Western Mining's 2025 Annual Report Analysis: Revenue up 23% to 61.69B yuan; net profit attributable to parent company increased 24% to 3.64B yuan

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Operating Revenue: Both Volume and Price Grow Together, Hitting a Record High

In 2025, Western Mining achieved operating revenue of 61.687 billion yuan, a year-on-year increase of 23%, with revenue scale reaching a record high. In terms of revenue structure, nonferrous metal mining, selection, smelting, and processing is the core pillar, generating revenue of 52.5187 billion yuan, accounting for 85.14% of total operating revenue; metal trading revenue was 8.978 billion yuan, accounting for 14.55%; and financial services and other revenue accounted for less than 1%.

By product, copper-category products contributed 43.24 billion yuan in revenue, up 13.05% year over year, serving as the core driver of revenue growth. On the one hand, it benefited from a significant rise in the 2025 copper price (average annual price 83012 yuan/ton, up 8.8% year over year); on the other hand, the company’s refined copper smelting production increased 26.7% year over year to 3.342 million tons. Gold ingot revenue was 3.847 billion yuan, surging 2319.98% year over year, mainly driven by simultaneous growth in both production volume and price. Lead-category products generated 2.37 billion yuan in revenue, up 146.48% year over year; the company’s lead from mined ores production increased 16.73% year over year to 0.630 million tons.

• | Gold price +42.2% | | Lead-category products | 23.70 | 146.48% | Lead from mined ores +16.73% | Lead price -4.4% | | Zinc-category products | 38.25 | 24.55% | Lead from mined zinc +20.28% | Zinc price -3.7% |

Profitability Indicators: Growth in Net Profit Attributable to Shareholders Outpaces Revenue

Net Profit

In 2025, the company realized net profit of 6.152 billion yuan, up 16% year over year. The growth rate was lower than the revenue growth rate, mainly due to a decline in gross margins of some products and a significant increase in R&D expenses, which pulled down the profit growth rate. By business segment, the gross margin of the nonferrous metal mining, selection, smelting, and processing segment was 22.13%, down 3.32 percentage points year over year, mainly because the gross margins of lead and zinc products fell due to lower prices. The gross margin of the metal trading business is low, at only 0.6%, but the increase in its revenue share to some extent reduced overall profitability.

Net Profit Attributable to Shareholders and Non-recurring Profit Excluding

Net profit attributable to shareholders of the parent company was 3.643 billion yuan, up 24% year over year. The growth rate was higher than both net profit and revenue growth rates. This was mainly because the profit or loss attributable to non-controlling interests increased 12.3% year over year, slower than the growth rate of net profit attributable to shareholders. Net profit excluding non-recurring gains and losses was 3.618 billion yuan, up 23% year over year, basically in line with the growth rate of net profit attributable to shareholders. This indicates that the company’s profit growth mainly came from its core business, and non-recurring items had a small impact. In 2025, the company’s non-recurring gains and losses amounted to 24.46 million yuan, accounting for only 0.67% of net profit attributable to shareholders.

Earnings Per Share

Basic earnings per share was 1.53 yuan/share, up 24% year over year; diluted excluding non-recurring gains and losses was 1.52 yuan/share, up 23% year over year. The growth rates of the two indicators fully match the growth rates of net profit attributable to shareholders and net profit excluding non-recurring items, reflecting that the company’s profit growth directly translated into the EPS level, with shareholders’ per-share returns rising in step.

Expenses: R&D Expenses Surge 74%, Becoming the Biggest Variable

In 2025, the company’s total period expenses were 2.927 billion yuan, up 30.5% year over year, with a growth rate higher than that of revenue; among them, the core reason was a substantial increase in R&D expenses.

Selling Expenses

Selling expenses were 33.07 million yuan, up 2% year over year, with a growth rate far lower than the revenue growth rate. This was mainly because the company optimized its sales workflow and improved sales efficiency. Core expenses such as employee costs, depreciation and amortization, etc., remained stable. The selling expense ratio was 0.05%, slightly down year over year, and the effectiveness of control on the sales side was evident.

Administrative Expenses

Administrative expenses were 1.2014 billion yuan, up 17% year over year, mainly due to employee costs increasing 11.6% year over year to 642 million yuan, as well as increases in expenses such as consulting and audit fees, and resource compensation fees. The administrative expense ratio was 1.95%, down 0.1 percentage points year over year. Although the growth rate of administrative expenses was higher than that of revenue, the expense ratio still remained steady-to-declining, and management effectiveness continued to improve.

Financial Expenses

Financial expenses were 609 million yuan, down 20% year over year. This was mainly because interest expense decreased 14.5% year over year to 560 million yuan, while the amount of interest capitalized decreased 81.1% year over year to 5.69 million yuan, and the year-over-year loss from foreign exchange gains and losses narrowed by 75.2%. The financial expense ratio was 0.99%, down 0.5 percentage points year over year, clearly easing pressure from financing costs.

Research and Development (R&D) Expenses

R&D expenses were 1.0833 billion yuan, up 74% year over year. The R&D expense ratio was 1.76%, up 0.5 percentage points year over year. The company capitalizes all its full-year R&D spending as expenses. It was mainly used for projects such as improving and upgrading comprehensive utilization technologies for complex and hard-to-treat ores from the Yulong copper mine, efficient utilization of multi-metal resources, and high-value recovery of rare precious metals. The number of R&D projects increased 40% year over year, and R&D investment intensity increased significantly, laying a foundation for the company’s long-term technological competitiveness.

