Profit Driven by Robust Core Business, Despite FV Losses
发布时间：2026-03-30 来源：华泰证券
Humon Smelting has reported 2025 results with revenue reaching RMB112.39bn(+48.28%YoY)and an attributable net profit of RMB638mn(+18.81%YoY).The earnings growth was primarily driven by increased product selling prices and sales volume,and acontinued decline in the expense ratio.That said,the attributable net profit fell short of our expectation(RMB845mn)owing to fair-value losses and higher income tax.Looking ahead,we think that the company is poised to benefit from the gold price upcycle.Coupled with effective cost control,robust revenue growth in the sulfuric acid segment,and upcoming mine capacity expansion,we anticipate improving earnings upside potential.Maintain OVERWEIGHT
Core business in steady uplift
Revenue rose by 48.28%YoY in 2025,primarily driven by increased sales volumes and prices for gold,silver,copper,and sulfuric acid products.COGS increased by 48.92%YoY owing to greater sales volume and rising raw-material costs,resulting in a0.43pp YoY decline in the full-year gross margin of 2.03%.On the expense front,the 2025 full-year sales,administrative,R&D,and finance expense ratios were 0.04%(-0.01pp YoY),0.52%(-0.22pp),0.20%(-0.07pp),and 0.31%(-0.02pp)respectively,demonstrating solid cost discipline.On aseparate note,the company recorded RMB134mn in fair-value losses for the year(mainly from hedging-position revaluations),which weighed on earnings.This was to some extent offset by RMB145mn in investment income(+RMB160mn YoY),mainly on partial divestment of its stake in Wanguo Gold.
We remain bullish on the copper and gold price upcycle
The recent pullback in gold prices may have been caused by liquidity stress,but we still favor gold owing to its long-term crisis-hedging function.According to our report Concerns&Disruptions Amid Middle East Geopolitical Shocks,published on 15 March 2026,gold delivered positive returns in 64%of crisis weeks across 14 spikes in geopolitical risk between 1985 and February 2026.In every major crisis from 2000 to 2025,except the internet bubble,gold also posted positive returns and effectively hedged risk during US equity pullbacks.Geopolitical events in the Middle East have reignited inflation concerns,and the market is concerned that amacro backdrop similar to 2022 or the 1970-1980 period could return.Looking back at history,we think that higher allocations by central banks,financial institutions,and individuals can offset the pressure from possible rate hikes and lift gold prices.For copper(refer to our report Demand Recovery&Constrained Supply;Nonferrous Upcycle Solid published on 23 January 2026),structural supply constraints are tightening amid robust demand from US stockpiling and strong power-grid investments.We expect ashift from balanced to deficit in 2026,potentially driving copper prices higher.
Maintain OVERWEIGHT
We raise our earnings forecasts considering:1)robust revenue growth in the sulfuric acid segment,2)a sustained upward trajectory of gold/copper prices,and 3)strong profitability at associate Wanguo Gold.We project 2026/2027/2028 attributable net profit at RMB1.46/1.96/3.40bn,representing 36.91/32.55%upward revisions for 2026/2027 vs our prior estimates.Peer companies trade at an average of 17.2x 2026E PE on Wind consensus.Given the company’s earnings stability,we apply 17.2x 2026E PE to derive our new target price of RMB17.54(previous:RMB16.06;adjusted for share-capital changes:RMB14.32 based on 17.3x 2026E PE).
Risks:smelting&processing fee declines;weaker base metal prices than we expect.