CITIC Metals 2025 Annual Report Analysis: Non-recurring Net Profit Up 41%, Operating Cash Flow Plummets 78%

Interpretation of Core Profitability Indicators

Steady Growth in Operating Revenue

In 2025, the company achieved operating revenue of 141.819 billion yuan, representing a year-on-year increase of 9.57%. Judging from the revenue structure, the non-ferrous metals business contributed 113.542 billion yuan, accounting for 80%. This was a substantial year-on-year increase of 19.66%, becoming the core driver of revenue growth. Revenue from the ferrous metals business was 27.852 billion yuan, down 18% year-on-year; however, the gross profit margin increased by 2.67 percentage points to 1.69%, indicating that the business structure optimization has produced results. By region, overseas revenue was 47.647 billion yuan, a significant year-on-year increase of 34.99%, reflecting the continued advancement of international expansion.

Net Profit and Non-Recurring Net Profit Both Increase

Net profit attributable to shareholders of the listed company was 2.689 billion yuan, up 20.16% year-on-year. Non-recurring net profit attributable to shareholders of the listed company was 2.567 billion yuan, up 41% year-on-year, a sharp increase that far outpaced the net profit growth rate. This indicates that the company’s core earnings quality has improved significantly. The profit growth mainly comes from: in the trading business, the company actively responds to fluctuations in commodity prices, with a continuously improving profitability level; in the investment business, increased production and sales volume at the Las Bang Bas mine combined with higher copper prices led to a substantial increase in equity profits; the third phase of the Camoa-Kakula copper mine processing plant under Eiffelhoe Mining achieved record-setting production, with steadily growing revenue contribution.

Earnings Per Share Rise in Line

Basic earnings per share were 0.55 yuan per share, up 19.57% year-on-year; non-recurring earnings per share were 0.52 yuan per share, up 40.54% year-on-year. The figures are highly consistent with the growth rate of non-recurring net profit, reflecting that the company’s earnings growth is effectively transmitted to shareholders’ returns.

Analysis of Cost Structure

Selling Expenses Increase Slightly

Selling expenses were 269 million yuan, up 2.58% year-on-year. The main reason is that the expansion of business scale led to a small increase in warehousing fees, employee compensation, and so on. The selling expense ratio remained at 0.19%, at a relatively low level, indicating stable sales management efficiency.

Management Expenses Show Significant Growth

Management expenses were 259 million yuan, up 14.44% year-on-year. The main reason is an increase in office lease costs, communication expenses, and fees paid to intermediary agencies. The management expense ratio was 0.18%, still within a reasonable range and not causing significant pressure on profitability.

Financial Expenses Drop Sharply

Financial expenses were 29 million yuan, down 71.51% year-on-year. The main reason is that the company optimized its financing approach, reduced the scale of loans, and benefited from a decline in interest rates, resulting in lower interest expense. In addition, the depreciation of the U.S. dollar against the RMB reduced year-on-year foreign exchange gains/losses. The financial expense ratio fell to 0.02%, highlighting strong effectiveness in controlling financial costs.

R&D Expenses Grow Rapidly

R&D expenses were 51 million yuan, up 45.35% year-on-year. The main reason is that the company increased its investment in scientific research, and the upfront spending for setting up an advanced materials research institute increased. The company continues to deepen efforts in promoting and applying niobium technology. During the year, it obtained 6 authorized invention patents, participated in 9 standards development/amendment projects, and helped drive China’s annual output of niobium-containing steel to exceed 100 million tons. R&D investment lays a foundation for the company’s long-term competitiveness.

R&D Personnel Overview

The company has 27 R&D personnel, accounting for 8.52% of the total company headcount. In terms of educational background, there are 17 doctoral degree holders and 10 master’s degree holders, with 100% of the team having a high level of education. In terms of age structure, there are 15 R&D personnel aged 40–50, accounting for 55.56%, indicating that the core R&D team is mature and stable. Relying on the advanced materials research institute, the company further optimizes the allocation of R&D personnel, strengthens research capabilities, and provides talent support for building an open and collaborative innovation ecosystem.

In-Depth Cash Flow Analysis

Operating Cash Flow Falls Sharply

Net cash flow from operating activities was 0.19 billion yuan, down 78.04% year-on-year. The main reason is that at the end of the reporting period, non-ferrous metal prices rose significantly, increasing the scale of working capital occupied by the trading business. By quarter, the net cash flow from operating activities in the fourth quarter was -5.649 billion yuan, indicating that year-end capital occupation pressure increased significantly.

Investment Cash Flow Grows

Net cash flow from investing activities was 1.471 billion yuan, up 24.01% year-on-year. The main reason is the increase in proceeds from investments being recovered and gains from investments. During the reporting period, the company received 278 million U.S. dollars in dividends from the Las Bang Bas mine, and investment returns remained steady.

Financing Cash Flow Improves

Net cash flow from financing activities was -1.514 billion yuan. Compared with the same period last year, losses narrowed by 14.30%. The main reason is that outflows for repaying debts decreased. At the same time, the company optimized its financing structure, easing financing pressure to some extent.

Potential Risk Alerts

Risk of Commodity Price Fluctuations

The prices of the non-ferrous metals and ferrous metals that the company mainly operates are affected by multiple factors, including global economic cycles, macroeconomic policies, and geopolitical tensions, among others. As a result, market price fluctuations have uncertainty. Although the company hedges risks through methods such as hedging/instruments, sharp and major price fluctuations may still impact operating performance.

Risk from the Macroeconomic Environment and Trading Conditions

Adjustments to the global economic and trade order, changes in geopolitical situations, and changes in the regulatory environment in resource countries’ policies may affect the company’s cross-border trade, resource acquisition, and investment layout. Pressure on domestic economic growth may also suppress downstream demand to a certain extent.

Risk of Exchange Rate Fluctuations

As the company’s international business scale expands, the proportion of receipts and payments in foreign currencies such as the U.S. dollar increases, and the impact of exchange rate changes on operating costs and earnings becomes greater. Although the company uses foreign exchange derivatives to hedge risks, the uncertainty of exchange rate fluctuations may still lead to volatility in foreign exchange gains/losses.

Risk of Credit Default

Some upstream and downstream enterprises face pressure in their operations and funding situation. The company may face the risk that customers or suppliers fail to perform on time or that transactions default. The company needs to continuously improve its counterparty management and credit assessment system, and strengthen dynamic risk monitoring.

Compensation for Executives and Senior Management

• Chairman Wu Xianwen: During the reporting period, the total pre-tax remuneration received from the company was 2.1736 million yuan, and no remuneration was obtained from the company’s related parties.
• General Manager Wang Meng: During the reporting period, the total pre-tax remuneration received from the company was 1.8136 million yuan, and no remuneration was obtained from the company’s related parties.
• Vice President Jiang Shan: During the reporting period, the total pre-tax remuneration received from the company was 0.8491 million yuan, and no remuneration was obtained from the company’s related parties.
• Vice President Li Shiyuan: During the reporting period, the total pre-tax remuneration received from the company was 0.7766 million yuan, and no remuneration was obtained from the company’s related parties.
• Chief Financial Officer Chen Cong: During the reporting period, the total pre-tax remuneration received from the company was 0.7142 million yuan, and no remuneration was obtained from the company’s related parties.

The compensation levels are basically aligned with the company’s performance and the industry level. Through a market-oriented compensation system, the company attracts and retains core management talent, ensuring that business operations are carried out steadily.

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Responsible editor: Xiao Lang Kuaibao