CMC: Maintain "buy" rating on Zijin Mining with a target price of HK$55, industry outlook is appealing.

Morgan Stanley released a research report stating that Zijin Mining's net profit in the first quarter was 20.1 billion yuan, benefiting from rising metal prices and increased production. During the period, the gold production of the mine was 23.5 tons, up 23% year-on-year but down 4.5% quarter-on-quarter. It is worth noting that the unit production costs of gold and copper decreased by 5.8% and 3.4% respectively on a quarterly basis. The bank believes that cost savings may come from operational improvements, changes in sales mix, and the impact of a 2.3% depreciation of the US dollar against the Chinese renminbi in the first quarter of this year. The bank maintains a "hold" rating on Zijin Mining, with a target price of HK$55. The industry outlook is positive.