Yunnan Copper's record of its online 2026 semi-annual results briefing released on September 3 shows:
1. How did hedging business perform in H1, including the hedging ratio, futures gains and losses, and whether margin risk was controllable amid wild swings in copper prices? Yunnan Copper responded: Hello, thank you for your interest in our company. The company's hedging is strictly for risk offsetting purposes and does not involve speculation. The company has established risk prevention and control mechanisms across multiple levels including systems, capital, and limits. Judging from hedging operations in recent years, the company has largely achieved its goals of risk management and stable operations.
2. The company invested in Liangshan Mining. AI construction has been quite hot recently. Although it is on the mining side, can the company's copper products be used in this AI construction? I am quite concerned about the connection between the two. My second concern is profitability. Will the company set up subsidiaries for deep processing products in the future? Third, I hope the company can recruit more sales talent and build a network platform like Wanhua Chemical's. Fourth, I hope the company can develop high-tech copper products, not limited to raw ore mining, to enhance competitive barriers and strengthen prospecting layout. Finally, I hope the company can strengthen dividends and executive shareholding increases. The company has not issued bonus shares or converted reserves for a long time. For shareholding increases, the 14-16 range is still quite good. I hope the company develops better and better. Yunnan Copper responded: Hello, the company's main product is copper cathode, which is a bulk standardized commodity. Thank you for your attention and suggestions. The company will continue to focus on its core business, strive to improve operating quality, and actively reward investors.
3. Are there any plans for buybacks or further shareholding increases by major shareholders? Yunnan Copper responded: Hello, thank you for your interest in our company. The company currently has no plans for share buybacks. Regarding shareholding increases by major shareholders, the company's indirect controlling shareholder Chalco, based on its confidence in the company's future development prospects and recognition of its long-term investment value, already increased its shareholding in 2024, accumulating an increase of 39,736,165 A shares, accounting for approximately 1.98% of the company's total issued share capital. If major shareholders have further plans to increase shareholdings in the future, the company will strictly fulfill its information disclosure obligations in accordance with relevant regulations.
4. What were the actual H1 production volumes of copper cathode, precious metals, and secondary copper, and will the full-year production targets remain unchanged? Yunnan Copper responded: Hello, thank you for your interest in our company. In H1 2026, the company produced 836,500 mt of copper cathode, 15.2 mt of gold, 554.88 mt of silver, and 2.8826 million mt of sulphuric acid. The company will continue to advance production and operations and strive to achieve all annual targets.
5. What drove the QoQ change in profit from Q1 to Q2? Was it processing fees, raw material structure, by-product prices, or inventory write-downs? Yunnan Copper responded: Thank you. Hello, thank you for your interest in our company. The QoQ profit growth in Q2 was driven by both volume and price, mainly due to persistently high copper and by-product sulphuric acid prices and higher sales, with profit up QoQ.
6. Question: What were the approximate external selling prices of the company's by-product sulphuric acid in July and August? Yunnan Copper responded: Hello, thank you for your interest in our company. As a by-product of copper smelting, sulphuric acid's selling price is affected by multiple factors including regional supply and demand, transportation conditions, and industry prosperity. In terms of selling prices, the company closely follows market changes and flexibly adjusts its sales strategy.
7. What were the YoY changes in H1 attributable net profit and recurring net profit, and how much did volume, copper prices, TCs, and by-products each contribute? What was the core reason for the QoQ change in Q2? Yunnan Copper responded: Hello, thank you for your interest in our company. In H1 2026, the company achieved attributable net profit of 1.897 billion yuan, up 29.05% YoY; recurring net profit of 1.82 billion yuan, up 52.94% YoY, mainly due to higher copper and by-product sulphuric acid prices. The QoQ profit growth in Q2 was driven by both volume and price, mainly due to persistently high copper and by-product sulphuric acid prices and higher sales, with profit up QoQ.
8. With copper concentrate TCs persistently low, what is the company's procurement mix between long-term contracts and spot ore, how are H2 TC negotiations going, and will the company respond to smelting-side pressure through maintenance or production schedule adjustments? Yunnan Copper responded: Hello, thank you for your interest in our company. The company reasonably arranges maintenance at each smelting site in line with its annual production plan to ensure stable and orderly production. At the same time, it offsets downward pressure on TCs through combined measures such as cost reduction and efficiency improvement and boosting by-product income from sulphuric acid.
Yunnan Copper's semi-annual report shows: The company firmly established market entity awareness, strengthened its extreme operations system, comprehensively advanced the "Three-Year Cost Reduction 3.0" initiative, continued to deepen benchmarking and list-based management, and made every effort to overcome difficulties such as persistently low TCs and tight raw material supply, effectively achieving all work targets. In H1, it achieved operating revenue of 111.549 billion yuan, up 32.76% YoY; total profit of 2.661 billion yuan, up 21.45% YoY; and attributable net profit of 1.897 billion yuan, up 29.05% YoY, with operating quality and efficiency steadily improving. 1. Production and operations made steady progress with overall improvement in core indicators. First, product output exceeded schedule. In H1, the company produced 836,500 mt of copper cathode, 15.2 mt of gold, 554.88 mt of silver, and 2.8826 million mt of sulphuric acid, with output of major products all meeting schedule targets. Second, cost control achieved tangible results. The "Four-Four Cost Reduction Method" was fully promoted and applied, comprehensive copper processing costs improved YoY, beneficiation recovery rates and total copper smelting recovery rates exceeded annual targets, and comprehensive energy consumption in copper smelting declined compared with plan. 2. Project construction and operational management advanced in coordination, and the development foundation continued to be consolidated. The company continued to strengthen basic management and lean management, with operating quality continuously improving. In terms of key project construction, the Hongnipo copper mine mining and beneficiation project achieved 85.68% overall progress, providing strong support for the company's future development; the Liangshan Copper cathode refining project began electrolysis system power-on commissioning in March and was fully operational in May. 3. Innovation-driven efforts advanced in depth, and digital-intelligent transformation accelerated breakthroughs.
