Summary of CMOC (3993.HK) Conference Call Company Overview - **Company**: CMOC (China Molybdenum Co., Ltd.) - **Industry**: Mining, specifically focusing on copper and cobalt production Key Points Financial Performance and Production Guidance - CMOC's copper output guidance for 2026 is set between **760,000 to 820,000 tons** [2] - The KFM phase 2 project, which will add **100,000 tons per annum (ktpa)** of copper capacity, is expected to commence operations in **2027** [2] Cost Management and Raw Material Consumption - The unit sulfur consumption is approximately **1 ton of sulfur per ton of copper output** [3] - Rising sulfur prices are anticipated to increase copper production costs in **2026**. CMOC plans to implement cost control measures, including reducing raw material consumption, to mitigate this impact [3] Cobalt Production and Export - Cobalt exports from the Democratic Republic of Congo (DRC) have resumed, but profit contributions in **Q1 2026** are expected to be limited due to a **2-3 month transportation period** [4] - CMOC aims to fully utilize its cobalt quota allocated for **Q4 2025 and 2026** [4] Capital Expenditure and M&A Strategy - Annual maintenance capital expenditure is projected at **RMB 4-5 billion**. The total capital expenditure for the KFM phase 2 project is approximately **US$1 billion** [2] - CMOC is considering acquisitions in mineral resources, particularly in gold and copper, and is open to minor metals. Post-acquisition, the company plans to enhance reserves through exploration and optimize operations to improve project NPV [5] Future Projects - CMOC is conducting a feasibility study for the **Odin mine gold project**, with expectations for it to be operational by **2029**. The management anticipates potential for higher annual gold output compared to previous studies [6] Valuation and Market Outlook - The target price for CMOC's H-share is based on a discounted cash flow (DCF) model, yielding a fair-value target price of **HK$28.30** [9] - Current market cap is approximately **HK$344.448 billion** (or **US$43.959 billion**) [7] Risks - Key risks that could hinder reaching the target price include: 1. Slowing grid investment in China 2. Worse-than-expected real estate investment in China, which could reduce copper demand and weaken prices 3. An acceleration in global mine supply [10] Investment Recommendation - CMOC is rated as a **Buy** with an expected share price increase of **75.8%** and a total expected return of **78.4%**, including a dividend yield of **2.7%** [7]

Core Viewpoint - In 2025, Luoyang Molybdenum Co., Ltd. achieved record-breaking performance with operating revenue of 206.68 billion yuan and net profit of 20.34 billion yuan, marking a significant year-on-year growth of 50.30% [1][3] Financial Performance - The company maintained operating revenue above 200 billion yuan for two consecutive years, with a total asset value surpassing 200 billion yuan, reaching 200.93 billion yuan [1] - The mining business revenue increased by 19% year-on-year, indicating strong internal growth potential [1][3] - The copper segment was a key driver of growth, with revenue of 55.10 billion yuan, accounting for 27% of total revenue and 71% of mining revenue [3] Profitability Structure - Despite a slight decline in overall revenue by 2.98%, net profit surged by 50.30%, reflecting a complete restructuring of profitability [3] - The copper business achieved a revenue increase of 31.63% year-on-year, with a gross margin improvement of 4.9 percentage points to 55.16% [3] - The company set a record in copper production at 741,100 tons, a year-on-year increase of 13.99%, ranking eighth among global copper producers [3] Cost Management - Operating costs decreased significantly by 11.56% to 157.23 billion yuan, outpacing the revenue decline [5] - Financial expenses dropped by 82.19%, from 2.88 billion yuan to 513 million yuan, primarily due to reduced borrowing costs and increased foreign exchange gains [5] Cash Flow Dynamics - The net cash flow from operating activities decreased by 35.64% to 115.44 billion yuan, indicating a divergence from net profit [6] - Inventory levels rose by 35.89% to 40.60 billion yuan, impacting cash flow due to increased trade guarantees [6] Strategic Expansion - In 2025, the company completed two significant gold mine acquisitions, establishing a new gold business segment [7] - The strategic shift towards gold and other metals is part of a broader diversification strategy, with a focus on expanding the product matrix [8] - The company plans to issue $1.2 billion in convertible bonds to optimize capital structure and support expansion efforts [8] Market Positioning - The company is adapting to a changing global mining landscape, characterized by supply constraints and rising metal prices [8] - The focus on small metals and the integration of copper-gold strategies will enhance profitability and operational efficiency [9]

Core Viewpoint - Luoyang Molybdenum (03993.HK) reported a revenue of 206.684 billion RMB for the year ending December 31, 2025, representing a year-on-year decrease of 2.98% while the net profit attributable to shareholders increased by 50.3% to 20.339 billion RMB, with basic earnings per share at 0.95 RMB [1] Financial Performance - The company's revenue for the fiscal year was 206.684 billion RMB, showing a decline of 2.98% compared to the previous year [1] - The net profit attributable to shareholders reached 20.339 billion RMB, marking a significant increase of 50.3% year-on-year [1] - Basic earnings per share were reported at 0.95 RMB [1]

