Today (July 10th), the nonferrous metals sector rebounded from lower levels. The largest ETF by size tracking the same underlying index, the Huabao Nonferrous Metals ETF (159876), staged a strong rally today after hitting a new yearly low yesterday. Its intraday price surged over 3.3% and is currently up 2.31%.
With the sector at a low point and corporate earnings shining, capital is actively flowing into nonferrous metals. Data shows that the Huabao Nonferrous Metals ETF (159876) saw net inflows on four out of the last five trading days, accumulating 121 million yuan. Over a longer period, the ETF has attracted a total of 214 million yuan in the past ten trading days.
Among its constituent stocks, Shenhuo Co., Ltd. hit the daily limit-up, while Sirui Advanced Materials Co., Ltd. soared over 15%. Baoti Group Ltd. and Western Superconductor Technologies Co., Ltd. gained more than 7%, with Yunnan Aluminium Co., Ltd. and Western Mining Co., Ltd. also rising. Among the heavyweight components, Aluminum Corporation of China Limited advanced nearly 4%, China Molybdenum Co., Ltd. rose over 3%, and Zijin Mining Group Company Limited increased by more than 1%.
On the news front, Zijin Mining Group Company Limited disclosed its preliminary results for the first half of 2026 on the evening of July 9th. The company expects a net profit of approximately 39.1 billion yuan, representing a year-on-year increase of 68%. This performance improvement is primarily attributed to steady growth in the output of key mineral products, a significant year-on-year rise in product sales prices, and a substantial increase in profits from rare and precious metals.
Western Mining Co., Ltd. announced on the evening of July 9th that it expects net profit attributable to shareholders for the first half of 2026 to be between 4.0 billion and 4.3 billion yuan, a year-on-year growth of 114% to 130%. This change is mainly due to favorable market prices for nonferrous metals, with prices for copper, gold, and silver products rising compared to the same period last year.
Shenhuo Co., Ltd. stated on the evening of July 9th that it anticipates a net profit attributable to shareholders of 4.8 billion yuan for the first half of 2026, a 152.04% increase year-on-year. The primary reason for this earnings growth is the company's significantly enhanced profitability, driven by higher average selling prices for electrolytic aluminium and coal products alongside lower costs for key raw material alumina during the reporting period.
Fundamentally, among the 60 constituent stocks of the index tracked by the Huabao Nonferrous Metals ETF (159876), 11 listed companies had disclosed their 2026 interim results forecasts as of July 9th. All 11 companies are projected to be profitable and show expected growth. Zijin Mining Group Company Limited currently leads with an expected net profit of 39.1 billion yuan, while nine other companies, including Yahua Group Co., Ltd., Zhuzhou Smelter Group Co., Ltd., and Shengxin Lithium Energy Co., Ltd., expect their net profits to at least double.
HuaTai Securities points out that the recent sharp decline in A-share leading nonferrous metal companies is essentially due to valuation compression rather than damage to earnings per share (EPS). As of July 6th, the iFind consensus EPS forecasts for 2026 for relevant companies have been revised upward over the past 180 days, indicating sound profit expectations. The sector's oversold condition likely stems from valuation compression. As of July 3rd, the price-to-earnings ratios (PE-TTM) for the CSI Gold, Aluminium, and Copper sector indices are at the 11.7%, 5.1%, and 42.1% percentiles, respectively, since 2020. Relative to the overall A-share market's PE-TTM, they are at extremely low percentiles of 0.2%, 0.0%, and 0.1% since 2020. Coupled with easing tensions between the US and Iran, which is marginally repairing risk appetite, the commodity cycle for the A-share nonferrous sector remains strong while valuations are at historical lows. Compared to overseas valuations, the downside for A-share nonferrous leaders may be limited, with potential for significant upside, representing a typical high-risk-reward trading window.
HuaTai Securities notes that the nonferrous metals sector currently has relatively low valuations historically, exhibiting high-risk-reward characteristics. CITIC Securities believes that with significant changes in the external environment, the nonferrous metals sector, which was previously among the hardest hit, is poised for a rebound. Combined with interim earnings expectations, the duration and strength of this rebound could exceed previous ones.
Nonferrous Metals Sector Momentum Builds, "Super Cycle" Appears Inevitable
The Huabao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers sectors including copper, aluminium, gold, rare earths, lithium, tungsten, molybdenum, and tin. This broad coverage allows for better capture of the sector's overall beta movements. Additionally, this ETF is eligible for margin trading and securities lending, serving as an efficient tool for a one-stop investment in the nonferrous metals sector.
As of July 3rd, the Huabao Nonferrous Metals ETF (159876) had a latest size of 1.564 billion yuan, making it the largest ETF among the three products in the market tracking the same underlying index.
Note: The Huabao Nonferrous Metals ETF (159876) was previously known as the Nonferrous Metals Leaders ETF.
ETF Fee Information: When subscribing for or redeeming fund units, subscription and redemption agents may charge a commission of up to 0.5%. Fees for on-exchange trading are subject to the actual charges by securities firms. The ETF does not charge a sales service fee.
Risk Disclosure: The Huabao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index. The base date for this index is December 31, 2013, and it was launched on July 13, 2015. The composition of the index's constituent stocks is adjusted according to its rules, and its backtested historical performance is not indicative of future results. The constituent stocks mentioned herein are for illustrative purposes only; descriptions of individual stocks do not constitute investment advice in any form nor represent the holdings or trading动向 of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R3-Medium Risk, suitable for Balanced (C3) and above investors. Suitability matching opinions are subject to the sales institution. Any information appearing in this article (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for their own investment decisions. Furthermore, any views, analysis, or predictions in this article do not constitute investment advice to readers, and no responsibility is accepted for any direct or indirect losses arising from the use of this content. Fund investment carries risks. The past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest in funds with caution.
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