SAC Capital analyst Matthias Chan has kept his “buy” call on CNMC Goldmine at a raised target price (TP) of 45 cents from 33 cents previously as the group’s FY2024 ended Dec 31, 2024 results met his expectations.
In the period, CNMC’s revenue and net profit grew 25% y-o-y and 104% y-o-y, respectively.
Chan writes in his Mar 13 report: “This was primarily driven by significantly higher base metal prices and improved production margin. FY2024 average realised gold price was US$2,455 ($3,276) per ounce versus FY2023’s US$1,960 per ounce.”
On CNMC’s Sokor gold project, Chan expects the RM9 million ($2.7 million) investment funded through internal resources to increase the group’s processing capacity by 60%, from the existing 500 tonnes per day to 800 tonnes per day.
He continues: “It is expected to be completed by 1HFY2025. We have conservatively assumed 60% of the increased capacity, only 20% is recognised in FY2025 and 40% in FY2026. A further 10 percentage points (ppts) increase will lift our FY2025 net profit forecast by close to 10%.”
The analyst also expects gold prices to stay elevated in the foreseeable future, attributing it to the continued imposition of tariffs by the US which exerts upward pressure on global inflation.
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“Typically, gold performs well in such a scenario. Additionally, ongoing geopolitical tensions—including conflicts in Europe and the Middle East, could further enhance gold’s appeal as a safe-haven asset,” writes Chan.
Overall, the analyst has lifted his FY2025 net profit forecast by 21% to US$12.75 million to reflect stronger sales and higher base metal prices. He adds that investors can also look forward to dividend yields of 5% to 8% over the next two years.
As at 2.20 pm, shares in CNMC Goldmine are trading 0.5 cents lower or 1.54% down at 32 cents.
