Bulletin: Shandong Gold's Growth Prospects Shored Up By Gold Prices

HONG KONG (S&P Global Ratings) Sept. 2, 2020--S&P Global Ratings today said China-based Shandong Gold Group Co. Ltd. (SDG; BBB-/Stable/--) will likely continue its global expansion by capitalizing on its healthy operating cash flow (OCF). We expect strong earnings for SDG in 2020 and 2021 on robust gold prices and rising mined gold output. Mined gold output should be on track to meet the company's annual target and we estimate SDG's first-half adjusted EBITDA reached about 50% of our full-year forecast of approximately Chinese renminbi (RMB) 8.4 billion. We estimate the company's EBITDA to rise by 4%-6% in 2020 and 2021. This is based on a mid-single-digit increase in mined gold output, a moderate rise in production cost, and gold

...September 2, 2020 HONG KONG (S&P Global Ratings) Sept. 2, 2020--S&P Global Ratings today said China-based Shandong Gold Group Co. Ltd. (SDG; ###-/Stable/--) will likely continue its global expansion by capitalizing on its healthy operating cash flow (OCF). We expect strong earnings for SDG in 2020 and 2021 on robust gold prices and rising mined gold output. Mined gold output should be on track to meet the company's annual target and we estimate SDG's first-half adjusted EBITDA reached about 50% of our full-year forecast of approximately Chinese renminbi (RMB) 8.4 billion. We estimate the company's EBITDA to rise by 4%-6% in 2020 and 2021. This is based on a mid-single-digit increase in mined gold output, a moderate rise in production cost, and gold price assumption of US$1,650 per ounce for the rest of 2020 and US$1,400 per ounce for 2021. Our price assumptions are much lower than the current prices of above US$1,900, yet higher than 2018 and 2019 levels. SDG's earnings will be higher than...

Bulletin