Chifeng Gold 2025 Annual Report Analysis: Net profit attributable to parent company increased by 74.7% to 3.082 billion, operating cash flow rose by 69.97% to 5.556 billion

Core Profitability Indicator Interpretation

Operating Revenue: Global Gold Prices Rising Drive a 40.03% Revenue Increase

In 2025, the company achieved operating revenue of 12.639 billion yuan, up 40.03% year over year. By product, the gold business contributed revenue of 11.339 billion yuan, up 42.12%, serving as the core driver of the revenue growth. Electrolytic copper revenue was 506 million yuan, up 24.11%; copper concentrate revenue was 72.19 million yuan, up significantly by 254.58%. By region, overseas revenue accounted for 71.20%, reaching 8.988 billion yuan, up 44.08% year over year; domestic revenue was 3.635 billion yuan, up 32.77%. The steady operations of overseas mines became an important growth engine.

Net Profit Attributable to Shareholders: Hits a Record High, Up 74.70% YoY

During the reporting period, net profit attributable to shareholders of listed companies was 3.082 billion yuan, up 74.70% year over year. This was mainly due to the continued rise in global gold prices, together with notably effective cost control by the company. The gross margin of the gold business was 58.51%, up 11.55 percentage points year over year. However, the gross margin of the electrolytic copper business was -30.90%, down significantly by 41.43 percentage points year over year, mainly due to an 81.57% increase in costs year over year.

Net Profit After Non-Recurring Items: Up 79.87%, Strong Operating Profitability

Net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 3.058 billion yuan, up 79.87% year over year. This growth rate is higher than that of net profit attributable to shareholders, indicating the company’s operating business has strong earnings resilience and non-recurring gains and losses have a limited impact on performance. Non-recurring gains and losses mainly include government subsidies of 3.1639 million yuan, fair value changes of financial assets and disposal gains of 42.6696 million yuan, among others, totaling an impact on net profit of 24.0953 million yuan.

Earnings per Share: Basic EPS of 1.69 yuan, Up 57.94% YoY

Basic earnings per share (EPS) was 1.69 yuan per share, up 57.94% year over year; EPS after non-recurring items was 1.68 yuan per share, up 63.11%. The growth in EPS mainly stems from a significant increase in net profit. Meanwhile, after the company’s issuance of H shares, total share capital increased to 1.900 billion shares, which diluted EPS to some extent. However, the increase in net profit substantially exceeded the increase in share capital, ultimately driving a notable rise in EPS.

Expense Structure Analysis

Period Expenses: Total Expenses Slightly Up, Financial Expenses Sharply Reduced

In 2025, total period expenses were 798 million yuan, up slightly by 0.36% year over year. Among them, the decline in financial expenses was the most pronounced, while selling expenses, administrative expenses, and R&D expenses all rose to varying degrees.

Selling Expenses: Down 27.55% to 2.527 million yuan

Selling expenses decreased by 27.55% year over year, mainly because the company optimized its sales process and reduced unnecessary selling expenditures. The company’s sales channels for key products such as gold have remained stable, and its collaboration with core customers is close and ongoing; thus, the scale of selling expenses has continued to be maintained at a low level.

Administrative Expenses: Up 18.67% to 584.21 million yuan

Administrative expenses increased by 18.67% year over year, mainly due to a year-over-year rise in the group’s labor costs and professional consulting service fees. During the reporting period, the company advanced international operations and optimized its organizational structure. At the same time, after listing in Hong Kong, compliance management costs increased somewhat, driving the rise in administrative expenses.

Financial Expenses: Down 68.96% to 48.2274 million yuan

Financial expenses fell sharply by 68.96% year over year, mainly because operating cash flow was sufficient, leading the company to repay part of bank loans ahead of schedule, which correspondingly reduced interest expenses. At the same time, the increase in own funds brought about a corresponding rise in interest income. As of the end of the reporting period, the company’s interest-bearing debt balance was approximately 878 million yuan, down 67.45% from the beginning of the year. The asset-liability ratio was 33.91%, down 13.34 percentage points from the beginning of the year, and the company’s financial structure continued to improve.

R&D Expenses: Up 84.30% to 117.242 million yuan

R&D expenses increased by 84.30% year over year, mainly because Johor? Mining? (Jilong Mining), Wulong Mining, and Wanxiang Mining increased their R&D investment, focusing on core areas such as beneficiation technology upgrades and exploration for increased reserves, laying the groundwork for long-term capacity improvement and cost control.

