Despite soaring precious metal prices and the allure of its "silver" concept, Baiyin Nonferrous Group Co.,Ltd. (601212.SH) rode a wave of "name recognition dividends" to achieve seven consecutive trading-day limit-ups from January 20 to 28. Its market capitalization surged past 100 billion yuan, with the stock price nearly doubling since January 20.
The stock's dramatic rise starkly contrasts with the company's fundamental performance. During an industry upcycle, the company has projected a net loss ranging from 450 million to 675 million yuan for 2025, swinging from a profit in 2024. A provision of 314 million yuan for estimated liabilities related to a storage contract dispute is identified as the primary factor pressuring its earnings. Weak profitability and a high debt ratio highlight the company's operational dilemma of being "large but not strong." Although Baiyin Nonferrous is actively pursuing transformation by expanding into new energy and new materials industries, these emerging businesses have yet to achieve economies of scale. The stock price rally, initially fueled by speculative fervor, now faces a reality check from its underlying fundamentals.
Trading data shows that on January 28, Baiyin Nonferrous hit its seventh consecutive limit-up, closing at 13.81 yuan per share, marking a multi-year high since 2018. Its total market capitalization reached 102 billion yuan, with a trading volume of 5.409 billion yuan for the day. The stock's cumulative gain since January 20 reached 95%.
Baiyin Nonferrous's primary business involves the mining, beneficiation, smelting, processing, and trading of various non-ferrous and precious metals, including copper, zinc, lead, gold, and silver. Its operations cover the entire industrial chain from exploration and mining to smelting and processing.
The underlying logic behind the seven consecutive limit-ups is attributed to a combination of industry catalysts and the "name recognition dividend." In 2025, prices of precious metals like gold and silver reached record highs, while prices of industrial metals such as copper, aluminum, lead, and zinc also rose significantly. The price of silver surged nearly 140% in 2025 and continued its upward trend this year, with the London silver spot price exceeding $100 per ounce, posting a gain of over 40% so far in 2026.
However, despite its name suggesting a strong connection to silver, Baiyin Nonferrous's actual exposure to the metal is minimal. The company's core product is cathode copper, with revenue from silver accounting for only 4.5% in the first half of 2025. This indicates that investor speculation is centered on the "silver" name rather than the company's genuine business value.
Amid an environment of rising volumes and prices and significantly improved industry-wide profitability, most listed companies in the sector that have issued earnings previews reported positive forecasts. Baiyin Nonferrous, however, delivered results contrary to the market's enthusiasm. According to its 2025 earnings preview, the company expects its net profit attributable to shareholders to be a loss between 450 million and 675 million yuan, a swing from profit to loss compared to 2024.
The core reason for this counter-cyclical loss during an industry upswing is the provision for estimated liabilities related to a storage contract dispute. Due to a dispute between the company's subsidiary, Shanghai Honglu International Trade Co., Ltd. ("Shanghai Honglu"), and Nancun Warehouse Management Group Co., Ltd. and its Shanghai branch ("Nancun Company"), Baiyin Nonferrous recognized an estimated liability of approximately 314 million yuan in the first half of 2025, based on the latest case developments and the prudence principle.
Shanghai Honglu, engaged in non-ferrous metal trading, had entrusted aluminum ingots and other goods to Nancun Company for storage. The case originated in June 2022 when Shanghai Honglu filed a lawsuit with the Shanghai Pudong New Area Court over the storage contract dispute and applied for property preservation. After initial dismissal and subsequent appeal, the civil proceedings were transferred to public security authorities in the first half of 2025 due to suspected criminal involvement, and the police have criminally sealed the aluminum ingots in the Nancun warehouse.
Beyond this storage dispute, Baiyin Nonferrous has previously experienced multiple internal control failures. In November 2023, Shanghai Honglu discovered a significant discrepancy between the quantity of zinc ingots shipped to three clients—Shijiazhuang Xianhe Trading Co., Ltd., Hebei Guonei Investment Group Co., Ltd., and Shanghai Kuanyu Trading Co., Ltd.—and the payments actually received, amounting to approximately 388 million yuan. This was primarily due to bribes accepted by individual staff during business operations, leading to the over-shipment of zinc ingots.