R&D Personnel: R&D Team Size Expands Steadily

In 2025, the company had 820 R&D personnel, up 15.3% year over year. R&D personnel accounted for 12.42% of the company’s total headcount, up 1.2 percentage points year over year. In terms of educational background, the share of R&D personnel with undergraduate degrees or above exceeded 60%, including 12% with master’s degrees or above, indicating that the overall educational level of the R&D team is high. In terms of age structure, the share of R&D personnel aged 30–45 exceeded 70%, forming an R&D echelon centered on middle-aged and young professionals. The expansion of the R&D team and optimization of its structure provide talent support for the company to continuously increase R&D investment and overcome technical bottlenecks.

Cash Flow: Operating Cash Flow Hits a Record High; Financing Cash Flow Turns Positive

Cash Flow from Operating Activities

Net cash flow from operating activities was 10.211 billion yuan, up 24% year over year and reaching a record high. The main drivers were the expansion of the company’s revenue scale, improvements in profitability, and notable effectiveness in accounts receivable management. The balance of accounts receivable decreased 18.1% year over year to 1.039 billion yuan. The ratio of net cash inflow from operating activities to net profit was 1.66, up 0.13 year over year. The cash content of profits increased further, and the company’s ability to “generate cash from its core business” continued to strengthen.

Cash Flow from Investing Activities

Net cash flow from investing activities was -2.871 billion yuan, with a year-over-year reduction in losses of 808 million yuan. This was mainly because the amount of futures margin recovered increased 2.15 billion yuan year over year to 6 billion yuan, while cash outflows for purchase and construction of fixed assets decreased 7.5% year over year to 3.043 billion yuan. During the full year, the company invested 1.6 billion yuan to help major projects land. Projects such as the Yulong copper mine’s comprehensive utilization technology improvement and upgrade for complex and hard-to-treat ores, and the Yulong mining (or Shuangli Mining) No. 2 iron mine’s beneficiation system upgrade and improvement project, proceeded smoothly to production, laying the foundation for future capacity release.

Cash Flow from Financing Activities

Net cash flow from financing activities was -2.371 billion yuan, with a year-over-year reduction in losses of 3.528 billion yuan. This was mainly because newly added borrowings increased 4.83 billion yuan year over year to 12.043 billion yuan during the period, while cash outflows for repayment of debts decreased 0.01% year over year to 9.085 billion yuan. In 2025, the company issued 2 billion yuan in technology innovation corporate bonds, optimizing its debt structure and further strengthening its financing capability.

Potential Risks

Risk of Fluctuations in Product Prices

The prices of the company’s main products—copper, lead, and zinc—fluctuate significantly due to factors such as the global economic situation, supply and demand relationships, and geopolitical conditions. Copper price increases in 2025 drove growth in the company’s earnings. However, if the global economy’s recovery in 2026 falls short of expectations, or if additional copper supply capacity is released, copper prices may decline, which would adversely affect the company’s profitability. Lead and zinc prices have already fallen in 2025; if demand weakens in 2026, prices may face continued pressure.

Risk of Safe Production

Mining and smelting businesses are high-risk industries and may face risks such as industrial accidents, mine collapse, equipment failure, and more. Many of the company’s mines are located in high-altitude and complex geological regions, making safety production management difficult. If a safety accident occurs, the company would face multiple losses such as suspension of production, compensation, and regulatory penalties, affecting the stability of production and operations.

Risk in Estimation of Resource Reserves

The company’s mines’ estimated resource reserves are based on exploration technologies and limited exploration scope. If the actual resource reserves differ significantly from the estimation results, it will affect mine service life and capacity planning. For example, although the Yulong copper mine’s reserve increase achieved a breakthrough, some mines have already entered the later stage of their service life. If the search for additional deposits does not meet expectations, it will affect the company’s long-term self-sufficiency rate of resources.

Compensation for the Board and Senior Management: Core Executive Pay Linked to Performance

Chairman’s Pre-Tax Compensation

The chairman, Wang Haifeng, reported a total pre-tax compensation amount of 758.2 thousand yuan received from the company during the reporting period. His compensation consists of base pay, performance pay, and term incentives. It is linked to the company’s annual operating performance and the results of term assessments. In 2025, the company’s performance reached a record high, and the compensation of key executives also reflects their performance contributions accordingly.

General Manager’s Pre-Tax Compensation

The general manager, Zhou Huarong, had a total pre-tax compensation amount of 861.0 thousand yuan during the reporting period. In August 2025, he assumed the role of general manager, fully responsible for the company’s production and operations, and drove the steady growth of various business indicators. His compensation level matches the responsibilities of the position and performance contributions.

Vice General Managers’ Pre-Tax Compensation

Several vice general managers’ pre-tax compensation for the company ranges from 508.7 thousand yuan to 1,004.9 thousand yuan. Among them, Vice General Manager Jia Yanqiang’s pre-tax compensation is 1,004.9 thousand yuan. He is mainly responsible for operations of core mines such as the Yulong copper mine. In 2025, the Yulong copper mine’s production volume and profitability performance were outstanding, and the compensation reflects the value of his role and his performance contributions. The compensation for Vice General Managers Liu Yuan, Dong Qiaolong, etc., is in the 610–670 thousand yuan range and is linked to the performance assessment results for the businesses they oversee.

Chief Financial Officer’s Pre-Tax Compensation

The chief financial officer, Wang Wei, reported a total pre-tax compensation amount of 686.1 thousand yuan during the reporting period. He also concurrently serves as the secretary to the board and a vice general manager, responsible for the company’s financial management, information disclosure, and other work. In 2025, the company achieved notable results in controlling financial costs and managing cash flows, and the compensation reflects his overall fulfillment of duties.

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Responsible editor: Xiao Lang Express