3Q26 results in line with our expectations

Western Mining announced its 3Q26 results: Revenue rose 23% YoY to Rmb59.8bn, and net profit attributable to shareholders grew 131% YoY to Rmb6.79bn in 1–3Q26. In 3Q26, revenue rose 21% YoY but declined 2% QoQ to Rmb20.3bn, and net profit attributable to shareholders grew 143% YoY and 1% QoQ to Rmb2.62bn.

Rising prices of copper, molybdenum and byproduct sulfuric acid drive earnings to new highs in 1–3Q26. Output: The firm's output of mineral copper, lead, zinc and molybdenum reached 128,129t, 42,535t, 90,401t and 3,532t in 1–3Q26, down 7%, 15% and 5% YoY and up 0.5% YoY, respectively. Actual output as a percentage of plan for the four minerals reached 75%, 67%, 71% and 80%, respectively. Mineral lead output fell short of plan mainly due to lower-thanplanned raw ore treatment volume and selected grade.

Prices: According to iFinD, domestic ASP of copper, lead, zinc, molybdenum and sulfuric acid rose 33%, declined 3%, and rose 8%, 27% and 170% YoY in 1–3Q26.

Rising copper, molybdenum and zinc prices offset lower output in 3Q26; quarterly earnings edge up QoQ. Output: The firm's output of mineral copper, lead and zinc declined 16%, 13% and 17% YoY, while mineral molybdenum output rose 17% YoY in 3Q26. Output of the four minerals declined 19%, 18%, 25% and 9% QoQ. Prices: According to iFinD, domestic ASP of copper, lead, zinc, molybdenum and sulfuric acid rose 35%, declined 6%, and rose 15%, 26% and 169% YoY in 3Q26. Their ASPs rose 4%, declined 4%, rose 5% and 10%, and declined 1% QoQ.

Trends to watch

Increased registered reserves at Chating mine pave way for further growth in reserves and output. According to corporate filings, on October 9, 2026, Chating Mining's mineral resource reserves completed the review and filing process, comprising 2.39mnt of contained copper at an average grade of 0.29%, 313t of contained gold as an associated mineral at 0.39g/t, and 1,430t of contained silver as an associated mineral at 2.15g/t. The registered contained copper and gold reserves increased 37% and 26%, respectively, compared with when the mine was acquired in 2025, laying the groundwork for obtaining mining rights.

The firm plans to complete infrastructure construction of the Yulong Copper Phase III project by end-2026, increasing annual ore treatment capacity from 22.8mnt to 30mnt (+32%), and gradually raising it to 45mnt (+97% from the current level). In August, the firm jointly established Tibet Xikuang Geological Technology Co., Ltd. with the Chinese Academy of Geological Sciences, taking a 70% stake in the joint venture and laying the foundation for future increases in reserves and output.

Financials and valuation

We keep our earnings forecasts largely unchanged. The stock is trading at 9.7x 2026e and 8.7x 2027e P/E. We maintain an OUTPERFORM rating. Considering falling market risk appetite, we lower our target price 17.77% to Rmb39.98, implying 12.3x 2026e and 11.0x 2027e P/E, and offering 26.24% upside.

Risks

Falling metal prices; slower-than-expected progress of projects; macro risks from geoeconomic conflicts.