1H26 results beat market expectations

JCHX Mining Management announced its 1H26 results: Revenue rose 20.97% YoY to Rmb7.64bn, and net profit attributable to shareholders grew 45.30% YoY to Rmb1.61bn. In 2Q26, revenue rose 20.59% YoY and 23.82% QoQ to Rmb4.23bn, and net profit attributable to shareholders grew 46.98% YoY and 68.37% QoQ to Rmb1.01bn. The firm’s 1H26 results beat market expectations, primarily driven by improved management of mining services business and higher prices of mineral products.

YoY growth in mining services business turns positive; resource business maintains solid growth. In 1H26, gross profit of the mining services business rose 15.9% YoY to Rmb0.9bn, primarily driven by improved management efficiency and the roll out of new projects. In 1H26, the firm signed about Rmb3.6bn worth of new contracts, which equals 105% of its mining services revenue in 1H26.

The gross profit of the resource business grew 52.6% YoY to Rmb2.1bn, with the copper business continuing to see growth in both volume and price. In 1H26, copper equivalent output rose 12% YoY to about 47,000 tonnes, with copper prices growing 31% YoY. We believe the mining services business has reached an inflection point. This, coupled with volume and price growth in the resource business, continues to drive earnings growth.

Trends to watch

Growth driven by both mining services and resource businesses; global capital operations to usher in a new phase of development. The firm continues to pursue a growth model driven by its mining services and resource businesses. In July, the firm announced plans to issue H-shares to expand its financing channels and promote global expansion. We believethe acquisition of high-quality overseas mining services projects could help the firm’s mining services business to regain growth momentum. Meanwhile, diversified capital platforms could also potentially boost the growth potential of the resource business, in our view.

Accelerated ramp-up of copper mining capacity; resource business to be a key growth driver. According to corporate filings, the firm owns four copper mines, with attributable copper resources totaling 3.33mn tonnes. In 1H26, the firm completed the acquisition of a 97.5% stake in a copper mine in Colombia. The project has obtained environmental approval and entered the preparation phase. The firm plans to produce around 100,000 tonnes of copper equivalent in 2026 (up 9.4% YoY), with output likely to reach 180,000 tonnes by 2030, implying a CAGR of 15% in 2025–2030. We believe the firm’s mining services business may effectively strengthen its resource business, creating strategic synergies to accelerate the firm’s earnings growth.

Financials and valuation

Given higher copper prices, we raise our 2026 and 2027 earnings forecasts 14% and 14% to Rmb3.4bn and Rmb3.81bn. The stock is trading at 14.8x 2026e and 13.2x 2027e P/E. We maintain an OUTPERFORM rating. Given that market risk appetite has strengthened, we raise our target price 28% to Rmb103.4, implying 19.0x 2026e and 16.9x 2027e P/E, with an upside of 28%.

Risks

Sharp fluctuations in product prices; slower-than-expected progress of projects; increased geopolitical risks.