R&D Personnel and Resource Reserves

R&D Personnel: Professional Teams Support Technological Innovation

The company did not disclose the number and structure of its R&D personnel separately, but based on the growth in R&D expenses and the progress of projects, the company places emphasis on technological research and development. It builds professional R&D teams through cooperation with research institutions and internal cultivation. It has achieved technological breakthroughs in areas such as gold beneficiation and utilization of low-grade ore, improving the overall utilization rate of resources.

Mineral Resource Reserves: Gold Reserves Up 31%, Copper Reserves Up 179%

During the reporting period, the company’s mineral resource reserves grew significantly. Gold resource reserves increased from 390 tons to 512 tons, up 31% year over year. Copper resource reserves increased from 87,000 tons to 244,000 tons, up 179% year over year. Among them, gold resource reserves in Ghana Wasa increased by 41% year over year; copper resource reserves in Laos Wanxiang Mining increased by 179% year over year. The incremental resource-equivalent of the newly added SND gold and copper mine project was 106.9 tons, providing ample assurance for future production growth.

Cash Flow Analysis

Operating Cash Flow: Up 69.97% YoY to 5.556 billion yuan

Net cash flow from operating activities was 5.556 billion yuan, up 69.97% year over year. This was mainly due to higher gold selling prices, which led to a substantial increase in cash received from selling goods. At the same time, effective cost control results emerged, and the quality of operating cash flow continued to improve.

Investing Cash Flow: Net Outflow of 2.310 billion yuan, Focused on Expansion and Exploration

Net cash flow from investing activities was -2.310 billion yuan, compared with a net outflow of 958 million yuan in the same period last year. This was mainly because the capital expenditures of mines increased year over year during the current period. In the prior period, approximately 453 million yuan of investment proceeds were recovered from disposing of equity investments; there was no such item in the current period. During the reporting period, the company’s mine capacity expansion and exploration projects in both domestic and overseas operations progressed in an orderly manner, laying the foundation for long-term capacity expansion.

Financing Cash Flow: Net Inflow of 972 million yuan, Fundraising from Listing in Hong Kong

Net cash flow from financing activities was 972 million yuan, compared with a net outflow of 1.097 billion yuan in the same period last year. This was mainly because the net proceeds raised from the company’s listing in Hong Kong this period were approximately HK$3.1 billion, while net debt decreased significantly year over year. The listing in Hong Kong broadened the company’s international financing channels, providing funding support for global resource M&A and the exploration and development of core mines.

Risk Factor Disclosures

Geopolitical and Policy Risks

Geopolitical conflicts are frequent globally, and resource nationalism is on the rise. Some countries’ policies and legal frameworks, tax regimes, and mining right management involve uncertainties, which may affect overseas project operations, cost control, and M&A of new projects. The company will strengthen research on overseas policies, deepen cooperation with local governments and communities, and enhance its capability for international operations.

Risk of Metal Price Volatility

Prices of products such as gold and electrolytic copper are affected by multiple factors including global supply and demand, geopolitics, and monetary policies, leading to large fluctuations that directly impact the company’s profitability level. The company will manage price risk through financial instruments such as hedging, while continuously optimizing cost control to enhance earnings resilience.

Production and Operation, and Resource Succession Risks

Mine operations face challenges such as complex geological conditions and tight mine development and production scheduling. The difficulty of acquiring high-quality global resources increases, which may affect long-term sustainable development. The company will increase exploration investment, advance technical upgrades and capacity expansion, optimize mine development and production sequencing, and improve the efficiency of comprehensive resource utilization.

Foreign Exchange Risk

Because the company’s overseas business share is high, foreign exchange fluctuations may affect revenue and profit. The company will smooth the impact of exchange rate volatility through natural hedging, hedging instruments, and other methods to reduce foreign exchange losses.

Compensation of Directors, Supervisors, and Senior Management

During the reporting period, the chairman Wang Jianhua’s pre-tax compensation was 6.494 million yuan; the general manager Gao Bo’s pre-tax compensation was 7.473 million yuan; the vice president Zhou Xinbing’s pre-tax compensation was 6.1516 million yuan; and the CFO Huang Xueb in’s pre-tax compensation was 6.2697 million yuan. The compensation of directors, supervisors, and senior management is linked to the company’s performance, reflecting the company’s remuneration mechanism that balances both incentives and constraints. At the same time, the company has established long-term incentive measures such as an employee share ownership plan, binding core employees with the company’s interests.

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Responsible editor: Xiao Lang Express