Summary of Western Mining's Conference Call Company Overview - **Company**: Western Mining - **Date**: July 28, 2025 Key Industry and Company Insights Production and Financial Performance - In the first half of 2025, Western Mining produced: - Copper: 91,700 tons, up 7.6% YoY [2][3] - Zinc: 62,900 tons, up 18.61% YoY [2][3] - Lead: 35,100 tons, up 24.63% YoY [2][3] - Molybdenum: 2,525 tons, up 31.1% YoY [2][3] - Iron concentrate: 719,000 tons, up 11.93% YoY [2][3] - Revenue reached 31.6 billion yuan, a 27% increase YoY [3] - Total profit was 3.88 billion yuan, up 23% YoY [3] - Net profit attributable to shareholders was 1.87 billion yuan, up 15% YoY [3] Raw Material Sourcing and Costs - Copper smelting relies heavily on purchased anode plates and copper concentrates, with some sourced from Yulong Copper Mine [2][5] - The cost of processing anode plates is approximately 500 to 600 yuan per ton, leading to losses in this segment [6] - The complete cost of copper concentrate is around 4,800 to 4,900 yuan per ton [9] Project Developments - The Yulong Project Phase III is expected to be completed by the end of 2026, with an estimated investment of 4.8 billion yuan [2][10] - The project will increase copper concentrate production to 180,000 to 200,000 tons, but costs will rise to 35,000 to 36,000 yuan per ton [10] Profitability and Challenges - The company reported a profit of 5.8 million yuan from Xianghe Nonferrous, while Xigu Precious Metals incurred a loss of 140 million yuan [2][12] - Zinc smelting is profitable, but lead smelting in Qinghai is currently unprofitable due to high processing costs [13] Asset Impairment and Future Risks - An asset impairment of over 100 million yuan was recorded due to significant price declines in vanadium and hydrofluoric acid [14] - Future impairments may occur if product prices continue to fluctuate [14] Research and Development - R&D expenses increased by nearly 300 million yuan due to initial production challenges at new smelting plants and investments in the Xigui project [20] - The company plans to invest 2.9 billion yuan in equipment upgrades, with over 600 million yuan allocated for modernization [23] Strategic Initiatives - A new resource expansion department was established in Tibet and Qinghai to enhance exploration and acquisition efforts [4][16] - The company aims to improve recovery rates through technological advancements, although there are limits based on ore quality [22] Debt Management and Shareholder Returns - The company has a significant debt load but maintains a low cost of debt, with long-term borrowing rates between 1.1% and 3% [32] - The dividend policy for 2025 remains under consideration, with a focus on balancing shareholder returns and investment needs [26][27] Market Outlook - Western Mining does not plan to reduce production despite market pressures, as it has social responsibilities as a state-owned enterprise [31] - Future production increases are expected, but growth will be limited post-Phase III completion [19] Conclusion - Western Mining is positioned for growth with ongoing projects and strategic initiatives, but faces challenges in raw material costs and market fluctuations. The focus on R&D and resource expansion indicates a proactive approach to maintaining competitiveness in the mining sector.

Core Viewpoint - The company, Western Mining (601168.SH), reported significant growth in revenue and net profit for the first half of 2025, driven primarily by increased copper production and prices. Financial Performance - In the first half of 2025, Western Mining achieved operating revenue of 31.619 billion yuan, a year-on-year increase of 26.59% - The net profit attributable to shareholders reached 1.869 billion yuan, reflecting a year-on-year growth of 15.35% [1][2] Production and Mining Operations - The growth in performance is attributed to an 8% increase in copper production and an 11% rise in copper prices compared to the same period last year - The main copper mine, Yulong Copper Mine, produced 83,413 tons of copper, while the company’s overall copper production reached 91,752 tons, a 7.65% increase year-on-year [3][4] Expansion Plans - Western Mining is continuing its expansion efforts, with the Yulong Copper Mine's third-phase project approved, increasing production capacity from 19.89 million tons per year to 30 million tons per year - The total investment for this project is estimated at 4.793 billion yuan, which includes the construction of a new 11 million tons per year concentrator and an increase in hydrometallurgical capacity from 300,000 tons per year to 1 million tons per year [4] Commodity Prices and Production Growth - In addition to copper, prices for various non-ferrous metals have risen, with lead prices up 2.2%, gold up 23.3%, silver up 20.8%, and molybdenum up 5% since the beginning of the year - The company also reported significant increases in the production of zinc (up 18.61%), lead (up 24.63%), molybdenum (up 31.10%), iron concentrate (up 11.93%), and gold concentrate (up 32.67%) [5] Research and Development - The company has significantly increased its R&D expenditure, which reached 5.93 billion yuan in the first half of 2025, a 99% increase year-on-year - The focus has been on addressing technical bottlenecks and aligning R&D with industry needs, resulting in 23 patent applications during the reporting period [6]