Company Overview - CMOC Group Limited is a leading producer of copper, cobalt, molybdenum, tungsten, and tantalum, with significant operations in Asia, Africa, South America, and Europe[11]. - CMOC ranked 138th in the 2025 Fortune China 500 and 630th in the 2025 Forbes Global 2000 list[11]. - The company has established a global metal trading network covering over 80 countries, enhancing its market presence[29]. Financial Performance - Operating revenue for 2025 was CNY 206.68 billion, a decrease of 2.98% compared to 2024[13]. - Total profit for 2025 reached CNY 35.16 billion, an increase of 39.95% from 2024[13]. - Net profit attributable to shareholders was CNY 20.34 billion, up 50.30% year-over-year[13]. - Basic earnings per share for 2025 was CNY 0.95, reflecting a 50.79% increase compared to 2024[14]. - Weighted average return on equity increased to 26.61%, up 5.65 percentage points from 2024[14]. - The company reported a total of CNY -68.50 million in non-recurring gains and losses for 2025[17]. - The company achieved a net profit attributable to shareholders of RMB 20.339 billion in 2025, representing a year-on-year growth of 50.30%[32]. - The company’s overall operating income for 2025 was RMB 206.684 billion, a slight decrease of 2.98% year-on-year[51]. Production and Operations - Copper production reached 741,100 tons, a year-on-year increase of 13.99%[51]. - Cobalt production was 117,500 tons, with a year-on-year growth of 2.96%[51]. - The company plans to start gold production in 2026, expanding its product matrix[25]. - The company plans to produce between 76-82 million tons of copper metal in 2026, with cobalt metal production guidance set at 10-12 million tons[72]. - The company plans to expand KFM with an additional copper production capacity of 100,000 tons per year, expected to commence in 2027[55]. Strategic Initiatives - The company is actively expanding its gold resource segment as part of its growth strategy[11]. - The strategic focus includes a "copper-gold dual-polar" strategy to enhance growth through targeted acquisitions in Africa, South America, and Asia[21]. - The company aims to leverage technological advancements to reduce costs and improve efficiency in mining operations[20]. - The company aims to enhance copper production through technological improvements and expansion projects in Africa, targeting a stable increase in output[80]. Sustainability and ESG Practices - The company is committed to responsible mining practices, emphasizing sustainability and resource management[1]. - The company is committed to sustainable development, with a focus on ESG governance and community investment totaling RMB 4.88 billion[34]. - The company maintains a high standard of ESG practices, with a focus on responsible production in the metal value chain[31]. - The company has established a leading ESG management system, with nearly 200 carbon reduction projects underway across its mining areas, some achieving carbon reduction targets 2-3 years ahead of schedule, contributing to global sustainable development[89]. Governance and Management - The company maintains a strong governance structure with a diverse board of directors and various committees overseeing strategic and operational decisions[7]. - The board of directors includes experienced professionals with backgrounds in finance, engineering, and resource management, enhancing corporate governance and sustainable development[199][200]. Market and Economic Conditions - The global cobalt market shifted from oversupply to structural supply-demand imbalance, with global cobalt production decreasing by 3.4% to approximately 270,000 tons in 2025[64]. - The average price of copper in 2025 was $9,944.94 per ton, an 8.73% increase year-on-year, while cobalt prices surged 42.81% to $16.08 per pound[61]. - Recent domestic policies in China, such as the new Mineral Resources Law effective July 1, 2025, aim to optimize the mining business environment and promote high-quality, green transformation in the mining industry[185]. Risks and Challenges - The company faces risks from price fluctuations of key products such as copper, cobalt, and molybdenum, which are major profit sources, and is focused on maintaining low production costs to enhance economic efficiency[91]. - The company operates in regions with varying political and economic conditions, which may impact operations due to geopolitical and policy risks, and is committed to compliance and maintaining constructive relationships with stakeholders[92]. Shareholder Information - The total number of shareholders as of December 31, 2025, is 352,617, with the top ten shareholders holding a combined 75.56% of the total shares[172]. - The company plans to distribute a cash dividend of RMB 2.55 per 10 shares, totaling approximately RMB 5.46 billion for the fiscal year 2024[157]. - For the fiscal year 2025, the proposed cash dividend is RMB 2.86 per 10 shares, with an estimated total payout of RMB 6.12 billion, representing a cash dividend ratio of about 30.08%[158].

Core Viewpoint - Zhongyin International has raised the target price for Luoyang Molybdenum (03993) by 10.6%, from HKD 16.96 to HKD 18.76, and upgraded the rating from "Hold" to "Buy" [1] Financial Projections - The core earnings per share forecast for 2026-2027 has been increased by 7-9% [1] - Luoyang Molybdenum's profit is expected to increase by 50% year-on-year in 2025, reaching RMB 20.3 billion, aligning with the firm's predictions after accounting for unexpected hedging losses [1] - Earnings for 2026 are projected to rise by 71%, driven by increases in copper production, copper prices, tungsten prices, and contributions from newly acquired gold assets [1] Market Performance - The stock price of Luoyang Molybdenum has shown renewed attractiveness after a decline of 34% over the past four weeks [1]

