JINCHUAN INTL (02362) historical legacy event has finally been resolved, with the increase in the prices of copper and cobalt, opening up a pathway for higher performance.

After nearly a year of suspension, Jinchuan Group's flagship overseas resource development platform JINCHUAN INTL (02362) is about to return to the starting line of value restoration. With the release of the independent forensic investigation report, the market's suspicion surrounding the "overseas incident" has been largely cleared. According to the disclosure, about $144 million in funds was systematically misappropriated by the local financial team of the subsidiary Ruashi. In terms of the nature of the incident, this was a premeditated misappropriation plan orchestrated by a local financial team within the company, bypassing and exploiting existing regulatory rules. Currently, the specific resumption time of JINCHUAN INTL still awaits further confirmation, but given that this incident is a one-time historical legacy issue and the negative impact has been largely eliminated, it is expected that market attention will refocus on the company's fundamentals and growth prospects after the resumption of JINCHUAN INTL. It is worth noting that during the past year of suspension, JINCHUAN INTL's key growth engine, the Musonoi super large copper-cobalt mine, successfully commenced production at the end of 2025, driving the company's annual copper production to increase by 5.5% to 61,800 tons and cobalt production to increase by 26.9% to 1,085 tons. GMTEight believes that backed by Gansu Province's largest state-owned enterprise, JINCHUAN INTL is poised to become one of the most investment-worthy "potential stocks" in the Hong Kong resource sector after resumption. Currently, the logic of the global resource bull market is accelerating: on the supply side, there is a rise in resource nationalism and the "security premium" for strategic commodities such as copper, cobalt, and nickel continues to climb; on the demand side, the deepening energy transition, coupled with the booming AI infrastructure, is generating a significant amount of incremental demand. As a global producer of scarce high-grade copper and cobalt, JINCHUAN INTL holds quality assets such as Musonoi, and the timing of capacity release is opportune; furthermore, with the expectation of asset injection from Jinchuan Group after resumption, it will undoubtedly benefit significantly from this current commodity bull market, opening up potential for the revaluation of the company's value. Lightly armed, the trend of performance recovery is expected to strengthen According to the latest progress announcement of the independent forensic investigation disclosed by JINCHUAN INTL on March 15, the special investigative committee composed of all independent non-executive directors of the company entrusted independent forensic accountants to conduct a comprehensive review of payments made by the subsidiary Ruashi from January 1, 2016, to March 31, 2025. According to the investigation, out of the total payments of approximately $263.9 million reviewed, around $144 million were misappropriated by internal employees in an organized manner, constituting individual unlawful acts planned by a local financial team including the former Chief Financial Officer and former Finance Department Manager of Ruashi, who exploited existing regulatory rules maliciously. Previously, Ruashi had reported the case to the local court in the Democratic Republic of Congo, dismissing or suspending employees involved, and appointing internal monitoring consultants to strengthen internal control processes. As the investigation approaches completion, this historical legacy issue is about to turn the page, and the resumption trading of JINCHUAN INTL awaits only the completion of regulatory procedures. With a one-time risk clearing up, the market can now take the opportunity to reassess the long-term investment value of JINCHUAN INTL. While actively clearing up the above-mentioned historical legacy risks, JINCHUAN INTL's fundamentals continue to follow a stable and robust development trend. Data shows that in 2025, JINCHUAN INTL's mining operations produced 61,867 tons of copper, a 5.5% year-on-year increase; and produced 1,085 tons of cobalt, a significant 26.9% increase. This growth is attributable to the successful commencement of production of the core growth engine, the Musonoi super large copper-cobalt mine, at the end of 2025. In terms of resource endowment, the Musonoi project boasts an average copper grade of 3.4% and cobalt grade of 0.9%, both significantly higher than the existing Ruashi mine; with copper reserves of 606,000 tons and cobalt reserves of 174,000 tons, the scale surpasses the combined total of Ruashi and Kinsenda, two producing mines. After production, this will drive the company's copper production from approximately 60,000 tons to the 100,000-ton level. As the independent investigation has not yet been fully concluded, as of now JINCHUAN INTL has not published its full-year 2024 and interim 2025 performance. However, considering the trend of performance improvement in the first half of 2024, with copper and cobalt prices running at historically high levels in recent years, and JINCHUAN INTL's high-grade mineral resources in an orderly production process, it can be expected that the trend of performance recovery is bound to be further strengthened. Backed by Gansu's largest state-owned enterprise, with strong growth potential In the non-ferrous metal industry, resources are king, and this is the undeniable truth of the ups and downs. As the only overseas resource development flagship platform of Jinchuan Group, JINCHUAN INTL is likely to become a highly elastic value target in this round of the resource bull market. The growth certainty of JINCHUAN INTL first comes from the strong backing of its controlling shareholder, Jinchuan Group. Data shows that Jinchuan Group ranks second in the world in nickel production, fourth in cobalt production, first in platinum group metal production in Asia, and third in copper production domestically. Such a world-class mining giant positioning JINCHUAN INTL as the sole overseas resource flagship platform speaks to the high level of importance placed on the latter. Of particular note is that Jinchuan Group also holds a large number of high-quality assets overseas, such as the Indonesia red soil nickel mine. With the complete clearance of JINCHUAN INTL's historical legacy event risks and the return of value, the imagination space for future asset injections is opening up. After all, for Jinchuan Group, gradually injecting overseas assets into this listed platform is not only a natural path for resource integration, but also an important step in the securitization of state-owned assets. It is worth emphasizing that JINCHUAN INTL itself is full of potential. In addition to the already operational Musonoi, the company also owns the Lubembe project, which has a total copper resource of 1.909 million tons with a copper grade of 2%, including 1.9 million tons of copper resources, making it the largest mine in terms of resource quantity among existing mines owned by JINCHUAN INTL. It can be anticipated that with the release of Musonoi's capacity, the successive development of Lubembe will build a hierarchical development pattern for the company, ensuring long-term growth in the future. From the perspective of the capital market, although the specific resumption time of JINCHUAN INTL is uncertain at present, considering that the independent forensic investigation report has largely clarified the suspicions surrounding the Ruashi incident, the risk of the one-time historical legacy issue is nearing conclusion, and the lightly armed JINCHUAN INTL after resumption instead has significant potential for a great rebound. On one hand, as the core listing platform of Jinchuan Group, Gansu's largest state-owned enterprise, the company enjoys solid support at the government level. Gansu SASAC, as the actual controlling shareholder, provides strong resource coordination capabilities and asset protection guarantees, with minimal extreme delisting risk. Even during the suspension period, the core operation of the mining mountains was not affected, and international capital chose to strategically invest, which is a testament to the trust in its state-owned background. Just this month, the US professional investment institution Alternative Liquidity Index, LP initiated a partial tender offer for JINCHUAN INTL, intending to acquire a 5.3% stake and explicitly expressing long-term holding intentions, indicating that in the eyes of international professional investors, the value bottom line of JINCHUAN INTL is sufficiently solid. On the other hand, during the suspension period of JINCHUAN INTL, the global non-ferrous metal sector experienced a significant upward trend, and given the current international environment and the supply-demand situation of resources, the bull market trend is expected to continue for a long time. In this environment, with the backing of Jinchuan Group and possessing outstanding resource endowment and clear growth prospects, JINCHUAN INTL after resumption is undoubtedly worth long-term investor attention.