Group 1 - The metal zinc sector experienced a decline of 1.74%, ranking among the top losers in the concept sector, with *ST Zhengping hitting the limit down, and Zhejiang Fu Holdings, Huaxi Nonferrous, and Hunan Gold also showing significant declines [1] - The main funds in the metal zinc sector saw a net outflow of 955 million yuan, with 29 stocks experiencing net outflows, and 6 stocks seeing outflows exceeding 50 million yuan [2] - The stock with the highest net outflow was Xingye Yinxin, with a net outflow of 131 million yuan, followed by Zhejiang Fu Holdings, Huayu Mining, and Hunan Silver, with net outflows of 123 million yuan, 81.92 million yuan, and 78.92 million yuan respectively [2] Group 2 - The top gainers in the market included PCB concept (+4.33%), military equipment restructuring concept (+4.08%), and PET copper foil (+4.03%), while the coal concept and metal zinc were among the top losers [2] - The net inflow of main funds was observed in stocks such as Zijin Mining, Hongda Co., and Western Mining, with net inflows of 47.60 million yuan, 24.09 million yuan, and 17.70 million yuan respectively [2][3] - The trading volume and turnover rates varied among the stocks, with notable outflows from stocks like Xingye Yinxin (-2.67%, turnover rate 3.41%) and Zhejiang Fu Holdings (-6.00%, turnover rate 9.02%) [3]

Group 1 - The metal lead concept declined by 1.70% as of the close on July 28, ranking among the top declines in the concept sector, with companies like Zhejiang Fu Holdings, Huaxi Nonferrous, and Hunan Gold experiencing significant drops [1] - The metal lead concept saw a net outflow of 1.204 billion yuan from main funds today, with 26 stocks experiencing net outflows, and 8 stocks seeing outflows exceeding 50 million yuan. The largest net outflow was from Chifeng Gold, which had a net outflow of 233 million yuan [2] - The stocks with the largest net outflows in the metal lead concept included Chifeng Gold, Xingye Silver Tin, and Zhejiang Fu Holdings, with net outflows of 233 million yuan, 131 million yuan, and 123 million yuan respectively [2][3] Group 2 - The top gainers in the concept sectors today included PCB concept with a gain of 4.33%, while the metal lead concept was among the top decliners with a drop of 1.70% [2] - The main funds saw net inflows in stocks such as Zijin Mining, Western Mining, and Tibet Summit, with net inflows of 47.6 million yuan, 17.7 million yuan, and 7.3 million yuan respectively [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company's revenue for the first half of 2025 reached 31.619 billion yuan, a year-on-year increase of 26.59%, while the net profit attributable to shareholders was 1.869 billion yuan, up 15.35% year-on-year [4][12] - The production of copper, zinc, lead, and molybdenum increased significantly, with copper production at 91,800 tons, a year-on-year growth of 7.65% [4][13] - The company’s main copper mine, Yulong Copper Mine, achieved a production of 83,400 tons in the first half of 2025, generating revenue of 6.365 billion yuan, a 26.17% increase year-on-year [15] Summary by Sections Financial Performance - In 2025H1, the company reported a revenue of 31.619 billion yuan, with a net profit of 1.869 billion yuan, reflecting a year-on-year growth of 26.59% and 15.35% respectively [12] - The second quarter of 2025 saw a revenue of 15.078 billion yuan, a 7.67% increase year-on-year, but an 8.85% decrease quarter-on-quarter [12] Production and Sales - The production volumes for copper, zinc, lead, and molybdenum in 2025H1 were 91,800 tons, 62,900 tons, 35,100 tons, and 2,500 tons respectively, with year-on-year growth rates of 7.65%, 18.61%, 24.63%, and 31.10% [13] - The average prices for copper, lead, zinc, and molybdenum concentrates showed mixed trends, with copper prices increasing by 3.7% year-on-year [13] Future Outlook - The Yulong Copper Mine's third-phase expansion project has been approved, which is expected to increase the production capacity from 1.989 million tons per year to 3 million tons per year, potentially yielding 180,000 to 200,000 tons of copper annually [15][16] - The company forecasts net profits for 2025-2027 to be 3.637 billion, 3.979 billion, and 4.651 billion yuan respectively, with expected growth rates of 24.08%, 9.40%, and 16.89% [16]

