Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Zijin plans to IPO its overseas gold unit, targeting 85t output in 2025; timeline not yet disclosed.</li>
<li>SOTP values copper business at RMB 592 bn, gold at RMB 190–200 bn, lithium adds RMB 18–28 bn.</li>
<li>Stock trades ~15–20% below intrinsic value, offering ~25–26% upside even without IPO re-rating.</li>
</ul>


Zijin plans to IPO its overseas gold unit, targeting 85t output in 2025; timeline not yet disclosed.
SOTP values copper business at RMB 592 bn, gold at RMB 190–200 bn, lithium adds RMB 18–28 bn.
Stock trades ~15–20% below intrinsic value, offering ~25–26% upside even without IPO re-rating.


Zijin Mining (2899 HK): Fair Value Still 25% Higher Despite IPO Discount Risks

<ul>
<li>A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.</li>
<li>Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.</li>
<li>Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.</li>
</ul>


A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.


Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

Zijin Mining Group Co Ltd H / Equity Bottom-Up

<ul>
<li>Structural copper tightness, strong gold cash flows, and rising silver prices position Zijin for multi-year earnings growth and a valuation re-rating in 2026.</li>
<li>Leadership transition reduces founder dependence, strengthens governance credibility, and enables multiple expansion as Zijin aligns with global copper-scarcity peers.</li>
<li>Base valuation is HK$40–41; spot and peer convergence support HK$48–50, implying 35–40% upside with clear catalysts across copper expansions and gold stability.</li>
</ul>


Structural copper tightness, strong gold cash flows, and rising silver prices position Zijin for multi-year earnings growth and a valuation re-rating in 2026.
Leadership transition reduces founder dependence, strengthens governance credibility, and enables multiple expansion as Zijin aligns with global copper-scarcity peers.
Base valuation is HK$40–41; spot and peer convergence support HK$48–50, implying 35–40% upside with clear catalysts across copper expansions and gold stability.


2026 High Conviction Idea: Zijin Mining – Copper Scarcity Rerating to HK$48

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>This insight recommends a basket of Asian-listed base metal producers.</li>
<li>Base metals, especially Copper, have a high probability of moving much higher as the AI race continues</li>
<li>We prefer to invest in the materials needed for the  building out of AI infrastructure  </li>
</ul>


This insight recommends a basket of Asian-listed base metal producers.
Base metals, especially Copper, have a high probability of moving much higher as the AI race continues
We prefer to invest in the materials needed for the  building out of AI infrastructure  


2026 High Conviction Idea: Our Basket of Commodity Equities Will Outperform Broad Equity Indices # 2

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

<ul>
<li>Following two periods of profitability, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> will be added to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> at the close on 5 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> is also an add to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> in December, so this inclusion increases the flow and impact.</li>
<li>Estimated one-way turnover is 2.3% and the estimated round-trip trade is HK$9.2bn (US$1.2bn). Big capping outflows for <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> at the December rebalance.</li>
</ul>


Following two periods of profitability, Innovent Biologics Inc (1801 HK) will be added to the Hang Seng Index (HSI INDEX) at the close on 5 December.

Innovent Biologics Inc (1801 HK) is also an add to the Hang Seng China Enterprises Index (HSCEI INDEX) in December, so this inclusion increases the flow and impact.
Estimated one-way turnover is 2.3% and the estimated round-trip trade is HK$9.2bn (US$1.2bn). Big capping outflows for Alibaba (9988 HK) at the December rebalance.


Hang Seng Index (HSI) Rebalance: Innovent Biologics Turns a Profit, Gets Added

China

Zijin Mining Group Company Limited operates metal mineral resources exploration and mining businesses. The Company produces gold, copper, zinc, iron, and other base metals. Zijin Mining Group also conducts metal trade and investment businesses domestically and internationally.

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Zijin Mining Group (601899 CH)

Zijin Mining (2899 HK): Fair Value Still 25% Higher Despite IPO Discount Risks

Zijin plans IPO for overseas gold unit, aiming for 85t output by 2025; stock undervalued with potential for 25-26% upside.

Rahul Jain

Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

Potential Kakula disruption could impact Zijin's copper output and EBITDA, but ramp-ups at other sites and growth in lithium could partially...

Rahul Jain

2026 High Conviction Idea: Zijin Mining – Copper Scarcity Rerating to HK$48

Zijin poised for multi-year earnings growth and valuation re-rating in 2026 with strong copper, gold, and silver positioning, leadership...

Rahul Jain

2026 High Conviction Idea: Our Basket of Commodity Equities Will Outperform Broad Equity Indices # 2

As part of our basket of Commodity producers, we present a selection of base metals producers with a copper focus, which we believe will outperform...

Rikki Malik

Hang Seng Index (HSI) Rebalance: Innovent Biologics Turns a Profit, Gets Added

Innovent Bio is an add in Dec. Estimated one-way turnover is 2.3% and round-trip trade is HK$9.2bn. Innovent Bio has also been added to the HSCEI,...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Zijin Mining (2899 HK): Fair Value Still 25% Higher Despite IPO Discount Risks

​Zijin plans IPO for overseas gold unit, aiming for 85t output by 2025; stock undervalued with potential for 25-26% upside.

Rahul Jain

Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

​Potential Kakula disruption could impact Zijin's copper output and EBITDA, but ramp-ups at other sites and growth in lithium could partially...

Rahul Jain

2026 High Conviction Idea: Zijin Mining – Copper Scarcity Rerating to HK$48

​Zijin poised for multi-year earnings growth and valuation re-rating in 2026 with strong copper, gold, and silver positioning, leadership...

Rahul Jain

2026 High Conviction Idea: Our Basket of Commodity Equities Will Outperform Broad Equity Indices # 2

As part of our basket of Commodity producers, we present a selection of base metals producers with a copper focus, which we believe will outperform...

Rikki Malik

Hang Seng Index (HSI) Rebalance: Innovent Biologics Turns a Profit, Gets Added

Innovent Bio is an add in Dec. Estimated one-way turnover is 2.3% and round-trip trade is HK$9.2bn. Innovent Bio has also been added to the HSCEI,...

Brian Freitas

Zijin plans IPO for overseas gold unit, aiming for 85t output by 2025; stock undervalued with potential for 25-26% upside.

Potential Kakula disruption could impact Zijin's copper output and EBITDA, but ramp-ups at other sites and growth in lithium could partially...

Zijin poised for multi-year earnings growth and valuation re-rating in 2026 with strong copper, gold, and silver positioning, leadership...