Regarding its main business, Yunnan Copper introduced: The company's main business covers copper exploration, mining and beneficiation, and smelting; extraction and processing of precious metals and rare and dispersed metals; sulphur chemicals; and trade. It is an important production site for copper, gold, silver, and sulphur chemicals in China, and has established a relatively complete industry chain in copper and related non-ferrous metals. It is a copper enterprise with deep industry heritage. The company's main products include copper cathode, gold, silver, and industrial sulphuric acid. Minor metal products include molybdenum, platinum, palladium, selenium, tellurium, and rhenium, among which copper cathode capacity is 1.725 million mt/year. The company's main products are all produced according to international standards and operated under the ISO9001 quality management system, ensuring that products are under strict quality control throughout the entire process. Among them, the core product copper cathode is widely used in electrical, light industry, machinery manufacturing, construction, national defense, and other fields; gold and silver are used in finance, jewelry, electronic materials, and other fields; industrial sulphuric acid can be used as a raw material for chemical products and is also applied in other sectors of the national economy. The company's "Tiefeng Brand" copper cathode is registered on the Shanghai Futures Exchange and the London Metal Exchange; "Tiefeng Brand" gold is registered on the Shanghai Gold Exchange (SGE) and the Shanghai Futures Exchange; "Tiefeng Brand" silver is registered on the Shanghai Gold Exchange (SGE), the Shanghai Futures Exchange, and the London Bullion Market Association (LBMA).
Regarding the company's future development outlook, Yunnan Copper previously stated in its 2025 annual report: Yunnan Copper adheres to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide, fully implements the spirit of the 20th National Congress of the Communist Party of China and all plenary sessions of the 20th Central Committee, and upholds and strengthens the Party's overall leadership. It actively serves major national strategies, adheres to promoting high-quality development as its theme, fully, accurately, and comprehensively implements the new development philosophy, continuously enhances core functions and improves core competitiveness, and better plays its role in scientific and technological innovation, industrial control, and safety support in building a modern industrial system and constructing a new development pattern. It highlights the "Two Guarantees" (guarantee of important mineral resources and guarantee of important metal materials), "Two Innovations" (scientific and technological innovation and management innovation), "Two Constructions" (strengthening Party building, especially the building of the cadre team), and "Three Unswerving Commitments" (unswervingly accelerating structural adjustment, unswervingly deepening enterprise reform, and unswervingly pursuing international operations and intensifying the "going global" efforts). It focuses on "digital-intelligent transformation, expanding resources, refining mines, optimizing smelting, solidifying secondary copper, and refining rare and dispersed metals," accelerating the construction of a world-class excellent copper company, and continuously opening up new prospects for Yunnan Copper's high-quality development.
A research report from Guosen Securities commenting on Yunnan Copper's semi-annual report shows: In terms of revenue and profit structure, copper cathode revenue was 79.5 billion yuan, accounting for 71% of total revenue; precious metals revenue was 25.4 billion yuan, accounting for 23% of total revenue; sulphuric acid revenue was 2.9 billion yuan, accounting for only 2.6% of revenue, but with a gross margin as high as 85%. Benefiting from higher sulphuric acid prices, sulphuric acid business gross profit in H1 2026 was 2.5 billion yuan, while the core copper cathode business was 1.6 billion yuan. At year-end 2025, the company completed the acquisition of a 40% stake in Liangshan Mining, which was consolidated into the company's financial statements. As of end-June, the company held 1.038 billion mt of copper ore resources, 4.43 million mt of copper metal content, with an average grade of 0.43%. Mining segment: The Hongnipo copper mine mining and beneficiation project of Liangshan Mining is progressing smoothly. The main mine, Pulang Copper Mine, has costs above 40,000 yuan/mt. Other small mines are moderately profitable but small in scale, resulting in slightly lower profit volume for the mining segment. Smelting segment: Southwest Copper, Chifeng Yuntong, Southeast Copper, Dianzhong Nonferrous, and Liangshan Copper smelting sites are producing stably, with net margins of each smelting subsidiary at around 1.3%, which is a normal industry level. The smelting segment accounts for about 50% of the company's profit. Leveraging the high prosperity cycle of the copper industry in recent years, the company has improved its asset quality. During the reporting period, it consolidated the high-quality asset Liangshan Mining. As the only listed copper platform under Chalco, injection of other high-quality assets from major shareholders is expected. Although the copper smelting business is under short-term pressure, the state has issued documents strictly controlling new copper smelting capacity, and the company benefits from global copper smelting capacity rationalization, with a favorable long-term industry outlook. Risk warnings: downside risk in copper prices and downside risk in copper concentrate TCs.
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