In-depth interpretation of Tibet Ge Mining's (000408) Q1 2025 financial report: Investment income growth drives substantial YoY net profit growth

Tibet Ge Mining Co., Ltd. was listed in 1996. The Company’s core business encompasses the R&D, production, and sales of potassium chloride and lithium carbonate. It has consistently focused on the exploration, production, and sales of potash fertilizer, and has now grown into China’s second-largest potassium chloride producer. According to Tibet Ge Mining’s Q1 2025 financial report, the Company achieved revenue of RMB 552 million in Q1 2025, a slight YoY decline of 10.12%. Its non-recurring net profit amounted to RMB 750 million, up 29.80% YoY. The Company’s net profit for Q1 2025 stood at RMB 746 million, surging 41.47% YoY. Net cash flow from operating activities totaled RMB 104 million—while revenue declined slightly YoY, net cash flow from operations increased substantially YoY. I. Substantial YoY growth in investment income drives substantial YoY net profit growth 1. Operating revenue declined slightly by 10.12% YoY, while net profit surged 41.47% YoY In Q1 2025, Tibet Ge Mining’s operating revenue was RMB 552 million, down from RMB 614 million in the same period last year—a modest 10.12% YoY decline. Net profit reached RMB 746 million, up sharply from RMB 527 million in the prior-year quarter—a 41.47% YoY increase. The primary driver behind this substantial YoY net profit growth is as follows: Although core business profit for the current period stood at RMB 178 million—down from RMB 214 million YoY—the Company’s investment income surged to RMB 598 million, up from RMB 344 million YoY. 2. Core business profit declined 16.85% YoY Core business profit for Q1 2025 was RMB 178 million, down 16.85% YoY from RMB 214 million in the same period last year. Although gross margin improved slightly to 52.37%, up 2.23 percentage points YoY, operating revenue declined modestly by 10.12% YoY, resulting in a YoY decline in core business profit. 3. Non-core business profit surged YoY

Tibet Ge Mining’s strong Q1 performance: Robust earnings growth and shareholder returns underscore long-term certainty

If we first examine the path of the Company’s valuation re-rating from the secondary market perspective, Tibet Ge Mining’s performance over the past year has already delivered a relatively clear answer. In 2025, the Company’s stock price rose steadily, reaching an intraday high of RMB 87.68 per share in late December—setting a new all-time high—and delivering a cumulative annual gain of over 200%. The Company successfully joined the ‘RMB 100-billion market capitalization club’. Entering 2026, its share price has remained stable; as of the close on April 17, its total market capitalization stood at RMB 133.2 billion. Notably, Tibet Ge Mining has been included in several major market indices—including the SZSE 100 Index—with related adjustments taking effect formally on December 15, 2025. As one of the Shenzhen Stock Exchange’s core broad-based indices, the SZSE 100 Index’s inclusion reflects comprehensive recognition of Tibet Ge Mining’s market capitalization, liquidity, and sector representation. While its market capitalization has firmly stabilized above RMB 100 billion, Tibet Ge Mining remains committed to sharing development gains with investors through consistent cash dividends. Reportedly, in response to regulatory encouragement for listed companies to distribute dividends multiple times annually, the Company implemented another high-ratio dividend following its mid-year 2025 distribution. On April 17, Tibet Ge Mining announced a cash dividend of RMB 15.00 per 10 shares (tax-inclusive) to all shareholders, amounting to a total payout of RMB 2.35 billion. Combined with the mid-year 2025 cash dividend already distributed, the Company’s total 2025 cash dividends reached RMB 3.918 billion (tax-inclusive), delivering tangible value in fulfillment of its commitment to ‘dual improvement in quality and returns’. The convergence of a RMB 100-billion-plus market cap, inclusion in core indices, and high-ratio cash dividends reinforces the Company’s ‘certainty’ in the capital markets. Yet, ultimately, such recognition must be grounded in fundamentals—and the Q1 earnings beat serves precisely as the core underpinning for this logic. Potassium, Lithium, and Copper All Thriving: Driving Q1 Earnings Growth At the operational level, Tibet Ge Mining posted a strong ‘Q1 opening success’, primarily driven by synergistic performance across its three core businesses—potassium, lithium, and copper—establishing a multi-pillar profit structure. In 2025, the Company’s potassium chloride segment achieved full-year output of 1.0332 million tons and sales of 1.0843 million tons—robust production and sales momentum. Building upon continued optimization of market supply-demand dynamics, the Company effectively reduced costs through enhanced management efficiency and ongoing innovation in production processes, thereby boosting both revenue and gross margin for its potassium chloride business. Although the lithium salt segment operated amid industry-wide adjustment, the Company proactively managed temporary production suspensions and successfully resumed stable production. Full-year lithium salt output reached 8,808 tons, with sales of 8,957 tons; coupled with the recovery in lithium carbonate prices during Q4, this laid the foundation for a Q1 2026 earnings rebound. Meanwhile, the Company’s equity stake in Julong Copper continues to deliver sustained value. In 2025, its investment in Julong Copper generated investment income of RMB 2.782 billion—accounting for 72.23% of consolidated net profit—and rising 44.34% YoY. Following Phase II commissioning, Julong Copper’s daily production capacity will jump to 350,000 tons; upon completion of Phase III, it is expected to become the world’s largest copper mining and processing operation of the 21st century, with an estimated annual copper output of approximately 600,000 tons.

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