On the evening of October 19, Zijin Gold Intl (ASX: 02259) delivered a performance report for the first three quarters that any mining company would find hard to fault: approximately 41 tonnes of mined gold, a sharp year-on-year increase of 28%; profit attributable to owners of the parent company reaching USD 2.015 billion, a substantial rise of 123% year-on-year; and net cash flow from operating activities of USD 2.778 billion, surging 157% year-on-year. This "volume and price rising together" performance not only highlights its growth foundation as a global gold leader but also solidifies its core competitiveness in the global mining sector.
However, this stellar performance did not translate into a share price increase. Over the past three trading days, Zijin Gold Intl's share price has seen a notable pullback: on October 20 it fell more than 7% at one point, and on October 22 it dropped another 4.65% to HKD 127. This was mainly due to disturbances in the external macroeconomic environment: international gold prices fell for three consecutive days, compounded by rising geopolitical tensions in the Middle East, global inflation risks, and interest rate hike expectations weighing on the entire gold sector. Short-term market sentiment fluctuations are essentially a normal manifestation of expectation rebalancing in cyclical sectors, rather than a weakening of the company's fundamentals.
Despite the short-term share price pullback, the company's long-term value logic remains unchanged. On one hand, although its all-in sustaining cost (AISC) rose 5% year-on-year to USD 1,649 per ounce, it still maintains a globally leading level in the industry, and the cost increase mainly stems from higher royalty payments due to rising gold prices. On the other hand, the company is actively advancing multiple technical upgrades and equipment improvements to pave the way for capacity release in the fourth quarter and 2027. As sentiment is gradually digested and an operational inflection point approaches, the dual logic of "earnings realization plus valuation recovery" is becoming increasingly clear.
Volume and Price Rising Together, Earnings Realization Underway
Looking back at the development trajectory of Zijin Gold Intl, 2025 was a major year for capital operations accelerating the expansion of its resource map, while 2026 is the critical year when previously acquired assets enter capacity release and earnings are concentratedly realized.
In 2025, the company continued to expand its presence in the global gold sector, with its resource map continuously growing. In April and October of that year, it completed the acquisitions of the Akyem gold mine and the Riguiduo gold mine respectively, and in July finalized the restructuring of the Porgera gold mine. According to Guotai Haitong Securities, as of the end of 2025, the company's proven and probable gold reserves totaled 917 tonnes, with 45.6 tonnes of gold equity resources added during the year.
Resource layout comes first, production realization follows. 2026 is the year when Zijin Gold Intl "turns its moves into momentum." In the first half of 2026, the synergy value of Zijin Gold Intl's previously acquired assets continued to be released. The Akyem and Riguiduo gold mines contributed 4.0 tonnes and 3.3 tonnes of mined gold respectively; the original flagship mines also maintained steady growth, with Buriticá, Rosebel, Aurora, and Zuoyue gold mines producing 4.2 tonnes, 3.8 tonnes, 2.2 tonnes, and 1.8 tonnes respectively, representing year-on-year increases of 8%, 15%, 10%, and 6%. Exploration efforts also gained momentum, with approximately 84,000 meters of geological exploration drilling completed in the first half of the year, adding approximately 34.7 tonnes of gold metal content, with considerable resource increments at Buriticá, Norton Gold Fields, the Rosebel RGM mining area, and the Riguiduo gold mine.
Relying on Zijin Mining's mature global mine operation system, Zijin Gold Intl has achieved a dual-driven model of external acquisitions and organic growth. Its mining assets are spread across Central Asia, Africa, Australia, and South America, diversifying operational risks from a single region. Its large-scale management capabilities continue to be refined, efficiently converting acquired mineral resources into stable gold production capacity.
With capacity ramp-up combined with rising gold prices, Zijin Gold Intl's growth logic of simultaneous volume and price increases has been clearly implemented. In the first half of 2026, the company achieved operating revenue of USD 3.99 billion, a sharp year-on-year increase of 100%; net profit attributable to the parent company was USD 1.45 billion, surging 179% year-on-year. Among this, gold business revenue was USD 3.90 billion, also achieving a 100% year-on-year increase, with the gold segment's gross margin rising to 58%, up 11.8 percentage points year-on-year.
At the production level, gold output in the first half of the year was 27.3 tonnes, up 44% year-on-year, with production progress completing 46% of the full-year target; gold sales volume was 26.1 tonnes, up 33% year-on-year. The company's average gold selling price was USD 4,643 per ounce, close to 99% of the Comex gold average price during the same period, allowing it to fully capture the earnings benefits brought by rising gold prices.
Behind the impressive revenue and profit, its earnings quality also remains at a high level. In the first half of the year, the company's comprehensive gross margin was 58%, net margin was 42%, and ROE reached 18%, with profitability at the upper tier of the industry. Management and control capabilities also continued to optimize, with the period expense ratio at only 4.0%, down 1.0 percentage point year-on-year; the debt-to-asset ratio was 26%, down 3 percentage points year-on-year, with risk resistance continuing to strengthen.
