300 tỷ lợi nhuận dự kiến, Lưu Dương Mộc Nghiệp dựa vào đâu?

21st Century Business Herald reporter  Dong Peng

The sell-side institutions have once again raised Luoyang Molybdenum’s profit growth forecast.

After the close of trading on March 30 in the A-share market, Luoyang Molybdenum held a performance briefing. The company’s newly appointed management team provided information on copper and gold production for 2026, as well as its M&A direction.

Subsequently, multiple sell-side institutions raised their 2026 earnings forecasts for the company to more than 30 billion yuan. Among them, the highest value of expected net profit is close to 37 billion yuan, while the lowest is also above 31 billion yuan.

It is worth noting that during 2024 and 2025, the company’s net profit growth rate was above 50%. By 2025, the profit base had already risen to 20.3 billion yuan. The difficulty of continuing to maintain growth of 50% or more is clearly much greater—so why are the above institutions still extremely confident in its growth?

Perhaps some answers can be found in the company’s annual report and performance briefing.

“Gold production will be included in 26 (on a consolidated basis). We expect production of 6 to 8 tons, and we will strive to achieve 8 tons. The copper production guidance is 7.6 to 8.2 million tons, which still represents a certain increase compared with 2025.” said Peng Xuhui, President of Luoyang Molybdenum.

In addition, following the company’s spending of 10 billion yuan to acquire a gold mine in 2025, Luoyang Molybdenum in 2026 may also not rule out initiating new resource M&A opportunities. Combined with cost-reduction support brought by scaling and improvements in recovery rates, the company’s overall profitability indeed has some room to improve.

Of course, the above are only forward-looking judgments based on known conditions. How the prices of metals such as copper and gold will trend later remains unknown, and sell-side earnings forecasts will also be continuously adjusted dynamically.

Gold mines consolidated; copper production ramped up

When commodity prices enter an upcycle, overall market activity in the industry will quickly increase. For example, in recent years, companies such as Zijin Mining and Daqing Mining have moved into the lithium sector.

In 2025, it was a big year for the gold industry. Many Chinese-funded enterprises, including Luoyang Molybdenum, announced acquisitions of overseas gold mines and other assets.

In that same year, in April and December, Luoyang Molybdenum spent about 2.98 billion yuan and 7.17 billion, respectively, to acquire gold asset packages including Ecuador’s Cangrejos gold mine and Brazil’s Aurizona gold mine.

Among them, the Brazil gold asset package includes 100% interests in the Aurizona gold mine, the RDM gold mine, and the Bahia integrated mining area. This project was already completed for delivery in January of this year. Ecuador’s Odín Mining is still in the construction phase and plans to be completed and commence production in 2029.

Therefore, the above Brazil gold mine projects in the consolidated financial statements will become the company’s currently most certain incremental projects. In terms of production guidance, the company’s annual report states that in 2026 it plans to produce 6–8 tons of gold.

“(The company) will tap potential to improve efficiency and strive to achieve the production target of 8 tons.” Peng Xuhui said at the performance briefing held yesterday.

If calculated based on the latest London spot gold price, 8 tons of gold is worth 8 billion yuan. Most of this will be converted into an incremental revenue contribution for Luoyang Molybdenum.

Meanwhile, among peer companies that have already disclosed annual reports, their gross profit margins for gold in mining are generally above 50%, and some companies even reach 80%. The above Brazil gold mines are also expected to bring the company incremental profit of several billions of yuan.

For the copper segment, which contributes most of Luoyang Molybdenum’s profits, in 2026 there is no clear plan for新增 capacity deployment. One of the “Twin Stars” projects, the KFM Phase II, needs to wait until 2027 to commence production. However, based on its existing capacity, the company still has room to tap potential.

According to annual report data, in 2025 Luoyang Molybdenum’s copper production was 741,000 tons, ranking steadily among the global top ten.

For its existing main mines, the company’s vice president Chen Xingyao said that “the daily processing volume of TFM used to be 63,000 tons; now, through tapping potential in mining and processing, it has already been increased to 80,000 tons.”

In 2026, Luoyang Molybdenum also plans to further increase copper production to 7.6 to 8.2 million tons. Although the production growth rate is not as high as in the past few years, at least there is still the possibility of an increase of around 500,000 tons.

“The company started with minor metals, and it comes with a minor-metals gene. Last year it also benefited from minor metals, which is one of the company’s long-term development cornerstones.” the company’s chairman Liu Jianfeng said, adding that in 2025 the company’s businesses such as molybdenum and tungsten contributed solid financial returns.

