Shandong Gold Mining Co., Ltd. (Stock Code: 1787) recently announced its interim performance report for the six months ended June 30, 2024. The report shows that the company's revenue reached approximately RMB 45.773 billion, a year-on-year increase of 66.90%; the profit for the period was about RMB 2.132 billion, a year-on-year increase of 117.56%.

Financial Condition Analysis

Shandong Gold Mining Co., Ltd. (hereinafter referred to as "Shandong Gold") achieved significant financial growth in the first half of 2024. According to the latest disclosed financial report, the company's revenue increased from approximately RMB 27.425 billion in the same period of 2023 to approximately RMB 45.773 billion, an increase of 66.90%. This growth is mainly attributed to the rise in the sales prices of self-produced gold, purchased gold, and purchased compound gold, as well as the contribution from the acquisition of Shandong Gold International.

In terms of profit, Shandong Gold's profit for the period reached approximately RMB 2.132 billion, a year-on-year increase of 117.56%. Of this, the profit attributable to the owners of the company for the period was approximately RMB 1.357 billion, a year-on-year increase of 58.79%. The basic earnings per share increased from RMB 0.14 last year to RMB 0.26.

In terms of gross profit, the company's gross profit increased from approximately RMB 3.363 billion in the same period of 2023 to approximately RMB 5.666 billion, an increase of 68.47%. This was mainly due to the increase in gross profit from the self-produced gold business.

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Industry Characteristics and Core Financial Indicators Analysis

As a gold mining and refining company, Shandong Gold's core financial indicators include cost of sales, research and development expenses, financing costs, etc. During the reporting period, the company's cost of sales increased from approximately RMB 24.062 billion in the same period of 2023 to approximately RMB 40.108 billion, an increase of 66.69%. This increase is mainly due to the increase in the costs of self-produced gold, purchased gold, and purchased compound gold, as well as the acquisition of Shandong Gold International.

In terms of research and development expenses, the company invested approximately RMB 258 million in the first half of 2024, a year-on-year increase of 56.54%. This indicates the company's continued investment in technological innovation, aiming to improve production efficiency and technical levels.

Financing costs increased from approximately RMB 702 million in the same period of 2023 to approximately RMB 921 million, an increase of 31.16%. This is mainly due to the increase in the company's financing scale during the reporting period.

Industry Position and Horizontal ComparisonShandong Gold holds a leading position in China's gold industry. According to data from the China Gold Association, in the first half of 2024, the company's gold production reached 24.52 tons, accounting for 17.33% of the domestic mining enterprises' gold production. This data demonstrates the company's advantageous position in the domestic gold industry.

Compared with other gold production companies, Shandong Gold has significant advantages in resource reserves, technological innovation, and production scale. The company possesses abundant gold resource reserves and has comprehensively improved its level of scientific and technological innovation by continuously optimizing production organization, increasing resource exploration efforts, and actively engaging in mergers and acquisitions.

Historical Trends and Significant Changes

Looking at historical trends, Shandong Gold's revenue and profits have continued to grow over the past few years. This is mainly due to the company's continuous efforts in resource exploration, technological innovation, and market expansion. In particular, in recent years, the company has increased its investment in technological innovation and achieved significant results.

In terms of significant changes, in the first half of 2024, the company completed the acquisition of 70% of the equity of Baotou Changtai Mining and successfully acquired the exploration rights of Xiling Gold Mine. These merger and acquisition activities not only increased the company's resource reserves but also effectively extended the service life of the mines, providing strong support for the company's sustainable development.

Industry Situation and Future Outlook

During the reporting period, the global macroeconomic and political situation was complex. The inflation level in the United States gradually declined but remained higher than the Federal Reserve's policy target, and the market expected the Federal Reserve to begin cutting interest rates in the second half of 2024. The monetary policies of global central banks showed divergence, with some non-US economic central banks such as the European Central Bank taking the lead in cutting interest rates, raising market concerns that the global wave of interest rate cuts could again increase inflation risks. In addition, the ongoing stalemate in the Ukraine crisis, the still tense situation in the Middle East and between Israel and Palestine, and the turbulent election situations in many countries have made the global geopolitical landscape complex and changeable, increasing market demand for risk aversion.

Against this backdrop, gold prices have risen sharply and repeatedly hit historical highs. In the first half of 2024, the international spot gold price reached a maximum of $2,450 per ounce, a minimum of $1,984 per ounce, with the largest fluctuation of $466 per ounce, and closed at $2,326 per ounce, an increase of about 12.8% compared to the end of the previous year. The domestic RMB gold price trend was stronger than the international gold price trend. In the first half of 2024, the Shanghai Gold Exchange AU (T+D) contract reached a maximum of RMB 582 per gram, a minimum of RMB 476.03 per gram, and closed at RMB 549.58 per gram, an increase of about 14.5% compared to the end of the previous year.

Looking to the future, as inflation in the United States falls and the pressure on the U.S. economy from the high-interest-rate environment continues to grow, the expectation that the Federal Reserve will enter a monetary easing cycle may further strengthen. At the same time, the elections in the United States and Europe, and the turbulent situation in the Middle East and Russia-Ukraine will also bring greater uncertainty to the global geopolitical situation. The risk-aversion and investment functions of gold in the future are expected to be further enhanced, and the gold price is expected to continue the trend of high volatility in the second half of 2024.

ConclusionOverall, Shandong Gold Mining Co., Ltd. achieved significant financial growth in the first half of 2024 and made important progress in resource reserves, technological innovation, and market expansion. The company's leading position in China's gold industry has been further consolidated, and it is expected to continue to maintain steady growth in the future. With the changes in the global economic and political situation, the volatility of the gold market will continue to exist, but Shandong Gold, with its strong resources and technological advantages, is expected to maintain a leading position in future market competition.