JCHX Mining Management Co., Ltd.: Net profit in H1 expected to increase by 74.62%-82.78% YoY due to increased production and sales of mineral products from mine development business

On July 9, JCHX Mining Management Co., Ltd.'s stock price dropped slightly. By 11:10 a.m. on the 9th, JCHX had fallen by 0.22%, trading at 46.1 yuan per share.

JCHX disclosed its semi-annual performance forecast on the evening of July 8. Based on preliminary calculations by the financial department, the company is expected to achieve a net profit attributable to shareholders of publicly listed firms of 1.07 billion yuan to 1.12 billion yuan for the first half of 2025, representing an increase of 457.2254 million yuan to 507.2254 million yuan compared to the same period last year (legally disclosed data), up YoY by 74.62% to 82.78%. The company is expected to achieve a net profit attributable to shareholders of publicly listed firms, excluding non-recurring gains and losses, of 1.05 billion yuan to 1.1 billion yuan for the first half of 2025, representing an increase of 440.7039 million yuan to 490.7039 million yuan compared to the same period last year (legally disclosed data), up YoY by 72.33% to 80.54%. (III) This performance forecast for the current period is a preliminary estimate made by the company based on its operating conditions and has not been audited by an accounting firm.

Regarding the main reasons for the anticipated increase in H1 performance, JCHX stated that the increase in the company's performance for the current period is mainly due to the increase in production and sales volume of mineral products from the mine resource development business, the rise in selling prices, and the company's continuous implementation of cost-reduction and fee-control measures, which have effectively controlled production costs.

JCHX announced on the evening of May 19 that its wholly-owned subsidiary, Jchx Botswana Mining Construction Proprietary Limited, had recently signed a service agreement with Khoemacau Copper Mining Proprietary Limited for underground mining operations at the Khoemacau copper mine. The contract is a unit-price contract, with the total contract price estimated to be approximately $805 million (excluding VAT) based on the estimated work volume, and the contract duration is five years.

JCHX stated on the investor interaction platform on May 15 that the company's resource development business primarily produces copper concentrates, copper cathode, and phosphate ore, adopting a direct sales model to sell to beneficiation and smelting enterprises or trading companies. Currently, its main customers include TRAFIGURA, IXM, etc.

JCHX announced on the evening of May 8 that, given the company's intention to acquire an additional 5% stake in CMH Colombia S.A.S., and upon completion of the acquisition, the company will indirectly hold a 55% stake in CMH Colombia S.A.S. as the controlling shareholder, leading the subsequent development and construction of the Alacran copper-gold-silver mine. To continuously advance the progress of the Alacran copper-gold-silver mine project, the company intends to contribute approximately $231.22 million in proportion to its shareholding for the construction of the Alacran copper-gold-silver mine project. This project is a mining and beneficiation project, with the mine adopting an open-pit mining method, and the total ore volume within the designed boundary is 97.9 million mt. The estimated project investment is $420.4 million, with a construction period of 2 years. After completion, the mine's lifespan is expected to be 14.2 years. The project's after-tax net present value (NPV) is $360 million (with a discount rate of 8%), and the internal rate of return (IRR) is 23.8%. The payback period is estimated to be 3 years. Regarding the impact of the investment on publicly listed firms, JCHX Mining Management Co., Ltd. stated: (1) The company acquired a stake in Cordoba Minerals Corp. in 2019 and subsequently directly holds a 50% equity interest in CMH. This time, it plans to acquire an additional 5% equity interest in CMH, aiming to deeply participate in the subsequent development and construction of the Alacran copper-gold-silver mine. After this equity acquisition, investing in the subsequent construction of the project in accordance with the shareholding ratio aligns with the company's long-term development plan, is conducive to promoting the company's sustained, stable, and healthy development, and does not harm the interests of the company, its shareholders, especially minority shareholders. (2) After the project is put into operation, it is expected to have a certain impact on the company's future business development and operating performance, which is conducive to the company's further expansion into the mine resource development field, improving the company's industrial layout, and promoting the company's sustained, stable, and healthy development.

JCHX Mining Management Co., Ltd. previously disclosed its 2024 annual report, showing that in 2024, the company achieved a total operating revenue of 9.942 billion yuan, up 34.37% YoY; and a net profit attributable to shareholders of 1.584 billion yuan, up 53.59% YoY. Regarding the reasons for the 2024 performance growth, the company stated that it was mainly due to the increased production and efficiency of mine projects in the mine resource development business during the reporting period. Specifically, the company achieved resource sales revenue of 3.209 billion yuan in 2024, up 412.85% YoY, accounting for 32.28% of the company's operating revenue during the reporting period, up from 8.46% in 2023. The annual production of copper metal (equivalent) was 48,700 mt, up 238.19% YoY; and the production of phosphate ore was 356,500 mt, up 115.67% YoY. JCHX Mining Management Co., Ltd. also announced in its 2024 annual report its 2025 business plan, which includes the following: Mine service sector: Complete a total underground excavation volume of 3.8694 million m³ and a total underground mining and ore supply volume of 44.1729 million mt (including ore mined using the natural caving method), with YoY changes of -7.25% and 6.46%, respectively. Resource development sector: Plan to produce 79,400 mt of copper metal, up 63.04% YoY; and produce 300,000 mt of phosphate ore, down 15.85% YoY.

On June 25, Kaiyuan Securities issued a research report, giving JCHX Mining Management Co., Ltd. a "buy" rating. The main reasons for the rating include: 1) Dual-wheel drive of "mine service + resources," with the domestic mine service leader riding the wave; 2) Mine service as the foundation, with increased industry demand expected to help the main business develop steadily; 3) Resources as the spearhead, with the resource development sector becoming the company's second growth curve. Risk alerts: The progress of the company's project construction is slower than expected; global copper resource supply exceeds expectations; the grade of global copper ores improves beyond expectations.

On May 6, Huayuan Securities issued a research report, giving a "buy" rating to Jinchengxin. The main reasons for the rating include: 1) The total volume of mining service business remains stable, with a decline in unit gross profit; 2) The resource development business accelerates its output; 3) It is planned to continue increasing copper ore output in 2025, with other aspects remaining relatively stable; 4) The copper business continues to increase its output in the first quarter of 2025, contributing to a significant increase in performance. Risk alerts: Risks of projects under construction not progressing as expected; risks of metal prices falling beyond expectations; risks of production safety; geopolitical risks.