He pointed out that in the future, besides anchoring the “copper-gold strategy,” the company will also extend basic technologies into the minor metals sector, fully tapping the value of associated resources, and will look for independent minor-metals mine projects when appropriate.

The above potential external acquisitions are also expected to bring new increments in performance.

In addition, judging from Luoyang Molybdenum’s current profit structure, in 2025 gross profits of its molybdenum, tungsten, and cobalt products reached 8 billion yuan, which is the second-largest source of profit after the company’s copper products.

In 2026, the prices of these minor metals are all clearly higher than in the same period of 2025, especially the rise in tungsten concentrate, which is the most prominent.

According to Antaike data, before 2025, black tungsten concentrate (65%, domestic) had long fluctuated around the 150,000 yuan/ton level. After breaking through the prior high in the second half of 2025, it saw a straight-up surge in the fourth quarter of 2025 and the first quarter of 2026.

Since mid-March this year, it has also been running continuously above 1 million yuan/ton. Therefore, in 2026, the profitability of Luoyang Molybdenum’s minor-metals segment is also expected to improve significantly.

Together with support from copper and gold prices, which are significantly higher than in the same period of 2025 and still at historical highs, the company’s revenue in 2026 indeed has good prospects to continue benefiting from the dual drivers of both volume and price.

“622 model” and platform-based construction

While driving external resource M&A and expansion of existing projects to grow revenue scale, Luoyang Molybdenum’s new management team is also seeking breakthroughs on the cost side.

At the performance briefing, Chen Xingyao cited how, after the company increased its Congo gold production, the cost reduction effects from the scale effect and how improvements in recovery rates helped on the cost side.

According to the introduction, in the fourth quarter, TFM’s full-concentration copper selection and smelting recovery rate, equipment operating rate, and the volume of raw ore processed exceeded the calendar progress. KFM builds an ore characterization database and a ore blending model. Grinding mill throughput efficiency year-on-year improved by more than 30%. For Luoyang Molybdenum’s Brazil niobium processing segment, the recovery rates of its two concentrators increased by about two percentage points compared with the previous year. The recovery rate of Santo Zhuang also reached a record high.

Annual report data also show that in 2025 Luoyang Molybdenum’s operating costs decreased by 11.56%, significantly higher than the 2.98% decrease in revenue over the same period. Meanwhile, for the mining and processing segment, which is the company’s most important profit source, the increase in operating costs was also far smaller than the increase in revenue.

“In mining competition, the essence is competition of costs—an exchange of system capabilities built on resource endowment.” the company’s board of directors stated in its annual report.

In the company’s view, there are three factors that determine whether its costs are high or low.

First, natural resource endowment and industrial mining conditions—these are the underlying, inherent, and unchangeable prerequisites. Second, how to build an efficient, low-cost management team. Third, since mining is a relatively closed industry, there is the possibility of using technological means to reduce costs and improve efficiency.

In its 2025 annual report, Luoyang Molybdenum also first systematically explained its “622 model” to the public.

That is: 60% of the cost advantage is determined by resource endowment, and strategic acquisitions determine the company’s lifeline and genes. 20% depends on the project planning and construction level, to achieve the optimal cost across the full lifecycle. The remaining 20% is determined by daily operational management capabilities, meaning to leverage the comparative advantages of Chinese enterprises.

Over the past decade, Luoyang Molybdenum has built the resource moat accounting for 60% of the above cost model by precisely capturing multiple world-class assets.

However, if the company wants to transform its resource advantages into capacity advantages and cost advantages, and form a systematic improvement in comprehensive competitiveness, it needs to start with the two 20% components: “planning and construction” and “daily operations.”

For example, standardization, process-based operation, and intelligence should be applied throughout all stages of project planning, construction, and operations; and applied across the entire value chain from exploration, mining, beneficiation, smelting, refining, to trading.

This is not empty talk or stock phrases. For instance, the Zijin Mining subsidiary’s Tibet Julong copper mine highly depends on early-stage project planning and late-stage operational capability, which clearly not all mining companies can achieve.

From the above perspective, Luoyang Molybdenum is also seeking to build, through platform-based construction, a standardized and output-capable platform management and control system similar to Zijin Mining’s “Five Rings Convergence.”

In 2026, relying on the “622 model” to enhance resource scale, and on the accumulation of global “platform capabilities,” Luoyang Molybdenum has also positioned these efforts alongside its “copper-gold dual-pole” strategy.

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