The gold market in 2026 has carved out one of the most dramatic chapters in world financial history. Within just six months, gold completed a full transmission cycle driven by geopolitical premium surges, energy-driven inflation feedback, and monetary tightening expectations. London spot gold hit a record high of $5,595.44 per ounce in late January, only to reverse course following the outbreak of the US-Iran war, the closure of the Strait of Hormuz, and inflation rebounds fueled by rising oil prices. Under the macro backdrop of Warsh assuming the Fed chairmanship and financial markets pricing in rate hikes, gold prices subsequently drifted lower in search of a bottom, falling back to year-start levels by the end of June.

Extreme market conditions often serve as the ultimate litmus test for a company's fundamental quality. Zhaojin Mining (01818) recently released its interim results for the first half of 2026, demonstrating remarkable operational resilience during a period when gold price volatility hit historical peaks. The company reported revenue of RMB 9.022 billion and net profit of RMB 2.105 billion for the period, representing year-on-year increases of 29.4% and 18.5%, respectively, on a comparable basis.

Achieving high-quality growth in key financial metrics amid sharp gold price swings and a temporary decline in gold production is already commendable. Moreover, the long-term pricing logic for gold remains firmly intact, and with Zhaojin Mining possessing the largest single gold mine in China—the Haijin Gold Mine—now approaching its production launch, the company's exceptional resource endowment is poised to translate into tangible output and earnings growth in the near future.

Steady Overall Performance

During the first half of 2026, Zhaojin Mining's core gold mining business generated revenue of RMB 7.81 billion, growing 26.7% despite multiple headwinds, including gold price fluctuations and the temporary halt in capacity expansion at its producing mines following safety incidents. The profitability side also demonstrated notable strength. The company achieved gross profit of RMB 4.347 billion in the first half, up 42.5% year-on-year, with the corresponding gross margin improving to 48.2%, a 4.5-percentage-point increase from 43.7% in the same period last year. This significant margin improvement confirms that the upside benefits from higher gold prices have not been interrupted by short-term disruptions.

During the period, Zhaojin Mining produced a total of 12,526.34 kilograms of gold, comprising 7,997.08 kilograms of mined gold and 4,529.26 kilograms of smelted and processed gold. Against the backdrop of a temporary decline in gold production, the company proactively implemented a multi-pronged approach focused on stabilizing output and securing supply. For instance, Zhaojin Mining formulated a differentiated "one mine, one strategy" plan to revitalize existing capacity, restore production capabilities, and bridge output gaps.

Meanwhile, the company's "Double-H" strategy—balancing domestic and overseas operations equally—delivered tangible results this year, with overseas gold production surging 33.4% year-on-year in the first half. Take the Abuja Gold Mine, a key overseas project for Zhaojin Mining, as an example. By optimizing production operations, streamlining processes, and enhancing mining and beneficiation efficiency, the mine successfully achieved its goals of stable output and improved efficiency. Additionally, other core overseas projects, such as the Oderan Mining expansion, are progressing as planned and are expected to contribute incremental output in the future.

While overseas capacity is adding to production, Zhaojin Mining is also focusing on longer-term resource continuity and capacity reserves. In the first half, the company increased its investment in mineral resource exploration, steadily improving both the quality and scale of its resource reserves. Notably, drilling in the northern Dayinzhuang mining area discovered thick ore bodies, marking a major breakthrough in regional exploration. Exploration at target zones such as Jinwang Mining and Jinzhi Mining also yielded significant results. During the period, the company added 28.46 tonnes of new gold metal through exploration, further consolidating its medium-to-long-term resource base. On the external resource expansion front, Zhaojin Mining maintained a coordinated domestic-international resource layout strategy, completing the acquisition of the Zhaojin Baiyun peripheral exploration right domestically and successfully bidding for the Ningsunjia exploration right in Zhaoyuan City, Shandong Province, continuously strengthening its resource reserve capacity.

Long-Term Bull Trend and Strengthening Growth Momentum

Reviewing the gold price correction in the first half, it fundamentally stemmed from an energy supply shock triggered by geopolitical conflicts, which created temporary interest rate pressure on gold through the transmission chain of "rising oil prices, inflation rebound, and heightened rate hike expectations." This does not represent a fundamental reversal of gold's long-term pricing logic. Despite the temporary strengthening of sentiment-driven disruptions, gold's medium-to-long-term floor is primarily supported by structural factors such as US fiscal credit deterioration and global central bank purchases, which means gold prices lack the foundation for sustained declines.

Currently, the US federal deficit ratio remains elevated, debt interest payments have surpassed the trillion-dollar mark, term premiums are systematically rising, and the long-term weakening trend of dollar credit is intensifying. In this context, US Treasuries and gold can almost be viewed as substitute reserve assets. Declining attractiveness of US Treasuries implies that global central banks and pension funds will gradually increase their allocation to gold. This is already evident in the data: global central banks purchased a net 289 tonnes of gold in Q2 2026, a significant rebound from approximately 57 tonnes in Q1. The People's Bank of China has also increased its gold holdings for 21 consecutive months during the price correction, adding approximately 14.9 tonnes and 19.9 tonnes in June and July, respectively.

However, focusing solely on gold prices would miss the most compelling aspect of Zhaojin Mining. What truly differentiates the company from its peers is its sustained commitment to resource development and the accelerated realization of production capacity reserves. On one hand, as previously mentioned, the company achieved substantial resource additions in the first half, strengthening its resource base through both domestic and overseas channels. On the other hand, the company is accelerating work on the Haijin Gold Mine, a key project being developed to industry-leading standards, with new projects and infrastructure accelerating the timely commissioning of new production capacity.

The production shortfall caused by safety incidents in the first half should be viewed as a short-term disruption rather than a long-term drag for Zhaojin Mining. With production resumption following rectification, combined with the continued ramp-up of domestic and overseas capacity and the approaching production window for the Haijin Gold Mine, the company's output and earnings are positioned for a period of sustained, long-term growth.

Looking back at this latest set of results, Zhaojin Mining has validated the quality of its fundamentals with a steady and progressive performance, despite the dual pressures of severe gold price volatility and temporary production declines. Looking ahead, with gold's long-term upward trajectory remaining robust and the company's internal growth drivers continuing to accumulate, the future is likely to see a convergence of earnings elasticity and growth certainty. Within the broader gold super-cycle, Zhaojin Mining undoubtedly remains a core asset worthy of continued close tracking by investors.