A profit alert announcement, rich in substance, once again reveals that GT GOLD (08299), a new force in Hong Kong-listed gold stocks, is consistently delivering on its high-growth expectations with strong momentum. On the evening of May 13, GT GOLD disclosed its profit alert. According to the announcement, for the year ended March 31, 2026, the company expects to achieve revenue of HK$2.005 billion, a sharp increase of 53% year-on-year. For the same period, net profit also surged by 53% year-on-year to HK$145 million; profit attributable to owners of the parent was approximately HK$95 million, representing a 43% increase on a comparable basis. On the surface alone, this is undoubtedly a quite impressive report card. However, in our view, if the market focuses solely on the numbers in the announcement, it may still underestimate the true "substance" behind this profit alert. We believe the earnings elasticity of GT GOLD's core business is far more robust than the surface figures suggest.
The key reason the market might significantly underestimate GT GOLD's growth potential lies in the composition of its profits in the previous fiscal year. Reviewing GT GOLD's annual report for the 2025 fiscal year, the company's profit attributable to owners of the parent was approximately HK$66.55 million. However, it is important to note that this included a substantial amount of other income. Excluding this non-recurring gain or loss, our calculations estimate that GT GOLD's profit attributable to owners of the parent from its core business—gold mining, processing, and smelting—for the last fiscal year was in the range of HK$35 million to HK$40 million. Using this as the base to recalculate the change in profit attributable to owners of the parent for the 2026 fiscal year, the corresponding growth rate for core business profit is no longer 43%, but easily surpasses 135%.
How has GT GOLD managed to achieve such leapfrog growth consecutively on a high base? Looking back at the company's series of actions in recent years, it is evident that GT GOLD has been vigorously tapping its internal growth potential while simultaneously pursuing external acquisitions to enhance its capabilities. Through this integrated combination of internal and external strategies, GT GOLD has delivered on its growth expectations with high quality. For a recent example, at the end of March this year, GT GOLD acquired a mature gold mine in Ningshan County, Shaanxi, for a total consideration of HK$585 million, representing a discount of approximately 35%. The acquisition cost per ounce was only about US$114, which means that in the current environment of high gold prices, this asset has an extremely substantial profit cushion. Prior to this, GT GOLD completed a placement financing of approximately HK$274 million in the second half of last year, undoubtedly providing essential ammunition for the company's external operations this year.
Looking back at GT GOLD's profit alert, it can naturally be described as "rich in substance" and also conveys a new, deeper signal: considering that the year-on-year growth in the profit scale of its core business is higher than what the profit alert announcement presents, it can be anticipated that the operational efficiency of GT GOLD's existing mines has significantly improved. The release of production capacity and the upward trend in gold prices have formed a positive synergy, jointly driving a substantial breakthrough in the company's profitability. Additionally, it is worth mentioning that the Ningshan gold mine acquired by GT GOLD is expected to resume production by July this year, and its contribution to the company's performance will further materialize in the next fiscal year.
Reading between the lines, GT GOLD's current earnings surge is merely the "first half." Subsequently, with the full-scale operation of newly acquired assets, GT GOLD is poised to unleash even stronger growth momentum.