HK Stock Connect Watch | TONGGUAN GOLD (00340.HK) Down Over 25% Since Stock Connect Inclusion; H1 Revenue and Net Profit Both Up 53%

On October 15, 2026, TONGGUAN GOLD traded lower, quoted at HKD 2.435 as of 13:03, down 2.21% on the day, with turnover of about HKD 18.74 million and total market capitalisation of about HKD 12.91 billion at the latest price. The stock touched an intraday high of HKD 2.495 and a low of HKD 2.405, with an amplitude of 3.61%.

Looking at recent trends, TONGGUAN GOLD's share price moved in a wide range over the past week (October 9 to 15, including today's intraday price). Over the past five trading days, the share price rose about 1.88% cumulatively from the October 8 close of HKD 2.390, with market capitalisation rising from about HKD 12.67 billion to HKD 12.91 billion, an increase of about HKD 240 million; during the period, the stock rose 9.21% on October 9 and fell 5.36% on October 12.

It is understood that on September 7, 2026, a new round of regular Stock Connect adjustment took effect. The number of Hang Seng Composite Index constituents rose from 534 to 580, and TONGGUAN GOLD (00340.HK) was included and accordingly admitted to Stock Connect. The Shanghai and Shenzhen stock exchanges released the adjusted Stock Connect eligible securities lists on September 4 and September 7 respectively.

Public information shows that TONGGUAN GOLD listed on the Main Board of HKEX on March 26, 1997 at an offer price of HKD 1.05. The company was not originally a gold miner; it was renamed China Mining Resources Group Limited in February 2007, began transforming into gold mining through a series of acquisitions from 2017, and its stock short name was changed to TONGGUAN GOLD from June 11, 2018 following the company's renaming. In July 2023, the company completed the acquisition of 100% equity in North East Mining, extending its business from Tongguan, Shaanxi Province to Subei, Gansu Province. It has about 5.303 billion issued shares as at October 2026.

At present, the share price peaked at HKD 4.066 intraday over the past 52 weeks (March 2, 2026), and the close on that day valued the company at HKD 20.78 billion, which had fallen to about HKD 12.91 billion as at October 15, a drawdown of about 40.1% from the 52-week high. Since being admitted to Stock Connect on September 7, 2026, the share price has fallen 25.8%; on the effective date itself, the stock closed at HKD 3.280, down 7.61% on the day, with turnover of HKD 245 million, more than double the previous trading day's HKD 99.18 million.

It is understood that Hang Seng Indexes Company announced on August 21, 2026 the semi-annual review results as at June 30, 2026, under which TONGGUAN GOLD was included in the Hang Seng Composite Index, with constituent changes effective from September 7, 2026. The company issued a voluntary announcement on its inclusion on August 24.

TONGGUAN GOLD's basis for inclusion lies first in its inclusion in the Hang Seng Composite Index, which gives it the index identity of a Stock Connect eligible security. Second, the company's market capitalisation around the June 30, 2026 review cut-off remained within the market capitalisation coverage range for inclusion in the Hang Seng Composite Index. In addition, the company had previously been included in the MSCI Global Small Cap Index (August 2025) and the FTSE Global Equity Index Series (March 2026); this inclusion in the Hang Seng Composite Index marks its third inclusion in a major global index within two years, and the gold and precious metals sector it belongs to is in an upcycle, consistent with the direction of this round of increased attention on resource stocks.

(The above is an inference based on public rules and data, not an official determination by the exchanges. The specific reasons for inclusion are subject to the exchange announcements.)

Although TONGGUAN GOLD's admission to Stock Connect provides institutional conditions for broadening the company's channels for southbound capital participation and improving liquidity, the share price performance since inclusion has diverged from the strength in gold prices, with the stock declining rather than rising since admission.

Public information shows that TONGGUAN GOLD is mainly engaged in gold exploration, mining, processing and sales, selling mined gold including gold concentrate, gold ingots and related products, and also operates a small gold recycling business; gold mining contributed 99.79% of total revenue in the first half of 2026. The company has two core gold mining bases in Tongguan, Shaanxi Province and Subei, Gansu Province, with Xiangshun Mining as the main producing asset in the Tongguan area and Tongxin, Dexing and Tongjin Mining providing support for future output growth; as at the end of 2025, the company held 77.6 tonnes of gold metal at an average grade of 6.45 grams per tonne.

Financially, the company's revenue growth has accelerated markedly: revenue in 2023 to 2025 was HKD 1.497 billion, HKD 1.605 billion and HKD 2.396 billion respectively, and net profit attributable to shareholders was HKD 51.45 million, HKD 211.1 million and HKD 830.4 million respectively. In the first half of 2026, revenue was HKD 1.575 billion, up 53% year on year, and net profit attributable to shareholders was HKD 522.7 million, up 53% year on year. The average selling price of mined gold rose from about RMB 666 per gram in the year-ago period to RMB 965, with sales volume of 1.43 tonnes; selling costs rose only 17%, and the gross margin of the gold mining business widened from 51.5% to 62.9%. During the period, the company recorded a one-off tax expense of about HKD 95 million, as a Subei mining subsidiary's 2025 high and new technology enterprise tax preferential status had not been finally confirmed by the competent authority and tax had to be paid at the 25% rate. As at the end of June, the company held cash and cash equivalents of HKD 760.1 million, with a debt-to-asset ratio of 33.95%.

On product and business developments, TONGGUAN GOLD continued to advance capacity and resource reserve work during the year: at the interim results briefing on August 25, the company gave 2026 gold production guidance of 3.3 to 3.7 tonnes and 2027 guidance of 3.8 to 4.4 tonnes; the intelligent ore-dressing system at the North East mining area was rolled out in the first half, lifting processing capacity by about 5%; and Tongxin Mining's exploration right was successfully converted into a mining right in the first half, while exploration-to-mining right conversion at Dexing Mining is under way.

The gold industry is in an upcycle driven jointly by central bank gold buying and safe-haven demand. According to the World Gold Council, global gold demand was worth about USD 380 billion in the first half of 2026, a record high; central banks net-purchased 289 tonnes in the second quarter, up 62% year on year and a record for any second quarter; the LBMA quarterly average gold price in the second quarter was USD 4,506 per ounce, 37% higher than a year earlier. In China, demand for gold bars and coins surged 31% year on year to 314 tonnes in the first half, the strongest half-year on record; as at the end of June, the People's Bank of China had increased its gold holdings for 20 consecutive months, adding 40 tonnes in the first half.

KAIYUAN SECURITIES noted in a research report that TONGGUAN GOLD focuses on gold exploration, mining and recycling, holds two core gold mining bases in Tongguan, Shaanxi Province and Subei, Gansu Province, enjoys excellent resource endowment, and with exploration-to-mining right conversion continuing to advance, its gold production and sales volume are expected to keep growing.