China Mining International Limited: 1H2025 Interim Results Analysis

China Mining International Limited (“the Company” or “the Group”) released its unaudited condensed interim financial statements for the six months ended 30 June 2025. The report reveals a company in the midst of a challenging restructuring, with key decisions around cost-cutting, asset management, and strategic pivots underway. Below is a detailed analysis for investors and financial professionals.

Key Financial Metrics and Comparative Table

Historical Performance Trends

• No revenue has been recognized since at least 1H2024. The Group ceased its agriculture operations after returning farmland to the government and has not launched new business streams.
• Net losses have narrowed from RMB 5.2 million in 1H2024 to RMB 3.8 million in 1H2025. This improvement is attributed to significant cost-cutting, reduced administrative expenses, and one-off government compensation.
• Net asset value per share continues to fall, reflecting ongoing losses and asset impairments.

Exceptional Items and Asset Impairments

• Impairment losses: RMB 1.2 million on trade receivables and RMB 1.2 million on property, plant, and equipment were recorded in 1H2025. These impairments were partly in response to audit concerns and asset seizures by courts.
• Government compensation: RMB 1.64 million was received for the occupation of land and loss of biological assets due to an airport pipeline project, boosting other income.
• No revenue activities: The Group is attempting to lease out its remaining assets and seek new business streams, but no operating revenue has been generated.

Asset Valuation and Audit Issues

• Asset revaluation: The auditors recommended an independent valuation for the Group’s mining rights (investment in Huixin Mining International Pty Limited). The Company declined, arguing no change in asset value based on the last sales and purchase agreement and cost-saving priorities.
• Audit disclaimer: The FY2024 audit carried a disclaimer of opinion due to asset seizures, inability to verify some balances, and concerns about the going concern basis. The Company has tried to address these, but material risk remains.

Legal and Structural Issues

• Legal disputes: Major assets of the agricultural subsidiaries remain sealed by courts due to creditor disputes. The Group is cooperating with proceedings, but uncertainties persist about asset recovery or further impairments.
• Going concern: The Company’s survival depends on cost-cutting, asset sales (notably the mining stake), and ongoing financial support from its controlling shareholder. The Group holds net liabilities of RMB 1.7 million as of 30 June 2025.
• No dividends declared: No dividend has been proposed or paid for 1H2025 or the prior periods.
• No share buybacks or placements: There were no share issues, buybacks, or dilutive events during the reporting period.

Chairman’s Statement and Tone

“Amid the deteriorating economic environment and financial conditions, the Group faced significant challenges in collaborating with business partners and managing regulatory burdens. Nevertheless, despite the uncertain market landscape, the Group remains resolute in its commitment to cautiously and proactively pursuing new revenue streams within this challenging macroeconomic context. To bolster new revenue streams, the Company is in the process of seeking potential partnerships and analysing the feasibility of collaborations for diversified income.

To extract value from the Thabazimbi Mine, the Company is seeking new buyers or strategic partners with the aim of generating substantial cash inflow from the transaction.

To conquer the loan repayment challenges, the Company is in active engagement with related creditors to come up with better repayment arrangement plans.

The Company is committed to its goal of reducing operational costs and will continue to implement cost-cutting measures including but not limited to disposing dormant holding companies, substituting with low-cost service providers without compromising efficiency.”

Tone: The Chairman’s statement is cautious and defensive, acknowledging difficulties while emphasizing ongoing cost control, asset realization, and the search for new revenue sources. There is no clear forward guidance or optimism for an imminent turnaround.

Directors’ Remuneration and Related Party Transactions

• No explicit breakdown of director’s pay is provided, but RMB 2.65 million in financial support from a director (Mr. Guo Yinghui) was used to cover operating expenses including salaries and director’s fees.
• No material related-party transactions outside of disclosed shareholder loans.

Divestments, Fundraising and Corporate Actions

• The Company is attempting to sell its 40.15% stake in Huixin Mining International Pty Limited (South African iron ore mine) and is open to strategic partners or buyers.
• The Company plans to raise RMB 10 million in equity via private placement for business development.
• No share buybacks, new share issues, or dilutive events occurred in the review period.

Risks and Outlook

• Liquidity risk: The Group remains dependent on ongoing shareholder support, asset sales, and cost reductions for survival.
• Legal uncertainty: Continuing court actions related to seized agricultural assets.
• No clear new business yet: The Company has not announced any new revenue-generating operations, making future profitability uncertain.
• No dividends: Reflecting ongoing losses and a weak financial position.

Conclusion and Investment Recommendations

Overall Assessment: The Group’s financial performance remains weak, though there has been a marked improvement in cost management and a reduction in net losses. However, the lack of revenue, ongoing legal and asset valuation uncertainties, and continued dependence on external financial support all point to a precarious situation. Unless a meaningful new business or asset sale materializes, the outlook remains negative.

• If you currently hold this stock: Consider reducing your position or exiting entirely, especially if you have lower risk tolerance. The company is in survival mode, with no core business activity and significant uncertainties around asset recovery and going concern. Only speculative investors with a high risk appetite may choose to hold, betting on a successful asset sale or turnaround.
• If you do not hold this stock: It is prudent to stay on the sidelines. Wait for concrete evidence of strategic asset sales, new business streams, or a return to profitability before considering an entry. The risk/reward profile remains unattractive for most investors at this stage.

Disclaimer: This analysis is based solely on information presented in the Company’s official interim financial report. It does not account for developments after the report date or external data. Investment decisions should consider your objectives and risk profile, and may benefit from independent professional advice.

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