In today’s briefing:
- Zijin Mining (2899 HK): This Is A Short
- Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Zijin Gold Pre-IPO: Superior to Peers; Should Trade at High End of Group
- Pre-IPO Zijin Gold (PHIP Updates) – Thoughts on the Business, the Forecast and Valuation Outlook
- Shengjing Bank (2066 HK): Minimum Acceptance Condition in Focus as Offer Opens
- Butong Group Pre-IPO: Strong Growth But Mainly Driven By Diapers And Wipes
- Zijin Gold IPO – The World’s Fastest-Growing Gold Producer, but at What Price?
- Busy Ming (鸣鸣很忙) Pre-IPO: A Visit to Store – See Young Customers and Busy Clerk
- CGN Mining (1164 HK) – THE NUCLEAR OPTION!
- Chifeng Jilong Gold (600988 CH) – Earnings Step-Change, Valuation Undemanding
Zijin Mining (2899 HK): This Is A Short
- In my June note, Zijin Mining Group (2899 HK) appeared fully valued; but I (thankfully) stopped short of being outright bearish. Its share price is up 48% since!
- A basket of peers is also up 37% since that note. Gold is up~8%, and 41% YTD. On the 14th September, Zijin released Zijin Gold’s PHIP. 1H25 numbers were solid.
- However, Zijin Gold’s earnings are by no stretch an outlier. Zijin’s Mining’s current share price is now baking in exceptional (unrealistic?) metrics for the gold play spin-off.
Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Chery Automobile Co. Ltd. (9973 HK)‘s IPO range is HK$27.75-HK$30.75/share and will raise up to HK$10bn (US$1.3m) if the oversubscription option is exercised, valuing the company at HK$169bn (US$21.7bn).
- The stock should be added to the HSCI Index in December and that will make the stock eligible for inclusion in Southbound Stock Connect.
- There will be no inclusion in global indexes for the next year, but there is a possibility of inclusion in the Hang Seng TECH Index (HSTECH INDEX) in December.
Zijin Gold Pre-IPO: Superior to Peers; Should Trade at High End of Group
- Zijin Gold (2579355D HK) is looking to raise up to US$3.0bn in its upcoming Hong Kong IPO.
- It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
- We have looked at the company’s past performance and done a peer comparison in our previous note. In this note, we will look at the firm’s valuation.
Pre-IPO Zijin Gold (PHIP Updates) – Thoughts on the Business, the Forecast and Valuation Outlook
- The spin-off of Zijin for an independent listing is equivalent to presenting a “pure gold business” to the market. Such “asset revaluation” can unlock the hidden value of gold business.
- For enterprises like Zijin in the upstream of gold industry chain, a sustained high and rising gold price is usually a significant positive factor. However, there are also potential risks.
- Zijin Gold has better growth potential than peers, so we think its valuation range could be P/E of 18-22x. If based on 2025 net profit forecast, valuation is US$36.9-45.1 billion.
Shengjing Bank (2066 HK): Minimum Acceptance Condition in Focus as Offer Opens
- On 12 September, Shenyang SASAC increased its Shengjing Bank Co Ltd H (2066 HK) offer by 21.2% from HK$1.32 to HK$1.60. The IFA opines it is fair and reasonable.
- The revised terms should ensure the support of key shareholders. However, the IFA analysis is flawed, and the revised offer is light.
- While the 21 October vote on the delisting proposal should pass, the satisfaction of the minimum acceptance condition (90% of independent H shares) poses a challenge.
Butong Group Pre-IPO: Strong Growth But Mainly Driven By Diapers And Wipes
- Butong Group (BUTONG HK) is looking to raise US$100m in its upcoming Hong Kong IPO.
- Butong has been able to achieve strong topline momentum of 57% CAGR from FY22 to FY24, whilst expanding its margins, and is on track to replicate that performance for FY25.
- In this note, we look at the company’s past performance.
Zijin Gold IPO – The World’s Fastest-Growing Gold Producer, but at What Price?
- Buy Case: ~20% CAGR growth to 2027E, SOE backing, and potential index inclusion make Zijin the fastest-growing gold producer globally.
- Sell Case: At $40bn, Zijin trades at major-level multiples with mid-tier reserve depth, raising questions on sustainability.
- Swing Factor: Gold price trajectory and flawless execution in Ghana, Laos, and Kazakhstan will determine if the IPO clears closer to the low or high end of the range.
Busy Ming (鸣鸣很忙) Pre-IPO: A Visit to Store – See Young Customers and Busy Clerk
- We visited a “Busy for You” store near a university in Shanghai.
- We believe Busy Ming can attract young customers because of low prices and small packages.
- However, we also believe the company does employ enough shop assistants.
CGN Mining (1164 HK) – THE NUCLEAR OPTION!
- Global uranium demand is escalating quickly as China doubles its nuclear power plants by 2030 and the U.S. increases its inventory for its energy independence and growing energy needs.
- CGN Mining (1164 HK) is China’s largest uranium trading company, with partnerships with the Kazakhstan government in some of the largest uranium mines in the world.
- CGN secured an off-take contract with China General Nuclear Power Group at prices that are 50% higher than previous contract. Approximately 60% of CGN’s revenue is from EU and U.S.
Chifeng Jilong Gold (600988 CH) – Earnings Step-Change, Valuation Undemanding
- H1 2025 delivered record profitability, with realized gold prices up 41% YoY to ~US$3,020/oz and production surging 77% to 6.75t, lifting margins to ~US$1,440/oz.
- Growth is anchored in the Sepon and Wassa ramp-ups, with optionality from the newly identified SND discovery (maiden reserve expected 2026, potential production from 2027–28).
- On 2026E, Chifeng trades at ~8× P/E and ~4.6× EV/EBITDA with >10% FCF yields, offering inexpensive exposure to earnings growth; risks remain around execution at overseas mines, cost pressures etc.
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