Copper Smelting & Refining

Jiangxi Copper has signed a new three-year supply and services agreement with JCC Group covering copper products, other metals, auxiliary materials and a wide range of industrial support services. The agreement adds another operational reference point for investors watching how sentiment shifts around future cash flows and risk, with the stock trading at HK$33.22 after a 30 day share price return down 15.43% and a year to date share price return down 23.95%, even though the 3 year total shareholder return is up about 3.3x. On valuation, Jiangxi Copper trades on a P/E of 8.4x, below the Hong Kong Metals and Mining industry average P/E of 10.1x and a peer average of 10.9x, and below an estimated fair P/E of 9.1x, with profit growth of 54.1% over the past year and 10.9% per year across five years. A Simply Wall St discounted cash flow model compares the HK$33.22 share price with an estimated future cash flow value of HK$62.35, framing the stock as materially undervalued. Risks remain if copper or gold demand weakens, or if project and service costs rise faster than the company can pass them on.

Jiangxi Copper announced on the evening of September 30 that the company signed three daily related-party transaction agreements with its controlling shareholder, Jiangxi Copper Corporation, effective from January 1, 2027 to December 31, 2029, replacing the original contracts expiring on December 31, 2026. Under the Comprehensive Supply and Services Contract I, the company's caps for purchasing materials and receiving services from Jiangxi Copper Corporation from 2027 to 2029 are 17.174 billion yuan, 17.378 billion yuan, and 17.509 billion yuan respectively, totaling more than 52 billion yuan over the three years, a notable increase from previous estimates. The company said this is mainly based on market conditions and future business development needs, compounded by the upward trend in copper prices and significant rises in precious metals such as gold and silver. Under the Comprehensive Supply and Services Contract II, the company's estimated caps for selling products and providing services to Jiangxi Copper Corporation over the same period are 5.571 billion yuan, 6.699 billion yuan, and 6.934 billion yuan respectively, with the adjustment mainly due to expected increases in Jiangxi Copper Corporation's purchases of cathode copper. Regarding leasing, the company plans to rent approximately 50.42 million square meters of land and buildings from Jiangxi Copper Corporation, with annual rent of 195 million yuan, payable quarterly. The above proposals have been reviewed and approved at the twentieth meeting of the company's tenth board of directors, with connected directors abstaining from voting, but they still need to be submitted to the shareholders' meeting for approval. Jiangxi Copper Corporation holds a total of 45.72 percent of Jiangxi Copper's shares. As of the end of 2025, its audited total assets were approximately 2.86 trillion yuan, with 2025 operating revenue of approximately 5.79 trillion yuan and net profit of approximately 79.751 billion yuan.