Gold Mining Stocks See Higher Earnings Continue Capacity Expansion and Acquisitions with Promising Prospects

Amid ongoing political instability in various parts of the world and a global shift towards de-dollarization by international capital, the spot price of gold in London repeatedly hit new highs during the first half of 2025. This favorable environment led to generally outstanding business development and financial performance for several Hong Kong-listed gold mining and related companies. It is believed that gold mining stocks still possess prospects for recurring positive performance in these turbulent times marked by complex US policies.

Several gold mining companies are listed in the Hong Kong market. Judging by fundamental factors such as their production-sales business structure and financial performance, the top recommendation is (I) Zijin Mining Group (02899), the most profitable among its peers. In H1 2025, its profit attributable to shareholders reached RMB 23.291 billion, a year-on-year increase of 54.66%, surpassing the 46.4% growth seen in the same period last year, demonstrating excellent performance. Mine-produced gold output reached 41 tonnes, up 16% year-on-year, making it the largest gold producer among Hong Kong-listed mining companies. Increased production of mine-produced copper (up 9%) and mine-produced silver (up 6%) drove total operating revenue to RMB 167.71 billion, an 11.15% year-on-year increase, significantly outperforming the largely flat revenue of the previous year.

Zijin Mining adheres to a "twin-engine" strategy of mineral resource exploration and acquisitions, achieving fruitful results in independent prospecting and exploration. Significant progress was made in explorations at its Serbia Magma Copper-Gold Mine, Australia Norton Gold Fields, Fujian Zijinshan Copper-Gold Mine, as well as supplementary explorations at the Rosebel Gold Mine in Suriname and the Buriticá Gold Mine in Colombia. The company successfully won a bid for a geological exploration project in a Saudi metallogenic belt, establishing a footprint in greenfield exploration in the Middle East. Domestically, the Northeast Ore Block of the Zijinshan Mining Area completed review and filing, accumulating discovered resources of 1.33133 million tonnes of copper and 90,000 tonnes of molybdenum, representing the largest porphyry copper-molybdenum deposit discovered in Fujian Province in nearly 20 years.

Next, (II) Shandong Gold Mining (01787) also delivered excellent performance. Its profit attributable to shareholders reached RMB 2.808 billion, surging 102% (1.02 times) year-on-year, double the 50.86% growth rate of the previous year. Its mine-produced gold output for the period reached 24.71 tonnes, accounting for 17.72% of the total mine-produced gold output from domestic mining enterprises, with overseas mines contributing 5.67 tonnes. According to data from the China Gold Association, Shandong Gold's Jiaojia Gold Mine, Sanshandao Gold Mine, and Xincheng Gold Mine have been consistently listed among the "Top 10 Gold Producing Mines in China" and "Top 10 Gold Mines for Economic Efficiency in China" for multiple years. The number of its mines with annual gold production exceeding 1 tonne was 12 in 2024 and is expected to increase to 13 in 2025.

Consequently, Shandong Gold's gold business revenue for the first six months of 2025 reached RMB 17.006 billion, an increase of 55.96%, achieving a doubling of profit. This was primarily driven by the international spot gold price, which reached a high of USD 3,500 per ounce and a low of USD 2,614 during the period, closing at USD 3,302 at the end of June, representing a 25.8% increase. Simultaneously, the Shanghai Gold Exchange's Au(T+D) contract rose to RMB 764.15 per gram, a 24.3% increase.

Another company worth watching is (III) Zhaojin Mining Industry (01818), whose profit attributable to shareholders was RMB 1.439 billion, a remarkable 160% (1.6 times) year-on-year increase. Key recent developments in its core mining business include: (1) Revenue from the gold mining segment reached RMB 6.163 billion, up 44.4% year-on-year, with segment profit surging 108% (1.08 times) to RMB 2.375 billion. Total gold production for the period was approximately 1.4288 tonnes (equivalent to 459,372 ounces), an increase of 8.42% year-on-year. This included (2) self-produced gold of 1.023 tonnes (equivalent to 329,000 ounces), up 13.77% year-on-year; and (3) gold smelting and processing of about 4.052 tonnes (equivalent to 130,000 ounces), down 3.08% year-on-year.

Furthermore, (IV) Lingbao Gold (03330) reported a net profit of RMB 664 million for H1 2025, soaring 335% (3.35 times) compared to the profit of RMB 152 million in the same period last year (which had grown by 8.57%). Within this: (1) Revenue from its mining operations segment in China surged 128% (1.28 times) to RMB 1.614 billion, with segment profit skyrocketing 255% (2.55 times) to RMB 949 million. This contrasts sharply with the same period in 2024, where these two figures fell by 40% and 48.5%, respectively. Notably, (2) Lingbao Gold's acquired mining assets also delivered strong results: revenue from its gold mining operations in the Kyrgyz Republic reportably reached RMB 190 million, a massive 165% (1.65 times) year-on-year increase (compared to only 4.5% growth in H1 2024), and segment profit surged 958% (9.58 times) to RMB 62.46 million. This follows a turnaround from a loss of RMB 115 million in the same period last year to a profit of RMB 5.9 million.

Regarding stock price performance in the first nine months of the year, (V) Tongguan Gold Group (00340), a smaller-cap company, stood out. It reported an H1 profit of HK$342 million, up 271% (2.71 times) year-on-year, following an even more dramatic increase of 560% (5.6 times) to HK$91.95 million in the same period last year. It is important to note that its ability to achieve consecutive periods of profit multiplication is partly due to its reporting currency being Hong Kong Dollars rather than Renminbi, and its relatively low base. While it benefits from the rising gold price like other mining stocks, investors should still pay close attention to the company's fundamental factors.

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