Zijin Mining’s third-quarter profit slightly below expectations: copper supports gross margin as full-year production targets require a final push
Gold, copper and lithium production in the first three quarters each fell short of seventy percent of their full-year targets. JPMorgan maintains its Overweight rating, focusing on fourth-quarter project ramp-ups and subsequent production guidance.
Original source：J.P. MorganFirst published on Unhidea：Original source date：
Key takeaway
Zijin Mining’s margins and cash flow remain strong, but slower-than-expected production delivery weighed on third-quarter results. The pace of production growth in the fourth quarter is critical to meeting full-year targets.
Why did profit growth still fall slightly short of expectations?
In the third quarter of 2026, net profit attributable to shareholders was 18.4 billion yuan, up 26% year on year and down 4% quarter on quarter; core profit was 17.8 billion yuan, up 42% year on year and down 9% quarter on quarter. JPMorgan said results were slightly below expectations, mainly because production delivery was lower than expected.
Net profit attributable to shareholders in the first nine months was 57.5 billion yuan, up 52% year on year, but reached only about 70%–71% of the bank’s full-year forecast and Bloomberg’s full-year market consensus. JPMorgan expects the market may slightly lower its full-year earnings forecasts.
How far short are full-year production targets?
In the first nine months, mined gold production was 70.1 tonnes, or 67% of the full-year target of 105 tonnes; mined copper was 815.7 thousand tonnes, or 68% of the target of 1.2 million tonnes; and lithium carbonate equivalent was 79.1 thousand tonnes, or 66% of the target of 120 thousand tonnes. All three were below the 75% progress implied by an even pace throughout the year.
The company said the Akyem and RG Gold mines continue to ramp up capacity. The Julong copper project has registered additional copper metal resources of 2.75 million tonnes and is expected to enter production by the end of 2026. JPMorgan believes attention will shift to the fourth-quarter production ramp-up at each mine and whether this year’s production shortfall affects guidance for 2027–2028.
Why did the gross margin rise, and which products faced pressure?
The overall gross margin in the third quarter was 36.5%, up 12 percentage points year on year and 0.5 percentage points quarter on quarter. Mined copper was the main support: its average selling price rose 5% quarter on quarter, while gross profit per unit rose 6% to 60.5 thousand yuan per tonne.
Gross profit per unit for gold and lithium fell alongside selling prices. The average selling price of mined gold fell 9% quarter on quarter, and gross profit per unit fell 14% to 555 yuan per gram; the average selling price of lithium carbonate fell 23%, and gross profit per unit fell 24% to 60 thousand yuan per tonne.
On costs, unit costs for mined gold and copper rose 2% and 4% quarter on quarter, respectively, which JPMorgan considered broadly in line with expectations; lithium carbonate unit costs fell 21% quarter on quarter.
What can the Chifeng Gold acquisition and cash flow deliver?
Zijin Mining completed the relevant share transfer and subscription involving Chifeng Gold on 22 October, bringing its combined stake to 25.85% and giving it control. JPMorgan expects Chifeng Gold’s annualised gold production of approximately 15 tonnes to expand Zijin’s gold business, contributing 0.3% and 1.4% to earnings in the fourth quarter of 2026 and the full year of 2027, respectively.
Third-quarter operating cash flow was 28.8 billion yuan, up 24% year on year; free cash flow was 21.1 billion yuan. For the first nine months, the two figures were 84.3 billion yuan and 63.6 billion yuan, respectively, supporting project capital expenditure and resource expansion.
JPMorgan maintains its Overweight ratings on the A-shares and H-shares, with respective price targets for December 2027 of 46 yuan and 50 Hong Kong dollars. The bank is positive on the copper and gold businesses and the medium-term project pipeline, but the pace of capacity ramp-up remains the key near-term factor.
