Stock Commentary Date: 13/07/2018
Stock: ZHAOJIN MINING INDUSTRY CO.LTD (1818.HK)
Closing price: $6.10 (16/07/2018)
52 weeks range: $5.437 – 7.257
Shares outstanding: 1,049,215,000
Market Capitalization (H Shares): HK$ 6,410,703,650 (16/07/2018)
Target Price (12 months): Neutral
Summary :
Zhaojin mining industry Co. Ltd. (1818.HK) is one of the leading producers of gold bullions and gold related products in PRC. In the midst of various factors that impede the price of gold, such as trade conflicts between USA and the rest of the world, interest upward movement as well as economic slowdown in Asia region. Also, the gold price movement is negatively correlated with the USD movement and we witnessed an upward movement in the USD (contributed by the increase in rate as well as cessation of quantitative easing) and in turn, may affect the demand for gold. Nevertheless, the group aimed to consolidate its position as the number one gold producer in the region and continued to implement various means or measures that enhance its gold qualities while minimize the impact of mining on the environment.
Overview – 2017 :
As shown on the chart above, Gold had been trading within a range between USD1240/OZ to USD1365 /OZ throughout second half of 2017 and first half of 2018. The failure of the Gold price to make a breakthrough of such trading tunnel might be attributed by the USD movement. Against the backdrop was the US Trump administration initiated various trade conflicts with different countries as well as the normalization of the interest rate after years of quantitative easing. In a short term, the gold price might not be able to reverse such trend; on the other hand, it is possible that the gold price may resume the downtrend movement after US Federal Reserve held their third meeting in early August.
SWOT ANALYSIS:
Strength :
Weakness :
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Opportunities :
Threat :
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” I, Ni Kwok Kuen Alex, am a licensed person under the Securities and Futures Commission. Until the date this commentary was published, neither I and/or my affiliates are the beneficiary of the securities mentioned herein or are entitled to any financial interests in relation thereto. “