According to a research report, the non-ferrous metals industry in H1 2025 saw profits concentrate upstream, with the sector maintaining steady revenue but achieving substantial performance growth, continuously improving profitability, and showing significant cash flow improvements.

Looking at subsectors, in the first half of 2025, the copper sector's profit growth rate significantly exceeded revenue growth, the precious metals sector achieved substantial growth in both revenue and profits, the rare earth sector showed notable recovery in profitability, and the tungsten sector demonstrated steady improvement in profitability.

Regarding precious metals, with Fed rate cut expectations heating up and under a medium to long-term rate cutting cycle, along with increased pressure on US bonds leading to a strengthening US dollar weakness trend and central banks' reserve diversification trend driving medium to long-term increases in gold reserves, gold prices are expected to maintain a long-term bullish outlook.

**Outstanding Performance in Precious Metals and Minor Metals Sectors**

At the industry level, the cumulative revenue growth rate of the non-ferrous metals industry in H1 2025 narrowed month by month, but upstream mining and mineral processing revenue growth still improved compared to 2024. In H1 2025, the operating profit growth rate of non-ferrous mining and mineral processing significantly outpaced smelting and processing industries, with profits concentrating upstream.

At the listed company level, H1 2025 saw steady revenue growth and substantial performance improvement in the non-ferrous metals sector. Listed companies in the non-ferrous industry achieved operating revenue of 1.82 trillion yuan in H1 2025, up 6.59% year-on-year, and net profit attributable to shareholders of 95.363 billion yuan, up 35.94% year-on-year.

H1 2025 saw continuous improvement in profitability for the non-ferrous metals sector, slight increase in leverage ratios, but significant cash flow improvements and continued contraction in capital expenditure. By subsector, precious metals and minor metals sectors showed outstanding performance in H1 2025, while the metal new materials sector faced pressure on performance growth rates.

**Copper Sector Analysis**

H1 2025 copper sector profit growth significantly exceeded revenue growth, though both revenue and profit growth rates marginally narrowed. On the revenue side, the copper sector achieved revenue of 923.661 billion yuan in H1 2025, up 1.54% year-on-year with declining growth rates. On the profit side, the copper sector achieved net profit attributable to shareholders of 43.811 billion yuan in H1 2025, up 40.97% year-on-year, with growth rates improving by 6.18 percentage points and 14.83 percentage points compared to full-year 2024 and the same period in 2024, respectively. H1 2025 saw recovery in copper sector profitability and continued contraction in capital expenditure.

**Precious Metals Sector**

H1 2025 precious metals sector revenue and profits increased substantially year-on-year, with significant marginal improvement in growth rates. On the revenue side, the precious metals sector achieved revenue of 188.253 billion yuan in H1 2025, up 27.15% year-on-year. On the profit side, the precious metals sector achieved net profit attributable to shareholders of 9.681 billion yuan in H1 2025, up 64.71% year-on-year, with growth rates substantially improving by 16.47 percentage points and 11.86 percentage points compared to full-year 2024 and the same period in 2024, respectively. The substantial growth in sector revenue and net profit was mainly attributed to significant year-on-year increases in gold and silver prices. H1 2025 saw recovery in precious metals sector profitability and year-on-year decline in capital expenditure.

**Rare Earth and Magnetic Materials Sectors**

H1 2025 rare earth sector revenue growth turned from negative to positive, with net profit increasing substantially year-on-year. The magnetic materials sector revenue growth turned from negative to slight growth, with net profit growth rates exceeding revenue growth rates. H1 2025 saw notable recovery in rare earth sector profitability, with capital expenditure still growing but with converging marginal growth rates. The magnetic materials sector showed steady improvement in profitability with slight growth in capital expenditure.

**Tungsten Sector**

H1 2025 tungsten sector revenue turned positive year-on-year with marginal improvement in growth rates. Due to non-recurring gains and losses in the same period, net profit attributable to shareholders showed limited growth, but adjusted net profit increased substantially year-on-year. H1 2025 saw steady improvement in tungsten sector profitability with slight growth in capital expenditure.

**Investment Recommendations**

Focus on the copper sector, which faces supply tightness and short-term impacts from leading enterprises' production halts, improving demand structure with potential benefits from overseas demand growth, and strong financial attributes under the Fed's rate-cutting trend.

For precious metals, with Fed rate cut expectations heating up and under medium to long-term rate cutting cycles, increased pressure on US bonds strengthening the US dollar weakness trend, and central banks' reserve diversification driving medium to long-term increases in gold reserves, gold prices are expected to maintain long-term bullish momentum. Recommend attention to ZHAOJIN MINING (01818).

Also recommend attention to the tungsten and rare earth permanent magnet sectors with strong strategic value attributes and constrained supply, with related target JLMAG (06680).

First coverage with "Overweight" rating for the industry.

**Risk Warnings**

Raw material and product price volatility risks, downstream demand growth falling short of expectations, policy change risks, industry capacity not releasing as scheduled risks, and new technology and material substitution risks.