OCBC Investment Research
Date of Report: 20 August 2025
Jiangxi Copper Co Ltd: Positioned to Shine Amid China’s “Anti-Involution” Drive and Commodity Uptrend
Investment Overview: Why Jiangxi Copper Stands Out in 2025
Jiangxi Copper Co Ltd, one of China’s largest copper producers, is emerging as a top pick in the materials sector, backed by robust commodity prices and policy tailwinds. OCBC Investment Research has issued a “BUY” rating with a Fair Value estimate of CNY 31.00, up from CNY 26.00, reflecting confidence in the company’s upside potential.
Key Investment Points
- Outperforming the Market: Jiangxi Copper’s A-share price is up ~19% year-to-date, handily beating the CSI 300 Index’s ~7% rise. This performance is powered by favorable copper and gold prices, along with strong 1Q25 results.
- Commodity Price Tailwinds: Copper prices are projected to climb to USD 9,844/tonne in the next 12 months, while gold is expected to hit USD 3,900/oz, both supporting revenue and margin growth.
- “Anti-Involution” Policy Support: Jiangxi Copper could benefit from China’s campaign to address industry overcapacity and deflationary pressures. Policy measures may restore profitability to the oversupplied copper smelting sector.
- Resilient Operations: With key assets located in China, the company is relatively insulated from international geopolitical risk.
Financial Performance and Projections
| Metric |
FY24 |
FY25E |
FY26E |
| Revenue (CNY b) |
519.2 |
558.7 |
566.7 |
| Gross Profit (CNY b) |
16.0 |
14.9 |
15.3 |
| Net Profit (CNY b) |
6.9 |
7.0 |
8.4 |
| EPS (CNY) |
2.0 |
2.0 |
2.4 |
| DPS (CNY) |
0.7 |
0.7 |
0.8 |
| Gross Margin (%) |
3.1% |
2.7% |
2.7% |
| Net Margin (%) |
1.3% |
1.3% |
1.5% |
| Net Gearing (%) |
58.8% |
44.3% |
38.4% |
| ROE (%) |
8.9% |
8.5% |
9.4% |
Jiangxi Copper: Business and Strategic Positioning
- Core Activities: Copper mining, smelting, refining, and processing.
- Product Range: Copper cathode, copper wire and rod, as well as gold, silver, sulfuric acid, and pyrite concentrate as byproducts.
- Major Asset: Dexin Copper Mine, China’s largest domestic copper mine.
- Market Exposure: 87.7% of FY24 revenue from Mainland China, with the remainder from Hong Kong (6.2%) and other regions (6.1%).
- End-Markets: Power grid, appliances, machinery, and new energy vehicles (NEVs).
- Ownership: Majority held by Jiangxi Copper Corporation Limited (58.1%), under Jiangxi Provincial SASAC.
ESG and Risk Factors: Navigating Environmental and Operational Challenges
- Carbon Emissions: Jiangxi Copper’s Scope 1+2 GHG emissions intensity (2.1-2.2mt FY2020-2022) is below the industry average, with ongoing efforts to reduce emissions.
- Environmental Risks: High exposure to reputational and regulatory risks due to sole domestic operations, including ongoing community allegations of soil and river pollution.
- Governance: Average relative to global peers; lags in business ethics and community relations best practices.
- Certification: ISO 14001 environmental standard, but lacks waste reduction targets and executive pay links to environmental performance.
- Community Risks: No formal grievance channels or indigenous policies, increasing risk of local opposition.
Peer Group Comparison: How Jiangxi Copper Stacks Up
| Company |
P/E FY25E |
P/E FY26E |
P/B FY25E |
P/B FY26E |
EV/EBITDA FY25E |
EV/EBITDA FY26E |
Dividend Yield FY25E |
Dividend Yield FY26E |
ROE FY25E |
ROE FY26E |
| Jiangxi Copper Co Ltd (600362.SS) |
12.6 |
12.7 |
1.0 |
1.0 |
9.2 |
9.5 |
2.7% |
2.9% |
7.6% |
7.5% |
| Tongling Nonferrous Metals (000630.SZ) |
15.2 |
11.0 |
1.4 |
1.3 |
7.6 |
7.0 |
2.2% |
3.0% |
9.7% |
12.5% |
| Yunnan Copper Co Ltd (000878.SZ) |
24.6 |
11.0 |
1.8 |
1.6 |
N.A. |
N.A. |
1.6% |
3.6% |
7.3% |
14.7% |
Jiangxi Copper: Detailed Financials and Historical Performance
| Year |
Revenue (CNY m) |
Gross Profit (CNY m) |
Operating Income (CNY m) |
Net Income (CNY m) |
EPS (CNY) |
ROE (%) |
Operating Margin (%) |
Net Margin (%) |
| 2020 |
317,756.5 |
10,069.4 |
5,102.8 |
2,227.7 |
0.6 |
3.95 |
1.61 |
0.70 |
| 2021 |
441,614.4 |
16,191.6 |
9,593.5 |
5,772.5 |
1.7 |
8.90 |
2.17 |
1.31 |
| 2022 |
478,392.8 |
12,056.4 |
9,681.1 |
6,001.5 |
1.7 |
8.38 |
2.02 |
1.25 |
| 2023 |
520,338.5 |
12,016.3 |
10,868.6 |
6,745.8 |
1.9 |
9.57 |
2.09 |
1.30 |
| 2024 |
519,248.2 |
16,045.4 |
12,119.3 |
6,901.0 |
2.0 |
9.49 |
2.33 |
1.33 |
Growth Catalysts and Risks: What Could Drive or Derail Jiangxi Copper
Potential Catalysts:
- Commodity prices rising faster than expected, particularly copper.
- Lower operating costs boosting margins.
- Stricter enforcement of the scrap copper ban, leading to higher treatment charges (TC) and refining charges (RC).
Key Risks:
- Earnings highly sensitive to commodity price fluctuations.
- A slowdown in China’s grid investment could hit copper demand.
- Weakness in the housing market.
- Operational risks, such as higher mining/smelting costs or sudden drops in ore grade.
Valuation and Ratings Methodology
OCBC Investment Research’s “BUY” rating reflects expected total returns (excluding dividends) in excess of 10% for Jiangxi Copper, based on current market prices and company fundamentals. The analysis uses a medium-term outlook, typically within a 12-month horizon.
Conclusion: Jiangxi Copper’s Investment Case in 2025
With strong fundamentals, policy support, and resilient domestic operations, Jiangxi Copper is strategically positioned for further growth. While environmental and operational risks persist, the company’s performance, sector leadership, and favorable policy trends make it a compelling investment choice in the Chinese materials sector.
Company Profiles: Peer Analysis
Tongling Nonferrous Metals (000630.SZ):
P/E ratios expected to fall from 15.2 (FY25E) to 11.0 (FY26E)
Dividend yield to rise from 2.2% to 3.0%
ROE improving from 9.7% to 12.5%
Competitive on valuation, with higher yield and return prospects
Yunnan Copper Co Ltd (000878.SZ):
P/E drops from 24.6 to 11.0 (FY25E to FY26E)
Dividend yield rises from 1.6% to 3.6%
ROE jumps from 7.3% to 14.7%
Higher valuation, but with significant improvement in profitability anticipated
Broker Certification and Disclosure
OCBC Investment Research analysts certify the accuracy and independence of the report’s opinions and recommendations. The report is provided for informational purposes and is not an offer or solicitation for investment in any securities. Investors are advised to consider their own financial circumstances and seek professional advice before making investment decisions.
