Key Takeaways:
Jiangxi Copper reported 1H26 net profit of RMB8.63 billion, up 107% year on year, far exceeding market expectations.
"The results exceeded the upper end of the company's profit alert and were far above market expectations," BofA Securities said in a report, citing higher prices of core products, stronger sales volume and a 1.9 percentage-point expansion in gross margin to 5.8%.
Second-quarter net profit reached RMB5.81 billion, up 162% year on year and 106% quarter on quarter. Operating revenue rose 19.53% to RMB307.155 billion, with basic earnings per share of 2.5 yuan. The company attributed the gains to changes in the prices and sales of its main products.
BofA raised its 2026 and 2027 net profit forecasts for Jiangxi Copper by 37% and 46% to RMB13.6 billion and RMB15.4 billion respectively. It lifted the Hong Kong-listed shares target price 16% to HKD50 and the A-share target 11% to RMB61, maintaining a Buy rating.
The earnings beat comes as copper concentrate supply tightens. Spot treatment and refining charges have fallen to a historic low below negative USD180 per tonne, but BofA said the short-term impact on Jiangxi Copper's earnings remains manageable because a high proportion of its supply is covered by long-term contracts. The resumption of processing stockpiled ore at First Quantum Minerals' Cobre Panama mine should also help recover earnings contributions from associates.
Sulfuric acid prices, a byproduct of copper smelting, surged 169% year on year on average year-to-date, supporting profitability of the smelting business. BofA also cited potential upside in the copper foil business as artificial intelligence demand accelerates.
Shares of Jiangxi Copper jumped about 9.6% in Hong Kong and 10% on the Shanghai exchange following the results.
The forecast upgrades reflect expectations that copper prices and sulfuric acid margins will hold, while associate earnings recover as Cobre Panama restarts. Investors will watch second-half smelting margins and the pace of the Cobre Panama ramp-up for confirmation of the revised guidance.
This article is for informational purposes only and does not constitute investment advice.