已公布半年报公司净利润增幅排名 | 代码 | 简称 | 每股收益 | 净利润（万 | 净利润同比 | 营业收入（万 | 营业收入同比 | | --- | --- | --- | --- | --- | --- | --- | | | | （元） | 元） | （%） | 元） | （%） | | 688636 | 智明达 | 0.2284 | 3829.80 | 2147.93 | 29475.64 | 84.83 | | 002052 | 同洲电 子 | 0.2722 | 20307.14 | 662.77 | 53976.95 | 606.52 | | 002107 | 沃华医 药 | 0.0800 | 4467.64 | 303.16 | 42535.85 | 7.64 | | 605228 | 神通科 技 | 0.1500 | 6427.80 | 111.09 | 81572.69 | 22.46 | | 300604 | 长川科 技 | 0.6800 | 42702.18 | 98.73 | 216684.82 | 41.80 | | 600257 | 大湖股 份 | -0.0053 | -257. ...

Investment Rating - The report rates the industry as "Outperform" [1] Core Views - Gold prices are expected to fluctuate due to tariff agreements and Federal Reserve independence issues, with prices initially rising before declining [2][9] - Copper prices are supported by positive market sentiment and upcoming tariff implementation, despite potential supply and demand pressures [10][12] - The aluminum sector is experiencing price fluctuations influenced by macroeconomic sentiment and inventory levels, with long-term demand expected to remain strong [11][12] Summary by Sections Weekly Research Insights - Gold prices are under pressure due to evolving tariff agreements and scrutiny of the Federal Reserve's independence, with a long-term bullish outlook on gold [9] - Copper prices are supported by positive sentiment in the domestic commodity market and upcoming tariff changes, with a long-term optimistic outlook [10] - Aluminum prices are influenced by macroeconomic factors and inventory levels, with expectations of sustained high profitability in the sector [11] Market Performance - The non-ferrous metal index increased by 7.10%, outperforming the broader market by 5.43%, ranking third among 30 sub-industries [12] - The top-performing sectors include tungsten, lithium, and rare earth materials, with significant individual stock gains [12] Metal Prices and Inventory - Prices for various metals, including lithium and cobalt, have shown significant increases, indicating strong demand and market dynamics [22][24][27] - Basic metals have generally seen price increases both domestically and internationally, with specific price movements detailed for copper, aluminum, zinc, lead, nickel, and tin [27][28] - Inventory levels for metals such as copper and aluminum have shown mixed trends, impacting market supply dynamics [35][36]