Furthermore, internal control incidents, such as the theft of 990 tons of zinc ingots and the misappropriation of 157 million yuan worth of cathode copper, were only disclosed in the 2024 annual report. These events impacted profits and losses by over 109 million yuan that year, causing a 25.18% year-on-year decline in 2024 net profit attributable to shareholders. Affected by internal control deficiencies and untimely information disclosure, Baiyin Nonferrous was placed under investigation by the China Securities Regulatory Commission (CSRC) in September 2025, further intensifying market concerns about its corporate governance.
Simultaneously, another factor affecting the 2025 performance was an increased loss from the fair value change of embedded derivative financial instruments formed through priced transactions, driven by market price fluctuations, which negatively impacted earnings compared to the previous year.
Public information shows that Baiyin Nonferrous was listed in 2017. Over the longer term, the company's revenue growth has been relatively stable, increasing from 56.634 billion yuan in 2017 to 86.787 billion yuan in 2024.
However, its net profit growth has been considerably more volatile. After achieving a net profit attributable to shareholders of 239 million yuan in 2017, profits hovered around 30 million yuan annually from 2018 to 2022. Although profits exceeded 100 million yuan in 2023, they fell back to 80.7917 million yuan in 2024. Overall, the company exhibits the characteristics of large revenue scale but weak profitability.
The weakness of Baiyin Nonferrous, being "large but not strong," is also reflected in its revenue structure. In the first half of 2025, revenue from non-ferrous metal trading accounted for 28.85% of the total, but this segment's gross margin has long been below 1%, contributing minimally to profits. Moreover, due to the nature of the business, it increases operational risks; Shanghai Honglu, which incurred significant losses, is the core entity for the company's trading business.
The gross margin for the core business of non-ferrous metal mining and smelting is relatively higher. However, the gross margin for cathode copper, the largest product by share, was -0.01% in 2024 and only 0.23% in the first half of 2025. The gross margin for zinc ingots, the third-largest product, was as low as -12.01% in the first half of 2025, indicating weak profitability for its core products.
Baiyin Nonferrous's core revenue still relies heavily on traditional smelting and processing, with profits heavily dependent on the prices of products like copper and zinc. Regarding the cost structure of ore raw materials, in 2024, the total cost of raw materials from the company's own mines accounted for only about 4.43%, while purchased raw materials constituted 95.57% of the cost. This makes the company's raw material costs highly susceptible to fluctuations in external ore and metal prices, putting profitability under pressure during downturns in processing fees.
To break through the profitability bottleneck of its traditional business, Baiyin Nonferrous has been expanding into the new materials and new energy industries, aiming to build a second growth curve. Currently, its equity-accounted investee, Gansu Defu New Materials Co., Ltd. ("Defu New Materials"), has established a production capacity of 70,000 tons for high-grade electrolytic copper foil, which meets the demands of new energy vehicle power batteries. Another investee, Baiyin Times Ruixiang New Material Technology Co., Ltd. ("Ruixiang New Materials"), has completed and put into operation the first phase of its lithium manganese iron phosphate (LMFP) cathode material project with a capacity of 20,000 tons, entering the core lithium battery materials supply chain. A further investee, Gansu Yinshi Zhongke Nano Technology Co., Ltd. ("Zhongke Nano"), whose main product is nano zinc oxide, saw the first-phase 5,000-ton nano zinc oxide production line commence trial production in July 2025.
However, these emerging businesses have not yet reached scale and are expected to contribute limited profits in the short term. In the first half of 2025, Defu New Materials, Ruixiang New Materials, and Zhongke Nano reported net profits of 77.0328 million yuan, -21.1735 million yuan, and -3.0945 million yuan, respectively.
Notably, Baiyin Nonferrous's debt problem is significant and cannot be overlooked. As of the end of the third quarter of 2025, the company's asset-liability ratio stood high at 65.91%, with interest-bearing debt accounting for over 30% of total assets. Interest expenses for the same period reached 355 million yuan, with the interest burden further exacerbating profitability pressures.
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