BofA-Zijin Mining(H) 2Q25 NPAT slightly beat；better copper gold price with higher gold volume-20250714

2Q25 NPAT at RMB13bn, +27%qoq, slightly beat

Zijin issued a positive profit alert for 1H25 with NPAT at RMB23.2bn, +54% yoy,implying 2Q25 NPAT at RMB13bn, +48% yoy/+27% qoq, slightly beating ourexpectation. We believe the earning growth is driven by 1) higher copper/gold prices:2Q25 copper price seen at US$9,538/t, -2%yoy/+2%qoq; gold price at US$3,289/oz,+41%yoy/+15%qoq; 2) higher copper/gold volume: The company announced 1H25 minedgold output at 570kt and gold output at 41t, achieving 50%/48% of its FY25 copper/goldvolume guidance. It implied 2Q25 mined copper output at 282kt, +10% yoy yet -2% qoq,mainly due to Kakula mine suspension, and mined gold output at 22t, +18%yoy/+15%qoq, contributed by the consolidation of Akyem gold mine, in our view. 3)flattish cost: According to management, 2Q25 copper/gold costs are largely flattish qoq.The company also reported mined Zinc (Lead) output at 200kt, -9% yoy, mined silveroutput at 223t, +6% yoy, and lithium carbonate output at 7,315t, +2961% yoy, in 1H25.

Lower FY25 copper volume guidance yet gold outputremain solid

Looking forward, due to the Kakula mine suspension, Ivanhoe has lower FY25e Kamoa-Kakula mine guidance from 520-580kt to 370-420kt. Zijin also lowered down its coppervolume expectation with total copper production in 2025 to range between 1.07mnt and1.08mnt (vs. the original plan of 1.15mnt), broadly in line with 2024 levels (see details:Tour takeaways: Anti-involution impact on cement/steel; aluminum/copper still tight.).Yet, gold volume is estimated to meet guidance with the consolidation of Akyem goldmine and continuous M&A. As for copper/gold prices, though LME slightly dropped afterPresident Trump announced 50% tariff on copper import, we believe copper price willremain solid with tight supply and demand growth in 2H25 driven by grid investment.Our global commodity team estimates FY25e copper/gold prices at US$9,557/t andUS$3,356/oz, +4%yoy/+40%yoy, respectively. Maintain Buy on Zijin, given gold volumegrowth, promising gold/copper price and solid cost control measures.