Key takeaway

The company recorded operating revenue of RMB6.385bn in 1H26, up 20.66% YoY, and net profit attributable to shareholders of the parent company of RMB605mn, up 37.32% YoY. Driven by its dual engines of resources and engineering, the company made steady progress in its engineering business and achieved breakthroughs across multiple fronts in expanding resource reserves and increasing production. In 1H26, the company completed the acquisition and consolidation of the Raura mine project in South America, successfully secured the Hari Zha exploration right in Qinghai through bidding, commenced construction of the 1.65mn metric tons per year mining and processing expansion project at the Baiyinnuoer mine in Inner Mongolia, successfully transitioned Xindu Mining in Mongolia from open-pit to underground mining, and obtained the Environmental Feasibility Decision (SKKL) for the Dairi mine in Indonesia. Its resource development business has entered a period of rapid growth.

Event

Net profit attributable to shareholders of the parent company reached RMB605mn in 1H26, up 37.32% YoY. In 1H26, the company recorded operating revenue of RMB6.385bn, up 20.66% YoY; net profit attributable to shareholders of the parent company was RMB605mn, up 37.32% YoY; basic earnings per share were RMB0.3039, up 37.45% YoY; and return on equity was 9.77%, up 2.26 pcts YoY.

Risks: 1. The company operates in a highly cyclical industry. Significant fluctuations in non-ferrous metal prices may reduce profit and cause results to fall short of expectations; 2. The company’s engineering contracting business has strong brand recognition overseas. However, geopolitical factors may result in force majeure events and create risks concerning the collection of project contract payments; 3. Villagers near the Dairi leadzinc mine in Indonesia have filed an administrative lawsuit against the Ministry of Environment, requesting the revocation of its environmental feasibility approval. The environmental impact assessment approval for Dairi remains valid, but the risk of its subsequent revocation cannot be ruled out. The Dairi project is currently in the infrastructure construction phase and does not affect the company’s current operating results. 4. The company has recently obtained multiple mining rights, but resource exploration may fall short of expectations.