1Q26 results in line with our expectation

In 1Q26, Zijin Mining’s revenue rose 24.8% YoY to Rmb98.50bn, and net profit attributable to shareholders rose 97.5% YoY and 44.3% QoQ to Rmb20.08bn. Recurring attributable net profit grew 108.89% YoY and 32.75% QoQ to Rmb16.60bn, in line with our expectations.

Trends to watch

Earnings rose sharply YoY and QoQ due to rising sales volume and prices of gold and copper.

Mined gold: Sales volume and prices both increased; costs edged up. In 1Q26, the average realized gold price rose 64.5% YoY to Rmb1,089/g, output increased 23.2% YoY to 23.5t, and production cost increased 6.3% YoY to Rmb331/g.

Mined copper: Sales volume fell but prices rose; costs edged up. In 1Q26, copper price rose 30.3% YoY to Rmb100,841/t, while output fell 9.9% YoY to 259,214t, mainly due to the Kamoa-Kakula copper mine accident. Production cost rose 7.6% YoY to Rmb39,612/t.

Mined zinc: Sales volume fell but prices rose; costs declined. In 1Q26, ASP of mined zinc rose 14.5% YoY to Rmb17,199/t, output fell 4.2% YoY to 84,509t, and production cost fell 5.5% YoY to Rmb9,689/t.

Lithium carbonate: Output increased; costs remained low. Lithium carbonate output reached 16,229t in 1Q26, thanks to capacity ramp-up at the 3Q lithium-bearing salar, the Lakko Tso salar, and the Xiangyuan lithium mine. Production cost was Rmb39,123/t, remaining at a low level in the industry.

Another M&A in gold sector; incremental growth in lithium sector accelerates. The firm plans to acquire a 25.85% stake in Chifeng Gold and obtain control. Chifeng Gold holds 583t of gold resources with an average grade of 1.54g/t. Its key gold assets include four domestic gold mines, as well as Lane Xang Minerals in Laos and the Wassa Mine in Ghana. Chifeng Gold produced 14.5t of gold in 2025, and we believe the firm may optimize its production operation and capacity after the acquisition, unleashing resource potential.

We expect accelerated incremental growth in the firm’s lithium business in 2026. The firm expects its lithium output to reach 120,000t lithium carbonate equivalent (LCE). The firm’ existing lithium projects are steadily ramping up, while construction of the Manono lithium project is progressing well, with full integration of mining and processing systems in place. The project is scheduled to commence operations in June 2026. We expect the lithium segment to become a key driver of the firm’s profit growth.

Financials and valuation

We maintain our earnings forecasts and ratings. A-shares are trading at 12.0x 2026e and 10.0x 2027e P/E, and our A-share TP implies 14.1x 2026e and 11.8x 2027e P/E with 17.8% upside. H-shares are trading at 11.4x 2026e and 9.4x 2027e P/E, and our H-share TP implies 13.2x 2026e and 10.9x 2027e P/E with 15.2% upside.

Risks

The Fed may increase interest rates to curb inflation; high inventory weighs on copper prices; disappointing progress of projects.