Investment Rating - The report maintains a "Buy" investment rating for the company [10] Core Views - The company reported a total operating revenue of 31.619 billion yuan, 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 [5] - The main mining operations showed strong performance, with copper production reaching 91,800 tons, a 7.65% increase year-on-year, and completion rates exceeding 100% for various minerals [5] - The profitability of the core subsidiary, Yulong Copper, significantly contributed to the overall profit growth, achieving a net profit of 3.491 billion yuan, with the company's share contributing 2.025 billion yuan, a 21.5% increase year-on-year [7] Summary by Sections Financial Performance - The company achieved a total operating revenue of 31.619 billion yuan, a 26.59% increase year-on-year, and a net profit of 1.869 billion yuan, reflecting a 15.35% growth [5] - The forecast for operating revenue from 2025 to 2027 is 58.085 billion, 60.872 billion, and 63.718 billion yuan respectively, with net profits projected at 3.826 billion, 4.125 billion, and 4.443 billion yuan [8][12] Production and Mining Operations - In the first half of 2025, the company produced 91,800 tons of copper, with a completion rate of 114%, and significant increases in zinc, lead, and molybdenum production [5] - The recovery rates for copper and molybdenum at Yulong Copper Mine improved significantly, contributing to enhanced production efficiency [5] Profitability and Forecast - The report indicates that the growth in copper production and prices (up 11%) has driven profitability, with Yulong Copper being a key profit contributor [7] - The current price-to-earnings ratio (PE) for the company is projected to be 10.8, 10.0, and 9.3 for the years 2025 to 2027 [8]

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.

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].

Core Viewpoint - The company reported significant growth in revenue and profit for the first half of 2025, driven by increased copper production and prices, alongside a positive outlook for copper prices in the long term [1][2][3]. Financial Performance - The company achieved operating revenue of 31.619 billion yuan, a year-on-year increase of 26.59% - Profit before tax reached 3.880 billion yuan, up 22.84% from the previous year - Net profit amounted to 3.363 billion yuan, with net profit attributable to shareholders of the parent company at 1.869 billion yuan, reflecting a growth of 15.35% [1]. Production and Operations - The company's copper production increased by 8% year-on-year, with prices rising by 11% - The Yulong Copper Mine, which the company holds a 58% stake in, produced 83,413 metric tons of copper, contributing to a revenue of 6.365 billion yuan and a net profit of 3.491 billion yuan, representing increases of 26.17% and 36.99% respectively [2]. - Overall copper production reached 91,752 metric tons, a growth of 7.65% compared to the previous year [2]. Market Outlook - The market anticipates a long-term bullish trend for copper prices due to limited new supply and increasing demand from the renewable energy sector - Short-term price fluctuations are expected due to external factors such as tariffs, but the long-term outlook remains positive with potential price increases driven by household appliance subsidies and infrastructure investments [3]. Commodity Price Trends - Various non-ferrous metal prices have risen, with lead prices up 2.2%, gold up 23.3%, silver up 20.8%, and molybdenum prices rebounding by 5% since the beginning of the year - The company reported significant increases in production across multiple minerals, including zinc (up 18.61%), lead (up 24.63%), and molybdenum (up 31.10%) [4]. Technological Advancements - The company is enhancing its operational efficiency through digital technology integration, including updates to instrumentation and process control systems - Research and development expenses reached 593 million yuan, a 99% increase year-on-year, with a focus on addressing technical bottlenecks and advancing 12 government-level research projects [6]. Shareholder Returns and ESG Performance - The company completed a cash dividend distribution of 2.383 billion yuan, with cumulative cash dividends since listing totaling 10.724 billion yuan, representing 57.72% of net profits - The company has received high ESG ratings from various institutions, indicating strong performance in environmental, social, and governance aspects [7].

