Lim & Tan Securities analyst Chan En Jie has increased his target price on CNMC Goldmine to 48 cents from 43 cents previously after the company’s FY2024 revenue and net profit stood at 104% and 98% of his full-year forecasts respectively.
On Feb 24, CNMC Goldmine announced earnings of US$9.8 million ($13.1 million) for the FY2024 ended Dec 31, 2024, 140.3% higher y-o-y.
The bottom line, which marked a nine-year high, was attributed to the soaring gold prices and operational efficiencies.
FY2024 revenue also increased by 25% y-o-y to US$65.2 million thanks to higher gold prices and increased sales of lead and zinc concentrates.
“CNMC Goldmine remains a prime beneficiary of rising gold prices amidst global uncertainties and increasing demand for the safe-haven asset,” Chan writes in his March 20 report.
The analyst, who has kept his “buy” call, made the same point in his initiation report in February, where he noted that CNMC is a “direct beneficiary of rising prices for the precious metal”.
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“We expect the company to ramp up production this year through expanding its carbon-in-leach (CIL) plant to increase processing capacity by 60%, and building its second underground gold mining facility to extract higher grade gold ores,” he adds. “Higher production will allow CNMC to capitalize on rising gold prices which is forecasted to remain strong in 2025.”
Chan’s new target price, which is due to valuations that were rolled forward to FY2025, is based on discounted cash flow (DCF) and pegged to a blend of 12.1 times its FY2025 P/E, which is CNMC’s peers’ average.
Shares in CNMC Goldmine closed flat at 33.5 cents on March 20.
