FIRST SHANGHAI has issued a research report maintaining a "BUY" rating on ZIJIN MINING (02899), adjusting net profit forecasts for 2025-2027 to RMB48.5 billion/RMB54.1 billion/RMB59.7 billion respectively, and raising the target price to HK$37.61, corresponding to 20x PE for 2025. The firm remains highly optimistic about the company's full-year 2025 performance. Considering that major mines will continue stable and high production in the second half of the year, and metal prices are expected to remain elevated, second-half profitability is likely to stay strong. The company's valuation remains low compared to world-class mining enterprises, leaving room for valuation repair.
**Record Half-Year Performance** In the first half of 2025, the company achieved operating revenue of RMB167.7 billion, up 11.5% year-over-year, and net profit attributable to shareholders of RMB23.3 billion, up 54.4% year-over-year. Driven by both volume and price increases in core mineral products copper and gold, the company delivered its best half-year performance in history, fully demonstrating the company's profit elasticity to the high prosperity of metal prices.
**Precisely Capturing Cycles, Enjoying Commodity Bull Market Dividends** In the first half of 2025, the global macroeconomic environment provided strong support for non-ferrous metal prices. Benefiting from the significant rise in gold prices in the first half, the company's gold gross profit contribution exceeded the copper segment for the first time. The gross profit contribution ratios for the first half were: gold 38.6%, copper 38.5%, lead-zinc 2.1%, silver 2.1%, lithium carbonate 0.2%, and others 18.5%.
In terms of production, the company's mineral copper production reached 567,000 tons in the first half, up 9% year-over-year; mineral gold production was 41.2 tons, up 16% year-over-year; and mineral silver production was 223.6 tons, up 6% year-over-year. Second-quarter mineral copper production was 279,000 tons, up 9.1% year-over-year, while mineral gold production was 22.1 tons, up 18.9% year-over-year.
The company's comprehensive gross margin for the first half was 23.75%, up 4.60 percentage points year-over-year, with mineral products gross margin at 60.23%, up 2.93 percentage points year-over-year.
**Continuous Growth in Resource Reserves, Lithium Business Valuation Awaits Recovery** The company implements a globalization strategy, operating a portfolio of important mining investment projects in 17 overseas countries, covering copper, gold, lithium and other major minerals, with 47% of assets overseas. In the first half, the company's equity resource volume increased by 2.049 million tons of copper resources and 1.322 million tons of reserves compared to the beginning of the year; added 88.8 tons of gold resources and 34.5 tons of gold reserves; and increased lithium carbonate equivalent resources by 834,000 tons and reserves by 358,000 tons.
Additionally, the company's lithium resource reserves rank among the global top 10. Projects including Argentina's 3Q salt lake lithium mine and Tibet's Laguo Co salt lake are progressing orderly. With lithium carbonate prices recently stabilizing and rebounding, and the company's production costs being industry-leading, the lithium business value awaits future revaluation.
The company's diversified global asset layout effectively reduces the impact of geopolitical risks on company profits, while abundant resource reserves support the company's long-term development.