Wanguo Gold Group (3939) H1 2024 earnings summary

Executive summary

• Revenue rose 59.7% year-over-year to RMB927.9 million for the six months ended 30 June 2024, driven by increased sales from Gold Ridge Mine.

• Net profit surged 84.6% to RMB331.2 million, with net profit margin improving to 35.7% from 30.9% year-over-year.

• Interim dividend of HK$0.12 per share (RMB10.95 cents), totaling RMB90.7 million, declared for the period.

• Gold Ridge Mine accounted for over 50% of revenue and gross profit, reflecting a strategic shift toward gold mining.

• Gross profit margin improved to 52.2%, up from 47.9% in the prior year period.

Financial highlights

• Gross profit increased 73.7% to RMB483.9 million; gross margin rose to 52.2% from 47.9% year-over-year.

• Cost of sales rose 46.7% to RMB444.0 million, mainly due to higher sales volume from Gold Ridge Mine.

• Earnings per share increased to RMB30.7 cents from RMB17.8 cents year-over-year.

• Net cash from operating activities was RMB209.9 million, up from RMB166.3 million year-over-year.

• Gearing ratio increased to 13.7% due to higher bank borrowings.

Outlook and guidance

• Gold prices expected to reach record highs in 2024, with average forecast at USD2,250/oz due to central bank buying and geopolitical tensions.

• Copper market remains bullish, with prices projected to reach USD12,000/tonne by early 2025.

• Gold mining and processing anticipated to be the major revenue and profit contributor going forward.

• Plans to upgrade Xinzhuang Mine capacity to 900,000 tpa and further to 1,000,000 tpa.

• Focus on expanding mineral resources through acquisitions.