The Gold Sector’s Explosive H1 Earnings: What Drives China’s Mining Giants?

The gold sector in China has delivered a stunning performance in the first half of 2025, with two of its largest players—Zhongjin Gold and China Gold International—posting record profits. These gains reflect a confluence of soaring gold prices, operational efficiency, and strategic production ramp-ups. For investors, the question is whether this momentum can translate into long-term value creation.

Zhongjin Gold, the country’s largest gold producer, reported a 55% year-on-year surge in net profit to 2.69 billion yuan in H1 2025, alongside a 23% revenue increase to 35.07 billion yuan [1]. This outperformance was driven by a 40% rise in gold prices and disciplined cost management [4]. Analysts note that the company’s trailing P/E ratio of 21.20 and EV/EBITDA of 11.52 suggest it trades at a premium to its peers but remains justified given its dominant market position and stable cash flows [3].

China Gold International, meanwhile, turned a $30.9 million loss in H1 2024 into a $202.3 million profit in H1 2025, fueled by a 69% jump in gold production to 88,200 ounces [2]. The company’s turnaround was underpinned by the full resumption of operations at the Jiama Mine in Tibet and improved efficiency at the CSH Mine [2]. With a P/E of 15.2x and EV/EBITDA of 14.43x, its valuation appears more attractive relative to its earnings growth [3].

The broader industry’s success is inextricably linked to gold’s meteoric rise in 2025. Prices surged 26% in U.S. dollar terms, reaching $3,300/oz by midyear, driven by a weaker dollar, geopolitical tensions, and central bank demand [1]. J.P. Morgan projects gold could hit $4,000/oz by mid-2026, further bolstering miners’ margins [5]. For Chinese producers, the RMB gold price on the Shanghai Gold Exchange (SGE) also climbed 28% by late 2024, reflecting strong domestic investment demand [4].

While production and pricing are key drivers, cost discipline has been equally critical. China Gold International’s mine operating earnings expanded from $17.9 million to $277.1 million in H1 2025, aided by a 38% increase in realized gold prices and by-product credits [2]. Zhongjin Gold, despite a tragic incident at its Inner Mongolia subsidiary that temporarily disrupted operations, maintained a 10.1% net profit margin, up from 5.42% in recent quarters [1][4].

For long-term investors, the sector’s valuation metrics offer further intrigue. At a P/E of 15.2x, China Gold International trades below the Canadian mining industry average of 16.9x, while Zhongjin Gold’s 21.20 P/E reflects its scale and stability [3]. Both companies are also benefiting from a structural shift in global gold demand, as central banks in emerging markets accumulate reserves to diversify away from the U.S. dollar [4].

In conclusion, the explosive H1 earnings of China’s gold giants are not an anomaly but a symptom of a sector primed for sustained growth. As gold prices climb higher and operational efficiencies take root, these firms are well-positioned to deliver robust returns. However, investors must remain vigilant about operational risks, such as regulatory changes or production disruptions, which could temper long-term gains.

Source:
[1] Zhongjin Gold's H1 Profit Jumps 55%, Revenue Rises 23%
https://www.marketscreener.com/news/zhongjin-gold-s-h1-profit-jumps-55-revenue-rises-23-shares-up-4-ce7c50dcdc88f421
[2] China Gold International's H1 2025 Surge: A Strategic Turnaround & Rating Catalyst for Gold Sector
https://www.ainvest.com/news/china-gold-international-h1-2025-surge-strategic-turnaround-rating-catalyst-gold-sector-2508/
[3] Assessing China Gold International Resources (TSX:CGG)
https://www.webull.com/news/13379224357725184
[4] Chinese gold market outlook 2025: Stabilising demand
https://www.gold.org/goldhub/research/chinese-gold-market-outlook-2025-stabilising-demand
[5] Gold price predictions from J.P. Morgan Research
https://www.jpmorgan.com/insights/global-research/commodities/gold-prices