Investment Rating - The industry investment rating is "Positive" and maintained [8] Core Views - The macroeconomic outlook is improving, leading to a comprehensive rise in metal prices, particularly strategic metals [2][4] - The report emphasizes the importance of strategic metals and bottom energy metal allocation opportunities, highlighting the revaluation of rare earths and tungsten [4] - The report suggests that the domestic growth stabilization and anti-involution policies are enhancing expectations, which is driving up domestic commodity prices [5][6] Summary by Sections Strategic Metals - Strategic metals such as rare earths and tungsten are experiencing a revaluation, with significant price increases expected due to government focus and international supply chain developments [4] - The price of rare earth concentrate has increased to 19,100 CNY/ton, reflecting a 1.5% increase [4] - Tungsten prices are also on the rise, supported by strong supply dynamics and improving company performance [4] Energy Metals - The report indicates a high probability of short-term price increases for cobalt, with a significant drop in imports noted [4] - Cobalt intermediate imports in June fell to 18,991 tons, a decrease of 61.6% month-on-month [4] - Nickel prices are expected to stabilize, with long-term price expectations likely to rise [4] Lithium - The report notes a bottoming out of lithium prices, with recent regulatory changes indicating stricter domestic mining controls [4] - The price of battery-grade lithium carbonate has rebounded by 15.2% to 76 CNY/kg [24] - The report suggests monitoring potential resource releases in the lithium sector [4] Precious Metals - Gold prices are fluctuating due to improved risk appetite and easing trade tensions, with a recommendation to increase allocation to precious metal stocks [4][6] - The report highlights that gold stocks have underperformed, suggesting a strategic buying opportunity [4] - Silver is noted for its potential upside, with a recommendation to consider silver stocks for recovery [4] Industrial Metals - The report indicates that industrial metals are experiencing mixed performance, with domestic prices leading international trends [5][6] - Copper prices on the SHFE increased by 1.1%, while aluminum prices rose by 1.2% [5] - The report emphasizes the importance of monitoring macroeconomic policies and their impact on metal demand [6]

证券研究报告 | 公司点评报告 2025 年 07 月 27 日 西部矿业（601168.SH） 玉龙驱动利润增长 三期打开未来增长空间 周期/金属及材料 公司公布 2025 年中报。2025 年上半年收入和归母净利润分别 316.19、18.69 亿元，分别增长 26.59%、15.35%。Q2 单季度净利润 10.62 亿元，同比、环比 分别增 20.1%、31.4%。 铜量增价涨贡献主要利润增长：2025H1 主要矿产金属产量全面增长，且产量 全面超预期。矿产铜、锌、铅、钼产量分别 9.2 万吨、6.3 万吨、3.5 万吨、 2525 吨，分别同比增 7.65%、18.61%、24.63%、31.1%。其中铜精矿全年 产量目标 16.8 万吨，上半年产量超预期。其中玉龙铜矿产量 8.3 万吨，获各 琦铜矿 0.7 万吨。上半年电解铜价格 77770 元/吨，同比上涨 4.3%。 2025Q2 矿产铜产量 4.8 万吨，同比环比分别增 2.1%、8.1%；矿产锌产量 3.3 万吨，同比环比分别增 19%、9.9%；矿产铅产量 1.8 万吨，同比环比分别增 14.3%、10.4%；矿产钼产量 1277 吨， ...

Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 17.48 yuan [6]. Core Views - The company reported a revenue of 31.619 billion yuan for H1 2025, representing a year-on-year increase of 26.59%, and a net profit attributable to shareholders of 1.869 billion yuan, up 15.35% year-on-year [1]. - The growth in performance is driven by stable increases in the production of key mineral products, particularly copper, with H1 copper production reaching 91,800 tons, a 7.65% increase year-on-year [2]. - The company is expected to achieve net profits of 3.666 billion yuan, 4.105 billion yuan, and 4.800 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 11x, 10x, and 9x [4]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of 15.078 billion yuan, a year-on-year increase of 7.67%, but a quarter-on-quarter decrease of 8.85% [1]. - The net profit for Q2 2025 was 1.062 billion yuan, reflecting a year-on-year increase of 20.13% and a quarter-on-quarter increase of 31.41% [1]. - The company’s H1 net profit growth was primarily attributed to increased production and sales prices, particularly from Yulong Copper, which contributed significantly to the overall profit increase [2]. Production and Operations - The company’s copper smelting production increased by 50% year-on-year in H1 2025, with a production volume of 182,200 tons [3]. - The production of zinc, lead, and molybdenum also showed positive growth, with respective outputs of 62,900 tons, 35,100 tons, and 2,500 tons in H1 2025, achieving completion rates of 103%, 110%, and 132% [2]. - The company is actively expanding its mining projects, with ongoing developments in Yulong Copper and other mineral projects, which are expected to enhance production capacity [4]. Future Outlook - The report anticipates continued growth in net profits and revenue, driven by the successful implementation of expansion projects and favorable market conditions for metals [4]. - The company’s dividend payout ratio was high at 81% in 2024, distributing 2.383 billion yuan, indicating a strong commitment to returning value to shareholders [4].