Jiangxi Copper 2025 Annual Report Analysis: Net Operating Cash Flow Plummets by 384.78%, R&D Expenses Increase by 26.56%

Core Profitability Indicators Explained

Operating Revenue

In 2025, the company generated operating revenue of RMB 544.623 billion, up 5.42% year over year. By product, cathode copper contributed revenue of RMB 240.926 billion, which remains the core source of revenue; gold revenue was RMB 94.548 billion, up 43.48% year over year, becoming an important driver of revenue growth; chemical products (sulfuric acid and sulfur concentrate) generated RMB 5.533 billion, up 95.65% year over year, showing strong performance. However, revenue from copper rod wire was RMB 127.669 billion, down 7.52% year over year, indicating mounting pressure on growth in the traditional copper processing segment.

Net Profit and Profit After Non-Recurring Items

Net profit attributable to shareholders of listed companies was RMB 7.130 billion, up 2.41% year over year; profit after non-recurring items was RMB 9.148 billion, up 11.30% year over year. The growth rate of profit after non-recurring items was significantly higher than that of net profit, mainly because non-recurring gains and losses weighed on results. Among non-recurring gains and losses, profit or loss from disposal of non-current assets was RMB 0.977 billion, and government grants recognized in current profit or loss were RMB 0.561 billion, but losses from fair value changes of derivative financial instruments that did not apply hedge accounting were RMB 4.565 billion, which substantially dragged down net profit.

Earnings Per Share

Basic earnings per share were RMB 2.07 per share, up 2.99% year over year; earnings per share after non-recurring items were RMB 2.65 per share, up 11.34% year over year. This is consistent with the growth trend of profit after non-recurring items, reflecting an improvement in the company’s core business profitability.

Expense Control and R&D Investment

Overall Expense Situation

In 2025, total period expenses amounted to RMB 57.126 billion, up 11.85% year over year. The growth rate was higher than operating revenue, and pressure on the expense side became evident.

Breakdown of Expenses

• Selling expenses: RMB 0.387 billion, down 5.95% year over year, mainly due to a decrease in sales commissions—from RMB 0.815 billion last year to RMB 0.372 billion—showing significant results in expense control.
• Administrative expenses: RMB 3.001 billion, up 5.08% year over year, mainly due to increases in wages and benefits and amortization of intangible assets, with the expansion of scale leading to higher management costs.
• Finance expenses: RMB 0.909 billion, up 14.94% year over year, mainly because interest income decreased while interest expenses related to borrowings and gold leasing, as well as interest on bill discounting, increased, resulting in higher financing costs.
• R&D expenses: RMB 1.415 billion, up 26.56% year over year. The growth rate was the highest among all expense categories, mainly due to an increase in materials used for R&D activities.

R&D Personnel Profile

The company had 2,491 R&D personnel, accounting for 9.32% of the total workforce. By educational background, there were 253 PhD graduate students and 506 master’s graduate students, totaling 30.47% of R&D personnel, indicating an ample reserve of high-education R&D talent. By age structure, there were 797 R&D personnel under 30 years old, representing 32.00%, showing a clear trend toward a younger R&D team, providing talent support for technological innovation.

In-Depth Cash Flow Analysis

Cash Flow from Operating Activities

Cash flow from operating activities shifted from a net inflow of RMB 2.428 billion in the prior year to a net outflow of RMB 6.914 billion, a sharp year-over-year decline of 384.78%, mainly because rising metal prices such as copper led to increased inventory purchases, causing a significant rise in working-capital tied up in inventories. At the end of 2025, the inventory balance was RMB 68.188 billion, up 52.02%, consuming a large amount of operating capital.

Cash Flow from Investing Activities

Cash flow from investing activities improved markedly year over year, moving from a net outflow of RMB 12.223 billion in the prior year to a net inflow of RMB 3.208 billion. This was mainly due to an increase in the redemption of wealth management products; in 2025, cash received from investments redeemed was RMB 30.104 billion, up 39.20% year over year.

Cash Flow from Financing Activities

Net cash flow from financing activities decreased from RMB 5.733 billion to RMB 3.302 billion, down 42.39% year over year. This was mainly because cash received from obtaining borrowings decreased. In 2025, cash received from borrowings was RMB 99.466 billion, down 5.27% year over year.

Risk Factor Disclosures

2. Market price fluctuation risk: The prices of products such as copper and gold are influenced by factors including macroeconomic conditions and supply-demand relationships, leading to significant volatility. Although copper prices in 2025 remained generally strong with wide-ranging fluctuations, uncertainties such as adjustments to monetary policy by the Federal Reserve and the global economic recovery pace may still cause substantial price fluctuations, affecting the company’s profitability.
3. Raw material supply risk: In 2025, the global copper mine production growth rate was lower than expected. Copper concentrate processing fees (TC) remained in a negative range for the long term. Tight supply at the mine end was transmitted to the smelting end. If raw material supply becomes even tighter in the future, it will increase the company’s production costs.
4. Environmental compliance risk: The company’s production process involves the selection and extraction of non-ferrous metals and smelting, with strict environmental requirements. If environmental standards are raised in the future, the company will need to increase environmental protection investment, which will increase operating costs; if environmental measures are not adequately implemented, it may also face penalties.
5. Geopolitical risk: Overseas projects such as the Aynak copper mine in Afghanistan are subject to uncertainties in project progress and asset security due to geopolitical conflicts.

Executive Compensation

• Chairman Zheng Gaoqing: In the reporting period, the total pre-tax remuneration received from the company was RMB 1.2171 million. This places him at a relatively high level among executive compensations, matching his role and responsibilities as the company’s person in charge.
• General Manager Zhou Shaobing: The total pre-tax remuneration was also RMB 1.2171 million, equal to that of the chairman, reflecting the company’s incentives for key management personnel responsible for operations.
• Vice General Manager: Dongyang Tu—pre-tax remuneration of RMB 0.8934 million; Hanjun Xia—RMB 0.6223 million; Bing Zhou—RMB 0.4356 million; Jun Wu—RMB 0.0622 million. Since appointment durations differ, compensation varies accordingly, and overall compensation matches job responsibilities and contributions.
• Chief Financial Officer Yu Minxin: Pre-tax remuneration was RMB 0.7467 million, consistent with her pay positioning as a key finance management professional.

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