Results Review

1H26 results in line with our expectations

In 1H26, revenue rose 16% YoY to Rmb194.2bn, net profit attributable to shareholders grew 68% YoY to Rmb39.1bn, and recurring attributable net profit rose 76% YoY to Rmb38bn. In 2Q26, revenue rose 8% YoY but fell 3% QoQ to Rmb95.7bn, net profit attributable to shareholders grew 45% YoY but fell 5% QoQ to Rmb19.1bn, and recurring net profit rose 67% YoY and 6% QoQ to Rmb19.6bn.

Trends to watch

Earnings grew sharply YoY, underpinned by higher prices and sales volumes for gold and copper. Gold prices rose 44% YoY in 1H26, with mined gold output growing 13% YoY to 46.7t and unit cost rising 11% YoY to Rmb291/g. Copper prices rose 31% YoY to Rmb103,000/t, while mined copper output grew 5% YoY to 534,000t (excluding Kamoa). Unit cost for mined copper rose 13% YoY to Rmb28,000/t. Lithium carbonate production reached 44,000t in 1H26, with unit costs down slightly to Rmb37,000/t, remaining cost-competitive.

Major project capacity is expanding, while digital and intelligent transformation is accelerating. In gold, overseas mine expansion plans are progressing, with internal approval completed for a 3mnt/yr underground mining capacity expansion at the Akyem Gold Mine and a 10mnt/yr expansion at the Raygorodok Gold Mine. In copper, although guidance for the Kamoa copper mine was revised down due to a well flooding incident, the Julong copper mine expansion has been completed and commissioned, and the Junuo copper mine is scheduled for completion and commissioning by end-2026, which should contribute significant incremental earnings to the Xizang copper segment. In lithium, the Manono lithium mine began heavy-medium processing in May 2026, about one month ahead of schedule. A series of smelting projects are scheduled to be completed and commissioned by end-2026. In 3Q26, capacity at the salt lake lithium mine, the Laguocuo salt lake lithium mine, and the Xiangyuan hard rock lithium mine continued to ramp up steadily. Zijin is accelerating digital and intelligent transformation to improve mine management, including deployment of electric and unmanned mining trucks. We expect these technological advances to support long-term cost reduction.

Financials and valuation

Considering the upward trend in gold and copper prices, we raise our 2026 earnings forecast 4.7% to Rmb82.52bn and maintain our 2027 earnings forecast. We keep the OUTPERFORM rating and target price unchanged for both Aand H-shares. A-shares are trading at 11.1x 2026e and 9.2x 2027e P/E and our target price implies 13.5x 2026e and 11.2x 2027e P/E with 21% upside. H-shares are trading at 10.5x 2026e and 8.4x 2027e P/E, and our target price implies 12.2x 2026e and 9.8x 2027e P/E with 17% upside.

Risks

Fed rate hikes to curb inflation; high inventories to dampen copper prices; disappointing progress of projects.