning off its seven overseas gold mines into Zijin Gold International, creating a dedicated, pure-play gold producer and positioning it for a Hong Kong IPO.</li>
<li>The IPO proceeds will primarily fund mine upgrades and overseas M&amp;A, with a portion earmarked to reinforce the balance sheet and corporate flexibility.</li>
<li>With media reports suggesting a $3B+ IPO size and potential launch in September, coupled with gold rallying above $3,600/oz, investor appetite around the listing is notably heightened.</li>
</ul>


Zijin Mining is spinning off its seven overseas gold mines into Zijin Gold International, creating a dedicated, pure-play gold producer and positioning it for a Hong Kong IPO.
The IPO proceeds will primarily fund mine upgrades and overseas M&amp;A, with a portion earmarked to reinforce the balance sheet and corporate flexibility.
With media reports suggesting a $3B+ IPO size and potential launch in September, coupled with gold rallying above $3,600/oz, investor appetite around the listing is notably heightened.


Zijin Gold International – Creating a Global Pure-Play Gold Champion

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zijin-gold" target="_blank" data-smartkarma-citation="entities:45448:1" rel="noopener">Zijin Gold (2579355D HK)</a> is a global leading gold mining company and the overseas gold segment of <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24628:1" rel="noopener">Zijin Mining Group (601899 CH)</a>. It is seeking to raise US$3 billion.  </li>
<li>Zijin Gold hold interests in eight gold mines located in gold-rich regions across South America, Oceania, Central Asia and Africa.</li>
<li>The investment case is bullish due to a diversified mine portfolio, strong growth, an attractive margin profile, robust cash generation, and modest leverage.</li>
</ul>



Zijin Gold (2579355D HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It is seeking to raise US$3 billion.  
Zijin Gold hold interests in eight gold mines located in gold-rich regions across South America, Oceania, Central Asia and Africa.
The investment case is bullish due to a diversified mine portfolio, strong growth, an attractive margin profile, robust cash generation, and modest leverage.


China

Zijin Mining Group Co., Ltd., through its subsidiaries, explores, mines, produces, refines, and sells gold and other mineral resources in China.

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Zijin Mining Group Co Ltd H (2899 HK)

Lithium Oversupply Persists: CATL (300750 CH / 3750 HK) Cushioned, Albemarle (ALB US) Under Pressure

Nikkei Asia reports CATL’s Jianxiawo mine will restart sooner than expected, pushing lithium carbonate futures down 5.7% to ~70,100 yuan/ton (–22%...

Rahul Jain

Gold Miners ETF (GDX US): Further Capping Pushes Trade to Over US$12.5bn

The GDX benchmark change is expected to result in 27.4% turnover and a US$12.5bn trade. Multiple days of ADV need to be traded in a lot of stocks....

Brian Freitas

Zijin Gold IPO Preview

Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO...

Douglas Kim

Zijin Gold International – Creating a Global Pure-Play Gold Champion

Zijin Mining to spin off overseas gold mines into Zijin Gold International for Hong Kong IPO, with proceeds funding upgrades, M&A, and bolstering...

Rahul Jain

Zijin Gold IPO: The Investment Case

Zijin Gold, the overseas gold segment of Zijin Mining, is seeking to raise US$3 billion. In this note, I discuss the investment case.

Arun George

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Lithium Oversupply Persists: CATL (300750 CH / 3750 HK) Cushioned, Albemarle (ALB US) Under Pressure

Nikkei Asia reports CATL’s Jianxiawo mine will restart sooner than expected, pushing lithium carbonate futures down 5.7% to ~70,100 yuan/ton (–22%...

Rahul Jain

Gold Miners ETF (GDX US): Further Capping Pushes Trade to Over US$12.5bn

The GDX benchmark change is expected to result in 27.4% turnover and a US$12.5bn trade. Multiple days of ADV need to be traded in a lot of stocks....

Brian Freitas

Zijin Gold IPO Preview

Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO...

Douglas Kim

Zijin Gold International – Creating a Global Pure-Play Gold Champion

​Zijin Mining to spin off overseas gold mines into Zijin Gold International for Hong Kong IPO, with proceeds funding upgrades, M&A, and bolstering...

Rahul Jain

Zijin Gold IPO: The Investment Case

Zijin Gold, the overseas gold segment of Zijin Mining, is seeking to raise US$3 billion. In this note, I discuss the investment case.

Arun George

Zijin Mining to spin off overseas gold mines into Zijin Gold International for Hong Kong IPO, with proceeds funding upgrades, M&A, and bolstering...