The Hong Kong gold sector is experiencing a powerful upward momentum, driven by record-high international gold prices and growing investor appetite for safe-haven assets. On July 2, 2025, Shandong Gold led the charge with a gain exceeding 8%, followed by Zijin Mining up over 4%, while Datang Gold and Tongguan Gold both climbed more than 3%. This rally reflects broader market confidence in gold equities amid sustained price strength and favorable industry dynamics.
With London spot gold surpassing $2,600 per ounce in early 2025—after a 25.83% surge in 2024—gold mining companies are reaping the benefits of improved margins and stronger earnings. Chinese miners, in particular, have leveraged strategic mergers, production optimization, and cost control to maximize returns during this bull cycle.
This article examines the key drivers behind the recent surge in four major Hong Kong-listed gold producers: Shandong Gold, Zijin Mining, Datang Gold, and Tongguan Gold—highlighting their growth strategies, financial performance, and potential risks.
Shandong Gold: Growth Through Strategic Acquisitions
Shandong Gold (01787.HK) delivered robust financial results in 2024, reporting revenue of RMB 82.518 billion—a 39.21% year-on-year increase—and net profit attributable to shareholders of RMB 2.952 billion, up 26.80%. The momentum continued into 2025, with the company forecasting first-quarter net profit between RMB 950 million and RMB 1.13 billion, representing growth of 35.74% to 61.45%.
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A major factor behind this performance has been Shandong Gold’s aggressive acquisition strategy. The purchase of Yintai Gold and Baotou Changtai Mining added 765 tonnes of gold resources, bringing its total proven reserves to 2,058.46 tonnes. These moves significantly enhance resource security and future production capacity.
Operationally, the company achieved a milestone at its Sanshandao Gold Mine, where the auxiliary shaft reached a depth of -1,750 meters—the deepest vertical shaft in Asia—enabling access to deeper ore bodies and supporting long-term output stability.
Despite these strengths, challenges remain. The company’s debt burden is notable, with a 2024 asset-liability ratio of 63.63%. While acquisitions boost reserves, they also strain short-term cash flow. Investors should monitor debt management and integration efficiency closely.
Zijin Mining: Global Expansion Cements Industry Leadership
Zijin Mining (02899.HK) remains the dominant player in China’s mining industry, reporting RMB 303.64 billion in revenue and RMB 32.051 billion in net profit for 2024. In Q1 2025 alone, it generated RMB 78.928 billion in revenue (up 5.55%) and RMB 10.167 billion in net profit—an impressive 62.39% increase year-over-year.
The company produced 72.94 tonnes of gold in 2024 (up 7.7%), with expectations to reach around 80 tonnes in 2025. Its global footprint continues to expand through strategic investments such as acquiring a 20% stake in Zhaojin Mining and securing the Arenas copper-gold project in Peru—adding approximately 188 tonnes of equity gold resources.
Zijin’s competitive edge lies in its low-cost operations and technological innovation. The company maintains an industry-leading gold ingot gross margin of 44.57% and an even higher gold concentrate margin of 68.09%, far surpassing sector averages.
However, its diversified portfolio—including significant copper and zinc assets—means earnings are exposed to multiple commodity cycles. While this diversification can stabilize income, it may also dilute focus on core gold operations during volatile markets.
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Datang Gold: High Beta Potential in a Rising Market
Datang Gold (08299.HK), a smaller-cap player with a market value of approximately HKD 1.428 billion, has shown strong price elasticity during the current gold rally. On July 2, 2025, its shares rose over 3%, contributing to a year-to-date gain exceeding 20%.
In 2024, the company reported revenue of RMB 723 million (up 36.97%) and net profit of RMB 76 million (up 3.81%). Its high gross margin of 59.87% underscores effective cost management and operational discipline across its small-scale mining operations.
Management emphasizes a strategy of lean operations and regional specialization to gradually improve competitiveness. However, with estimated gold reserves of only about 50 tonnes, scalability remains limited. As a result, Datang Gold is highly sensitive to gold price fluctuations—making it more suitable for short-term traders seeking leveraged exposure rather than long-term holders.
Tongguan Gold: Undervalued with Regional Focus
Tongguan Gold (00340.HK) reported solid top-line growth in 2024, with revenue reaching RMB 1.605 billion (up 46.24%) and net profit of RMB 210 million (up 3.94%). Its mines are primarily located in Tongguan County, Shaanxi Province, where it produced approximately 2.5 tonnes of gold—up 10% from the prior year.
One of the most compelling aspects of Tongguan Gold is its valuation. With a trailing P/E ratio of just 4.62x and a gross margin of 40.7%, it trades at a steep discount compared to peers. This makes it an attractive candidate for value-oriented investors seeking exposure to domestic gold production.
Nonetheless, the company faces structural constraints. Its total reserves are under 100 tonnes, limiting expansion potential. Additionally, geographic concentration increases vulnerability to local regulatory or environmental risks.
Frequently Asked Questions (FAQ)
Q: What is driving the recent surge in Hong Kong-listed gold stocks?
A: Rising global gold prices—spurred by inflation concerns, geopolitical uncertainty, and central bank buying—are boosting miner profitability. Companies like Shandong Gold and Zijin Mining are benefiting from higher margins and reserve growth through acquisitions.
Q: Which gold stock offers the best balance of growth and stability?
A: Zijin Mining stands out due to its diversified global portfolio, strong cash flow, and leadership position. Shandong Gold also shows promise but carries higher leverage risk.
Q: Is Datang Gold a good long-term investment?
A: While Datang Gold offers high price elasticity during bull markets, its limited reserves and small scale make it better suited for tactical or short-term positions rather than long-term holdings.
Q: Why is Tongguan Gold considered undervalued?
A: With a P/E ratio below 5x and healthy margins, Tongguan Gold trades at a significant discount to industry peers despite stable production growth—making it appealing to value investors.
Q: What risks do Chinese gold miners face?
A: Key risks include rising extraction costs, environmental regulations, geopolitical exposure (for overseas assets), and dependence on volatile gold prices. Debt levels and reserve replacement rates also require close monitoring.
Q: How important is M&A activity in the gold sector?
A: Mergers and acquisitions are critical for reserve replenishment and scale expansion. Shandong Gold’s acquisition of Yintai Gold and Zijin’s purchase of stakes in Zhaojin Mining highlight how strategic deals can reshape competitive positioning.
Final Outlook
The current rally in Hong Kong’s gold equities reflects strong fundamentals supported by elevated gold prices and improved corporate strategies. Shandong Gold, Zijin Mining, Datang Gold, and Tongguan Gold each offer distinct investment profiles—from large-cap stability to small-cap leverage and deep-value opportunities.
Looking ahead, success will depend on operational efficiency, financial prudence, and the ability to secure new resources amid tightening supply conditions. As the global macro environment remains uncertain, gold mining stocks may continue to attract investor interest—but careful stock selection is essential.
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