ZHAOJIN MINING (01818), a top performer in the gold sector, has demonstrated its strength to the market by achieving record-breaking results, including a doubling of shareholder net profit and a projected 180% surge in market capitalization for 2025. According to reports, on March 22, ZHAOJIN MINING released its 2025 annual results, revealing revenue of RMB 180.56 billion, a year-on-year increase of 56.32%. Gross profit reached RMB 75.7 billion, up 67.4%, while shareholder net profit soared to RMB 36.14 billion, marking a significant rise of 149.1%. The company's gross profit margin and net profit margin stood at 41.9% and 20%, respectively. Basic earnings per share for 2025 were RMB 0.96, a substantial increase of 173.56% compared to the previous year. The board has proposed a cash dividend of RMB 0.1 per share.
The year 2025 saw gold stand out as a unique asset class. Increased global economic uncertainty, driven by factors such as escalating geopolitical conflicts and trade tariff disputes, triggered safe-haven investment flows into precious metals. Concurrently, persistent gold purchases by central banks worldwide created a multifaceted environment where strong investment demand propelled gold prices steadily upward. Both London gold and New York gold prices recorded gains of approximately 64%. ZHAOJIN MINING capitalized on these favorable conditions by enhancing production efficiency on the supply side and steadily unlocking demand, supported by its major clients, resulting in simultaneous growth in both revenue and profit.
Benefiting from the rising gold price and strong earnings growth expectations, ZHAOJIN MINING's market value showed sustained strength throughout 2025, with an increase exceeding 180%. The stock has risen for four consecutive years from 2022 to 2025, achieving a cumulative gain of 372.3%. As conflicts, such as those involving the US and Iran, exacerbate global economic instability in 2026, gold is still expected to maintain an upward trajectory. The question remains: can the company's bullish run continue?
The company's sustained high growth and significantly enhanced profitability are key factors. In 2025, ZHAOJIN MINING achieved comprehensive growth across all performance metrics, primarily driven by a simultaneous increase in both volume and price within its gold mining operations. The company's total gold output for the year reached 27,225.68 kilograms, with mineral gold production at 19,791.85 kilograms, both showing stable growth. With gold prices rising over 60%, the gold mining business grew by 47.14% and constituted more than 87% of total revenue.
Amid this scale expansion, the company's profitability improved markedly. The gross profit margin for 2025 was 41.93%, an increase of 2.78 percentage points year-on-year. Operating leverage led to significant optimization of various expense ratios. The period expense ratio was 12.23%, a decrease of 5.67 percentage points. Notably, the core administrative expense ratio fell by 3.66 percentage points to 9.1%, and the financial expense ratio decreased by 1.94 percentage points to 2.78%.
Over recent years, the consistent upward trend in gold prices has fueled continuous high growth in the company's gold mining business. From 2023 to 2025, revenue grew from RMB 84.24 billion to RMB 180.56 billion, representing a compound annual growth rate of 46.4%. With gross margins and various expense ratios on an optimizing trend, shareholder net profit increased from RMB 6.86 billion to RMB 36.14 billion, a compound annual growth rate of 129.5%. The shareholder net profit margin rose from 8.14% to 20.02%, an improvement of 11.88 percentage points.
It is important to note two variables in ZHAOJIN MINING's 2025 financial report. First, other income and gains amounted to RMB 22.76 billion, a substantial increase of 291%, primarily attributable to fair value change gains of RMB 14.55 billion, which surged 26.5 times year-on-year. This increase is likely mainly due to changes in the market value of the company's holdings in listed securities. Second, other expenses were RMB 20.22 billion, up 152.88%, partially offsetting the other income. However, as this item was largely influenced by asset impairment losses (accounting for 78.8% of the total), it did not represent a cash outflow. Excluding this impairment, shareholder net profit would have been approximately RMB 52 billion.
Furthermore, in 2025, the company actively managed its liabilities, redeeming and repaying interest-bearing debt. Current corporate bonds decreased by RMB 999 million, and non-current interest-bearing bank borrowings decreased by RMB 1.298 billion, resulting in a combined reduction of RMB 2.297 billion. Supported by sustained high earnings growth and prudent planning of equity leverage, ZHAOJIN MINING's return on equity continued to climb, reaching 12.42% in 2025, an increase of 9.34 percentage points from 2023.
