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Morgan cuts Zhaojin Mining (01818) to HK$8.02
Morgan Stanley cut its target price for Zhaojin Mining Industry (01818) to HK$8.02 from HK$8.2
and maintained its "overweight" rating.
  The research house raised its 2017-19 net profit forecasts for Zhaojin by 41%, 23% and 
15%, respectively, mainly on better-than-expected cost control achieved in 1H results.
  Despite lower volumes, Morgan said Zhaojin's gross margin improved by 59bp with its
better costs. It lowered SG&A cost forecast by 3% for this year, and incorporated 2017 new
gold price forecast of US$1,263/oz (versus US$1,245 previously). 
  Morgan said Zhaojin has a high correlation with the gold price at nearly 90%. It is a
pure gold play, with 89% of gross profit contribution from gold. 

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