Cash flow, as the most intuitive touchstone for testing the quality of corporate operations, also performed well for Zijin Gold Intl. In the first half of the year, the company's net operating cash flow was USD 1.80 billion, surging 331% year-on-year; in the first three quarters, operating cash flow further rose to USD 2.778 billion, up 157% year-on-year. This continuous stream of cash flow lays a solid financial foundation for subsequent mine technical upgrades, exploration and reserve expansion, and resource acquisitions.
In addition, Zijin Gold Intl's cost management capabilities also remain in the top tier of the global gold industry, with an all-in sustaining cost (AISC) of USD 1,649 per ounce in the first three quarters. The slight cost increase is not due to declining mine operational efficiency, but rather reflects higher royalty payments calculated on a gold price basis as gold prices rise, compounded by disturbances from rising prices of certain raw and auxiliary materials — not a loosening of its moat.
Looking ahead to future operations, the company's capacity growth curve continues to point upward. In the third quarter, the company proactively advanced multiple mine technical upgrades, equipment repairs, slope treatment, and resource supplementary exploration projects, moderately adjusting production rhythm in the short term with the aim of solidifying the long-term capacity foundation and building momentum for production release in the fourth quarter and even 2027. Expansion projects at large mines such as Rosebel, Riguiduo, and Akyem are steadily advancing, the Norton Gold Fields low-grade heap leaching project has already been put into production, and the path for gold output growth over the coming years is gradually becoming clear.
Industry K-Shaped Divergence, Leaders Embrace Independent Trends
As is well known, gold is a typical strongly cyclical commodity, and market trends always have two phases: the first half bets on gold price benefits, while the second half competes on capacity and cost. In the first half of 2026, international gold prices continued to rise, and the gold sector enjoyed valuation premiums. Zijin Gold Intl, with its pure overseas gold mine assets and rapid capacity expansion, saw its share price stage a sharp rally in the first half of the year, fully realizing the earnings expectations brought by rising gold prices and front-loading阶段性 sentiment premiums.
Entering the second half of the year, gold prices entered a high-level oscillation range, and the market's trading logic shifted from "sentiment gaming" to "earnings pricing," with the sector as a whole entering a valuation digestion phase and the industry officially entering an era of K-shaped divergence. Small and medium-sized mines generally face resource depletion, high costs, and unstable production, with profit elasticity continuously shrinking; while leading mining companies with quality resources, large-scale capacity, and mature operating systems can continue to harvest structural dividends from the industry and ride through cyclical fluctuations.
It is worth noting that Zijin Gold Intl is precisely a core beneficiary of this round of industry divergence. The company's mines are spread across four major gold-producing regions — Central Asia, Africa, Australia, and South America — diversifying risks from a single region; backed by Zijin Mining's global construction and management system, it can significantly shorten the cycle from commissioning to full production at overseas mines; with abundant cash flow and a healthy financial structure, it can both continue investing in exploration and expansion and retain ample room to continue advancing quality gold mine acquisitions.
At a time when the industry as a whole is entering stock-based competition, the company has built a hard-to-replicate core barrier with "incremental capacity plus controllable costs plus abundant cash flow," walking an independent growth path decoupled from industry cycles.
At the valuation level, the market is completing a rational reconstruction from "sentiment premium" to "earnings anchoring." The earlier rally gave the company a valuation premium as a gold price option; as positive factors gradually materialize, capital returns to fundamental assessment, no longer granting thematic premiums but instead strictly examining capacity realization, cost control, and long-term growth certainty. Currently, the company's TTM price-to-earnings ratio is only 15.43 times, at the lower end among global gold industry leaders, with valuation bubbles fully cleared, leaving ample room for subsequent valuation recovery.
Institutions are also unanimously optimistic about the company's medium-to-long-term growth value. Pacific Securities estimates that the company's mined gold output is expected to steadily increase to 59.2 tonnes, 60.3 tonnes, and 74 tonnes from 2026 to 2028, with steady capacity expansion driving continuous earnings growth; Guotai Haitong initiated coverage with an "Overweight" rating, assigning the company a 20x PE based on reasonable industry valuation, corresponding to a target price of HKD 163.8, leaving considerable upside from the current price to the institutional target.
It can be seen that as short-term disturbances gradually fade, Zijin Gold Intl's capacity realization and valuation recovery will gradually form a resonance, with earnings growth underpinning valuation upside, and a Davis double-click scenario drawing ever closer.
Conclusion
True long-term investment is never about chasing short-term earnings pulses and share price fluctuations, but about anchoring to a company's core barriers that can withstand cycles. Backed by Zijin Mining's global resource integration capabilities, armed with quality mining assets across Central Asia, Africa, Australia, and South America, combined with a clear capacity expansion path, industry-leading cost advantages, and a healthy financial structure, Zijin Gold Intl already possesses the core strength of a world-class gold mining leader. The short-term valuation pullback is a normal risk clearing for a cyclical stock; sustained capacity growth is the core confidence for a company to ride through bull and bear markets. When market sentiment returns to rationality and long-term capacity increments gradually materialize, the valuation that was mistakenly killed by short-term sentiment will eventually usher in a moment of recovery.
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