Damo: Shandong Gold (01787)'s third-quarter results fell short of expectations and maintained a “in sync with the market” rating

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Shandong Gold (01787)'s third-quarter results fell short of expectations, weakening investment arguments in the stock; the bank maintained a “in sync with the market” rating and a target price of HK$21.2.

According to the bank, the company's net profit for the first nine months of 2026 was RMB 3.2 billion, down 19.6% year on year; net loss for the third quarter was RMB 363 million, compared with profit of RMB 2.1 billion for the second quarter and RMB 1.1 billion for the third quarter of 2025. Third-quarter results were affected by a decrease in sales volume after a decline in production, a quarterly decline in gross profit greater than gold prices and production volume, and an increase in actual tax rates and the expansion of minority shareholders' equity distribution.

According to the bank, the company had earlier lowered its 2026 production target from 49 tons to 36 to 38 tons, which meant that the fourth quarter output was about 10 to 12 tons. In the first nine months, sales were 28.6 tons, and inventory digestion was 2.4 tons. Inventory digestion is expected to continue in the fourth quarter, which supports profits.