The performance growth of the metals sector generally accelerated in 2025 and the first quarter of 2026, with tungsten, lithium, lead-zinc, and rare earth magnetic materials leading the gains. Aluminum, copper, nickel-cobalt-tin-antimony, and gold have shown relatively weaker performance since the beginning of the year. The current valuation of the metals sector remains at a reasonable level, with aluminum, copper, nickel-cobalt-tin-antimony, and gold at relatively low valuations, leaving room for potential recovery. While industry dividends have slightly declined, the projected dividend yield for some individual stocks still exceeds 5%. Looking ahead to 2026, with easing liquidity pressures, frequent supply disruptions, and sustained high demand in certain downstream sectors, it is recommended to maintain a focus on investment opportunities in lithium, copper, rare earths, strategic metals, aluminum, and gold.
▍Market Review: Metals Sector Outperformed Broad Market in 2025; Tungsten and Lithium Strong in 2026. From 2025 to the beginning of 2026 (data as of April 30, same below), the CITIC Nonferrous Metals Sector Index rose by 98.6% and 10.4%, outperforming the CSI 300 Index by 77.4 and 8.5 percentage points, ranking 2nd and 7th among 30 industries. By segment in 2025, tungsten, nickel-cobalt-tin-antimony, copper, lithium, and lead-zinc sectors surged by 146%, 130%, 118%, 94%, and 92%, leading the industry. Rare earth magnetic materials, gold, aluminum, and other rare metals all achieved gains exceeding 60%. Since the start of 2026, tungsten, lithium, other rare metals, and lead-zinc sectors have risen by 74%, 38%, 32%, and 23%, respectively, leading the gains. Rare earth magnetic materials, gold, nickel-cobalt-tin-antimony, and aluminum increased by 16%, 10%, 9%, and 3%, while the copper sector declined by 5.0%, showing relative weakness.
▍Performance and Valuation Analysis: Accelerated Earnings Growth; Valuations Remain Reasonable. In 2025, the nonferrous metals industry's operating revenue increased by 15.5% year-on-year, marking the seventh consecutive year of growth. Net profit attributable to shareholders surged by 56.5%, reaching a new high. In the first quarter of 2026, sector revenue and net profit grew by 37.6% and 111.0% year-on-year, indicating a significant acceleration. By segment, rare earth magnetic materials, gold, aluminum, tungsten, copper, nickel-cobalt-tin-antimony, and lead-zinc sectors performed strongly, with 2025 net profits up by 150%, 67%, 51%, 46%, 41%, 34%, and 33%, respectively. In Q1 2026, net profits for tungsten, aluminum, nickel-cobalt-tin-antimony, gold, lead-zinc, and copper sectors grew by 301%, 131%, 117%, 108%, 83%, and 78% year-on-year, while the lithium sector returned to profitability. As of April 30, 2026, the Wind consensus forecast P/E ratio for the nonferrous metals sector for 2026 is 15.2x, below the industry average of 21.6x. The trailing P/E is 16.3x, and the trailing P/B is 2.8x, both at historically low-to-mid levels. Among segments, aluminum, copper, nickel-cobalt-tin-antimony, and gold are at relatively low valuations, with 2026 consensus forecast P/E ratios of 10.9x, 12.4x, 16.4x, and 16.4x, respectively.
▍Holdings and Dividend Analysis: Fund Holdings Remain High; Dividend Payouts Slightly Lower. As of the end of Q1 2026, the market value of fund heavy holdings in the nonferrous metals industry was 263.3 billion yuan, ranking 5th among 29 industries in the market. The proportion of heavy holdings to total fund equity investment value was 3.27%, down 0.08 percentage points from the end of 2025. By the end of 2025, the allocation weights for industrial metals, precious metals, and rare metals were 3.9%, 0.9%, and 0.8%, respectively, up 1.7, 0.4, and 0.9 percentage points from the end of 2024, indicating an overweight stance. The overall dividend payout ratio for the nonferrous metals industry in 2025 was 33.8%, a slight decrease of 0.9 percentage points from 34.7% in 2024. The gap compared to all A-shares widened from 4.7 to 5.4 percentage points. The industry's dividend yield reached 1.34%, down 0.80 percentage points from 2.14% in 2024.
▍Risk Factors: Risk of a sharp decline in metal prices; risk of slower-than-expected domestic economic recovery; risk of overseas economic recession; risk of less-than-expected Federal Reserve rate cuts; risk of faster-than-expected growth in upstream supply; operational risks associated with companies' overseas assets; risk of delays in new capacity construction; risk of unexpected changes in industry policies; risk of stricter-than-expected safety and environmental regulations.
▍Investment Strategy: The performance growth of the metals sector generally accelerated in 2025 and the first quarter of 2026, with tungsten, lithium, lead-zinc, and rare earth magnetic materials leading the gains. Aluminum, copper, nickel-cobalt-tin-antimony, and gold have shown relatively weaker performance since the beginning of the year. The current valuation of the metals sector remains at a reasonable level, with aluminum, copper, nickel-cobalt-tin-antimony, and gold at relatively low valuations, leaving room for potential recovery. While industry dividends have slightly declined, the projected dividend yield for some individual stocks still exceeds 5%. Looking ahead to 2026, with easing liquidity pressures, frequent supply disruptions, and sustained high demand in certain downstream sectors, it is recommended to maintain a focus on investment opportunities in lithium, copper, rare earths, strategic metals, aluminum, and gold.
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