(Original title: The global central bank’s gold purchases set a new record, A-share gold giants are approaching the daily limit, the main force has entered the market, and early jewelers’ shares are the most favored by the institutions)
Slowing inflation and interest rate hikes have given gold ample room to rise. In 2023, will the A-share gold sector benefit from the upward trend?
On January 9, Zijin Mining’s share price increased by 9.68%, the latest share price reached an eight-month high, and the A-share market value reached 235.6 billion yuan. It is understood that Zijin Mining is the largest listed gold ore company in China. In 2021, the company’s gold ore production will be 47.5 tons, and the total domestic gold mining production will be 258.09 tons in the same period. The company’s output accounts for 18.4% of total domestic output.
On the disc, many gold concept titles have risen sharply. Jinyi Culture was blocked by the daily limit in early trading, and Shengda assets, Dia, Jincheng Chengxin and other shares rose more than 6%.
According to the statistics of Securities Times·Databao, the total net inflow of major gold securities funds today is 890 million yuan. Zijin Mining ranked first with a net inflow of 629 million yuan, followed by Intime Gold, Western Mining and Jinyi Culture.
The international price of gold rebounded sharply
The institutions are optimistic about the trend in 2023
The international price of gold has maintained an upward trend after the New Year. As of now, the price of gold in London has hovered around $1,878 an ounce. Data shows that the price of London gold has soared for three consecutive months since it hit a low of $1,616.51 an ounce in November last year, up more than 16% over the period.
It is reported that in 2022 the global central bank’s gold purchases will reach the highest level in history and the Chinese central bank will restart gold purchases. According to data from the World Gold Council, in the first three quarters of 2022, global central bank gold purchases reached 673 tons, the highest level since records began in 1967. In 2022, against the backdrop of violent fluctuations in asset prices in the global financial market, central banks of various countries choose to increase their gold reserves to achieve the objectives of risk diversification, stabilization of volatility and fight against inflation.
According to data from the People’s Bank of China, at the end of December last year, the central bank’s gold reserves recorded 64.64 million ounces, an increase of 970,000 ounces from the previous month. This is the second consecutive month that central bank gold reserves increased.
Minsheng Securities said that the term spread continued to reverse, implying that the US recession is expected to gradually increase, the 10-year treasury bill interest rate and the benchmark interest rate diverged, and the effect of interest rate hikes on nominal interest rates gradually decreased. Rate hikes in December slowed down and the market is expecting interest rate hikes to halt in the first half of 2023 and one can expect a accommodative monetary policy. From a real interest rate perspective, nominal interest rates could peak in the first half of 2023, while inflation could repeat itself. As the Fed’s interest rate-cutting cycle begins, the gold price bull market will be officially established.
Galaxy Securities believes that as inflationary pressures in the US are eased by rising jobs and wages, but the risk of an economic downturn increases, the market expects the Fed to further slow the process of rate hikes and end the cycle of rate hikes in the first half of 2023, which is good for gold prices.
40% of the gold concept stock market earnings report is less than 20 times
According to Databao statistics, in just 5 trading days from January to now, the gold concept index rose by 4.46%, outperforming the Shanghai Composite Index by 1.65 percentage points over the same period. Six stocks including Yuancheng Gold, *ST Ronghua, Zijin Mining, Zhou Dasheng, Jinyi Culture and Huayu Mining rose more than 10%.
Judging by the valuation level, right now, 40% of the stocks have a moving price/earnings ratio of less than 20x. TBEA and Western Mining’s ongoing price-earnings ratios are all less than 10x. TBEA’s price-earnings ratio of 5.98 times is in the lowest position. The company expects to produce 1.5 tons of gold in 2022. In the first half of 2022, the company’s gold business income is 236 million yuan.
In terms of institutional attention, a total of 26 stocks received positive ratings from securities firm research reports. In comparison, jewelers are more favored by institutions. According to Databao statistics, Chow Tai Sang has received positive evaluations from 35 institutions. The company is one of the largest jewelry brand operators in China, and its main products include diamond-encrusted jewelry and plain gold jewelry (mainly gold jewelry). Other jewelers such as Dia, Chaohongji, Laofengxiang, Yuyuan and China Gold have all been appraised by more than 10 institutions. According to the unanimous forecast of more than 5 institutions, Shandong Gold, TBEA, Chifeng Gold, Jincheng Chengxin, Zijin Mining and China Molybdenum Co., Ltd. are expected to see their net profit growth rate exceed 40% in 2022.
The agency expects Shandong Gold to have the highest net profit growth rate, and the net profit growth rate is expected to reach 7.9 times last year. According to the 2022 semi-annual report, Shandong Gold’s Linglong Gold Mine, Jiaojia Gold Mine, Sanshandao Gold Mine and Xincheng Gold Mine successively achieved a cumulative gold production of more than 100 tons all over the country.
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