The company's performance in 2026 is still expected to show strong growth, driven primarily by two dimensions: accelerated production expansion leading to higher volumes and prices, and dual growth drivers from both domestic and overseas markets.
ZHAOJIN MINING is based in Shandong province, which hosts the largest number of super-large and large-scale gold deposits in China, providing substantial gold resource reserves. In recent years, the company has pursued a dual strategy of internal exploration to increase reserves and external acquisitions for expansion. It has continuously increased exploration investment to achieve rapid resource reserve growth while optimizing its domestic and international footprint. Domestically, starting from the west, it has established three major bases outside its home region, gradually forming a nationwide resource layout.
In 2025, the company's efforts to expand capacity and increase reserves yielded significant results. These included the efficient tunneling of the underground TBM at Ruihai Mining, the successful water-included trial operation of the mineral processing system, initial industrial production capacity attainment, and the obtaining of a production safety license by Jintingling Mining, marking its transition from construction to production phase. According to a JORC report, the company added 71.33 tonnes of new gold resources through exploration in 2025, bringing total gold resources to 1,504.68 tonnes and recoverable reserves to 521.24 tonnes. This places the company second only to Zijin Mining and Shandong Gold among domestic peers in terms of resource scale.
Notably, the company's Haiyu Gold Mine project, the largest single gold mine in China, is steadily commencing production, representing a key variable for capacity enhancement. In 2025, the company achieved a new breakthrough in deep-sea prospecting using advanced technology. Ruihai Mining successfully achieved precise positioning of concealed ore bodies at depths shallower than 3,000 meters below the seabed. Operating under complex marine conditions presents greater challenges compared to land-based exploration and mining, providing the company with a differentiated advantage and injecting strong momentum into its dual-track high-quality development strategy encompassing both land and sea.
The expectation of volume and price increases through "accelerated production expansion" in 2026 appears highly certain. The company's production capacity continues to expand, while gold prices are supported by strong long-term expectations due to geopolitical conflicts, inflation, and central bank investment demand. Furthermore, long-term cooperation with its top five major clients provides demand security.
The overseas market opens up additional growth space for ZHAOJIN MINING. Since 2018, the company's "Dual H" strategy has been gradually implemented, involving acquisitions such as stakes in Ecuador's Gold King Mining, Australia's Tietto Minerals, and Westgold Resources, as well as gaining control of the Abujar Gold Project in Côte d'Ivoire, West Africa, and the Komahun Gold Mine in Sierra Leone. This has built a growth pattern characterized by "core domestic support and multi-point overseas breakthroughs." In 2025, revenue from domestic and overseas markets was RMB 155.71 billion and RMB 24.84 billion, respectively, representing year-on-year growth of 53.2% and 78.83%, and accounting for 86.24% and 13.76% of total revenue.
ZHAOJIN MINING's overseas revenue growth is impressive, and its overseas gold production capacity is steadily increasing, positioning it to potentially capture further market share in 2026. The company disclosed in its financial report that it will continue to deepen its global layout, pursue acquisitions to broaden its reserve base, accelerate the merger and integration process focusing on key metallogenic belts and high-quality, potential mining rights projects both domestically and internationally, carefully select quality targets, strictly control investment risks, and consistently build up its gold resource reserves.
The company has also garnered positive outlooks from major investment banks. Macquarie, in a research report, noted that ZHAOJIN MINING continues to expand its gold mine portfolio through organic growth via exploration. The bank raised its net profit forecasts for 2025, 2026, and 2027 by 10%, 74%, and 50% to RMB 3.617 billion, RMB 4.991 billion, and RMB 4.293 billion, respectively, with the 2025 figure largely meeting expectations. Macquarie set a target price of HK$42, implying a potential upside of over 60% from the current price.
In summary, ZHAOJIN MINING has delivered outstanding performance, maintaining a high growth trajectory whether viewed solely for 2025 or over the past three years. Its continuously improving profitability places it at a leading level within the industry, forming the core logic behind its sustained valuation increase. For 2026, driven by the expectations of "volume and price increases" and the dual engines of domestic and international markets, continued high earnings growth appears certain. Coupled with optimism from investment banks and institutions, the company's valuation has the potential to climb even higher.