Core Viewpoint - The company reported strong financial performance in Q1 2025, with significant revenue and profit growth, driven by increased production and favorable metal prices [1][2][3]. Financial Performance - In Q1 2025, the company achieved revenue of 16.542 billion yuan, representing a year-on-year increase of 50.74% and a quarter-on-quarter increase of 24.37% [1]. - The net profit attributable to shareholders was 808 million yuan, up 9.61% year-on-year and up 305.62% quarter-on-quarter [1]. Production Volume - The company saw substantial growth in the production and sales of its main products in Q1 2025: - Copper production reached 44,100 tons, a year-on-year increase of 14.35% and a quarter-on-quarter increase of 5.81% [2]. - Zinc production was 30,000 tons, up 18.17% year-on-year and 6.95% quarter-on-quarter [2]. - Lead production was 16,700 tons, showing a significant year-on-year increase of 38.38% and a quarter-on-quarter increase of 32.76% [2]. - Molybdenum production was 1,248 tons, up 43.64% year-on-year and 20.37% quarter-on-quarter [2]. - Iron concentrate production was 337,900 tons, up 14.69% year-on-year but down 13.48% quarter-on-quarter [2]. Future Prospects - The company is progressing with the preliminary procedures for the Yulong Phase III project, which is expected to enhance its production capacity significantly, reaching 30 million tons per year upon completion [2]. - The smelting segment also showed improved profitability, with copper smelting production at 90,100 tons, a year-on-year increase of 54.83% and a quarter-on-quarter increase of 11.64% [2]. Price Trends - In Q1 2025, metal prices showed a notable upward trend: - Domestic copper price was 77,000 yuan/ton, up 11.4% year-on-year and 2.3% quarter-on-quarter [3]. - Zinc price was 24,000 yuan/ton, up 14.4% year-on-year but down 5.8% quarter-on-quarter [3]. - Lead price was 17,000 yuan/ton, up 6.0% year-on-year and 1.1% quarter-on-quarter [3]. - Molybdenum concentrate price was 3,509 yuan/ton, up 5.4% year-on-year but down 5.1% quarter-on-quarter [3]. Earnings Forecast - The company forecasts earnings per share (EPS) of 1.43 yuan, 1.79 yuan, and 2.12 yuan for the years 2025 to 2027, with price-to-earnings (PE) ratios of 11, 9, and 7 respectively [3].

Core Viewpoint - The company reported strong financial performance for Q1 2025, with significant year-on-year and quarter-on-quarter growth in revenue and net profit, driven by increased production and favorable metal prices [1][2][3]. Financial Performance - In Q1 2025, the company achieved operating revenue of 16.542 billion yuan, a year-on-year increase of 50.74% and a quarter-on-quarter increase of 24.37% [1]. - The net profit attributable to shareholders was 808 million yuan, up 9.61% year-on-year and up 305.62% quarter-on-quarter [1]. - The net profit excluding non-recurring items was 781 million yuan, reflecting a year-on-year growth of 9.17% and a quarter-on-quarter growth of 331.23% [1]. Production and Pricing - The company's copper production reached 44,100 metric tons in Q1 2025, marking a year-on-year increase of 14.35% and a quarter-on-quarter increase of 5.81% [2]. - The production of zinc, lead, and molybdenum was 30,000, 16,700, and 1,200 metric tons respectively, with year-on-year growth rates of 18.17%, 38.38%, and 43.64% [2]. - Average prices for copper, lead, and zinc increased by 11.4%, 5.8%, and 14.1% year-on-year, while molybdenum concentrate prices rose by 5.1% [2]. Smelting Capacity and Cash Flow - The company has enhanced its smelting capacity, achieving annual capacities of 350,000 tons for copper, 200,000 tons for zinc, and 200,000 tons for lead [3]. - In Q1 2025, copper smelting production was 90,100 tons, up 54.83% year-on-year, while lead smelting production surged by 1,752.30% [3]. - Operating cash flow reached 2.615 billion yuan, a significant year-on-year increase of 423.69% [3]. Cost Management - The company effectively managed its expenses, with a period expense ratio of 3.75%, down 0.87 percentage points year-on-year [3]. - The breakdown of expense ratios included sales at 0.06%, management at 1.56%, R&D at 1.26%, and financial expenses at 0.87% [3]. Profit Forecast and Valuation - The company forecasts net profits of 3.226 billion, 3.969 billion, and 4.723 billion yuan for 2025-2027, with respective year-on-year growth rates of 10.06%, 23.03%, and 18.98% [4]. - Earnings per share (EPS) are projected to be 1.35, 1.67, and 1.98 yuan, with corresponding price-to-earnings (P/E) ratios of 11.4, 9.3, and 7.8 [4].