While most capital this year has been betting on tech, the highest returns have come from the metals sector.

According to Wind data, from the start of 2025 to mid-November, the non-ferrous metals sector (Shenwan classification) has surged approximately 77%, ranking first among Shenwan's 31 primary industries.

In this rally, China Molybdenum Co., Ltd. (CMOC) has significantly outperformed the sector. Per Choice data, CMOC's H-shares have soared over 220% year-to-date, while its A-shares have risen around 160%.

The H-share outperformance is partly due to the Hang Seng Index's stronger gains compared to the Shanghai Composite Index this year. However, H-shares also exhibit sharper volatility—since early October 2025, CMOC's H-shares plunged 17% in just six trading days, while A-shares dropped only 8%.

This article delves into CMOC: How did it outpace its peers so dramatically? Is the recent pullback a peak or a healthy correction? And if the rally resumes, should investors favor CMOC's H-shares or A-shares?

**"Ugly Earnings" Yet a Market Leader?** At first glance, CMOC's quarterly revenue growth appears lackluster. In Q1, Q2, and Q3 of 2025, its year-on-year revenue growth declined by 0.25%, 13.99%, and 2.36%, respectively.

How can such weak earnings support such stellar stock performance?

The answer lies in CMOC's strategic shift: it scaled back low-margin mineral trading while expanding high-profit mining operations. Mineral trading and mining are CMOC's core businesses.

Mineral trading, which includes bulk commodities like copper, lead, zinc concentrates, and refined metals, became a revenue pillar after CMOC acquired global metal trader IXM in 2019. However, this segment’s gross margin was just 3.78% in H1 2025, contributing little to profits.

In contrast, mining—though smaller in revenue share—drove most profits. In H1 2025, CMOC's mining revenue rose 25.64% YoY to RMB 39.4 billion, with gross profit jumping 40.56% to RMB 20.66 billion. Meanwhile, mineral trading revenue fell 11.44% to RMB 82.3 billion, dragging down overall results.

In short, CMOC shed low-margin "bulk" while building high-margin "muscle." The market recognizes this, valuing its mining growth and future capacity.

**Why Outshining Peers?** CMOC's outperformance against peers like Zijin Mining, Jiangxi Copper, and Huayou Cobalt stems from two factors:

1. **Cobalt Leverage**: As a top global cobalt producer, CMOC benefited from cobalt prices soaring ~140% in 2025 (vs. LME copper’s <30% gain). 2. **Copper Cost Edge**: CMOC's copper mining gross margin hit 54.07% in Q1-Q3 2025, well above peers, thanks to countercyclical expansion during low-price periods.

**The Mastermind Behind CMOC** CMOC’s transformation traces back to its 2004 restructuring, when private conglomerate Hongshang Group invested RMB 178 million for a 49% stake, rescuing the debt-laden state-owned firm. By 2014, Hongshang became the controlling shareholder (36% stake), turning CMOC into a mixed-ownership enterprise.

Hongshang’s reclusive founder, Yu Yong (holding 99% of Hongshang), then spearheaded CMOC’s global expansion: - 2016–2017: Acquired Brazil’s niobium/phosphorus mines and Congo’s TFM copper-cobalt mine. - 2019–2021: Expanded TFM holdings and bought 95% of KFM copper-cobalt mine.

Today, CMOC owns 80% of TFM and 71.25% of KFM, both key copper-cobalt assets. This strategy paid off—CMOC’s shares rose 33.61% in 2024 and over 160% at their 2025 peak, boosting Yu Yong’s stake value to RMB 86 billion (24.93% of CMOC’s RMB 345 billion market cap as of October 2025).

**Copper’s Opportunities and Risks** While CMOC’s profits hinge on copper, cobalt, and molybdenum prices, copper remains the dominant driver. Copper pricing reflects: - **Financial Factors**: Dollar weakness and loose liquidity buoy prices. - **Commodity Fundamentals**: Supply-demand dynamics.

Currently, tight supply (2025 Q3 global copper output down 9.7% QoQ) and AI-driven power infrastructure demand support prices, offsetting weak traditional sectors like real estate. However, AI is merely an incremental demand source—traditional industries (construction, manufacturing) still dictate copper’s core trajectory.

Key monitors for copper’s outlook: 1. **U.S.-China Economic Recovery**: Joint upturns would amplify copper demand. 2. **Global PMI Trends**: Readings above 50 signal expansionary demand. 3. **Geopolitical/ Trade Tensions**: Easing could revive manufacturing cycles. 4. **Grid Investments**: AI’s power needs may accelerate copper-intensive grid builds. 5. **Fed Rate Cuts**: Earlier easing would boost cyclical assets like copper and H-shares.

If Fed cuts materialize, CMOC’s H-shares—with higher beta—could again lead the rally.