"Gold prices have remained at multi-year highs since the beginning of 2024, and the market remains bullish on the 2025 outlook amid heightened geopolitical tensions and aggressive central banks purchase," state Chew and Liu.
"CNMC stands to be a key beneficiary, selling gold at spot prices. We expect the average selling price to increase by at least 18% y-o-y to US$2,900," they add.
In addition, the analysts see CNMC as a leveraged play on rising gold prices, as it ramps up production capacity this year onwards. They estimate the company to generate $34 million per year in free cash flow over the next ten years, implying a free cash flow yield of 24%.
Assuming the dividend payout ratio is kept at at least 40%, this translates into a yield of 5.6%.
See also: OCBC trims Nanofilm's fair value to 66.5 cents on softening outlook
Their target price of 49 cents is based on 10.3x FY2025 earnings.
As at 9.04 am, CNMC Goldmine shares changed hands at 36 cents, up 2.9%.
