2025 results slightly miss our forecast Western Mining announced its 2025 results: Revenue rose 23% YoY to Rmb61.7bn and net profit attributable to shareholders grew 24% YoY to Rmb3.64bn. In 4Q25, revenue fell 0.4% YoY and 21% QoQ to Rmb13.2bn, and net profit attributable to shareholders grew 250% YoY to Rmb697mn (-35% QoQ). The firm's 2025 earnings hit a record high, but slightly miss our expectations due to provisioning for fixed asset impairment loss of Rmb626mn.

Earnings hit a record high as output of most minerals exceeded planned levels and prices of copper and molybdenum both increased. First, the company's output mined copper, lead, and zinc totaled 167,504t, 62,997t, and 128,795t, -6%, +17%, and +20% YoY. Output of mined molybdenum was 4,051t, +1% YoY. The output of these four mined metals accounted for 100%, 96%, 103%, and 101% of the firm’s respective guidance. The output of mined lead is lower than its guidance mainly due to lower-than-planned treatment volume and grade of raw ore. Second, according to iFinD, domestic ASP of copper, lead, zinc, and molybdenum recorded YoY changes of +8%, -2%, -2%, and +7% YoY in 2025.

Trends to watch

Yulong Copper's renovation project started operation smoothly; planned output of mined copper and molybdenum in 2026 increases YoY. According to corporate filings, Yulong Copper's renovation project based on utilization technology upgrading was put into operation in 2025, with ore treatment volume rising to 1mnt/yr. The firm plans to increase mined output of copper and molybdenum in 2026 to 172,026t and 4,438t, up 3% and 10% YoY.

Yulong Copper accelerates reserve and output expansion; both internal and external expansion. Yulong copper mine added 1.31mnt of proven copper metal resources in 2025, laying a foundation for capacity expansion. The firm expects the Phase III project of the Yulong copper mine to complete infrastructure construction by the end of 2026, with annual treatment volume likely to rise 32% from 22.80mnt to 30mnt and to gradually expand to 45mnt (+97% from the current level).

Meanwhile, in October 2025, the firm’s controlling subsidiary Yulong Copper acquired the exploration and exploration rights of Chating copper-polymetallic mine in Anhui for Rmb8.6bn. This mine is a large porphyry-type copper-gold deposit that has 656,700t of proven industrial-grade copper metal (@0.54%), 1.09mnt of low-grade copper metals (@0.24%), and 248t of associated gold metals (@0.43g/t).

Financials and valuation

Due to rising metal prices, we raise our 2026 net profit forecast 15% to Rmb5.14bn and introduce our 2027 net profit forecast of Rmb5.64bn. The stock is trading at 11.6x and 10.6x 2026e and 2027e P/E. We maintain OUTPERFORM and raise our TP 15% to Rmb32.32, implying 15.0x and 13.7x 2026e and 2027e P/E and offering 28.9% upside.

Risks

Falling metal prices; disappointing output; slower-than-expected progress of projects.