Core Viewpoint - Zhongyin International has raised the target price for Luoyang Molybdenum (03993) by 10.6%, from HKD 16.96 to HKD 18.76, and upgraded the rating from "Hold" to "Buy" [1] Financial Performance - The company is expected to achieve a 50% year-on-year profit increase in 2025, reaching RMB 20.3 billion, aligning with the firm's core earnings forecast after accounting for unexpected hedging losses [1] - Earnings for 2026 are projected to increase by 71% year-on-year, driven by rising copper production, copper and tungsten prices, and contributions from newly acquired gold assets [1] Market Sentiment - After experiencing a 34% decline in stock price over four weeks, Luoyang Molybdenum's shares are now considered attractive again [1]

Investment Rating - The investment rating for the company is "Accumulate" [4] Core Views - The company achieved a revenue of 206.68 billion yuan in 2025, a decrease of 2.98% year-on-year, while the net profit attributable to shareholders increased by 50.30% to 20.34 billion yuan [3] - The production output exceeded the midpoint of guidance by 75%, with significant improvements in cobalt business gross margin [4][6] - The KFM Phase II project is progressing smoothly, and gold is expected to contribute to future growth [7] Financial Summary - In 2025, the company reported a revenue of 206.68 billion yuan, with a year-on-year growth rate of -3.0% [11] - The net profit attributable to shareholders for 2025 was 20.34 billion yuan, reflecting a growth rate of 50.3% [11] - The earnings per share (EPS) for 2025 was 0.95 yuan, with projections for 2026, 2027, and 2028 at 1.61, 1.74, and 1.94 yuan respectively [11] Production and Pricing - The production of copper, cobalt, molybdenum, tungsten, niobium, and phosphate increased by 13.99%, 2.96%, -9.68%, -14.17%, 3.23%, and 2.8% respectively [6] - Average prices for copper, cobalt, molybdenum, ammonium paratungstate, niobium iron, and monoammonium phosphate increased by 8.73%, 42.81%, 5.63%, 57.41%, 4.78%, and 14.53% respectively [6] - The gross margins for copper, cobalt, molybdenum, tungsten, niobium, and phosphate increased by 4.90 percentage points, 29.31 percentage points, 4.58 percentage points, 1.26 percentage points, 6.98 percentage points, and decreased by 0.31 percentage points respectively [6] Future Outlook - The company is expanding its gold resources, having completed the acquisition of 100% equity in Ecuador's Odin Mining and is in the construction phase, expected to be operational by 2029 [7] - The KFM Phase II expansion project is expected to be completed by 2027, adding a processing capacity of 7.26 million tons per year and an annual increase of 100,000 tons of copper metal [7] - The net profit forecasts for 2026 and 2027 have been raised to 34.41 billion yuan and 37.29 billion yuan respectively, with a new forecast for 2028 at 41.44 billion yuan [8]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6]. Core Insights - The company achieved a record net profit attributable to shareholders of 20.34 billion yuan in 2025, representing a year-on-year growth of 50.3% [1]. - Revenue for 2025 was 206.68 billion yuan, a decrease of 2.98% compared to the previous year [1]. - The company plans to distribute a cash dividend of 0.286 yuan per share (before tax) [1]. Performance Summary - Production volumes exceeded targets for key products in 2025, with copper production at 741,100 tons, cobalt at 117,500 tons, and molybdenum at 13,906 tons, achieving completion rates of 118%, 107%, and 103% respectively [2]. - The average LME copper price in 2025 was $9,944.9 per ton, an increase of 8.7% year-on-year, while the average price for MB cobalt rose by 42.8% to $16.1 per pound [2]. Growth Drivers - The company has acquired five gold mines, which are expected to become a new growth driver. The acquisition of Lumia Gold was completed in June 2025, and the company plans to start production at the Odin mine in Ecuador by 2029 [2]. - In December 2025, the company acquired 100% equity in four operating gold mines in Brazil from Equinox Gold, with expected production of 6-8 tons of gold in 2026 and a projected capacity of 20 tons by 2029 [2]. Profit Forecast and Valuation - The profit forecast has been revised upwards due to anticipated price increases for copper, gold, cobalt, and tungsten. Expected net profits for 2026 and 2027 are 34.26 billion yuan and 36.94 billion yuan, respectively, reflecting increases of 68.4% and 7.8% [4]. - The projected P/E ratios for 2026, 2027, and 2028 are 11, 10, and 8 times, respectively, indicating a favorable valuation outlook [4].

Core Viewpoint - The sell-side institutions have raised their profit expectations for Luoyang Molybdenum Co., Ltd. (LM) for 2026, projecting net profits to exceed 30 billion yuan, with the highest estimate nearing 37 billion yuan, driven by anticipated increases in copper and gold production and potential acquisitions [1][3]. Group 1: Profit Expectations - Multiple sell-side institutions have adjusted their profit forecasts for LM, with expectations for 2026 net profits exceeding 30 billion yuan [1]. - The highest profit estimate for 2026 is close to 37 billion yuan, while the lowest is above 31 billion yuan [1]. - The company is expected to maintain a net profit growth rate exceeding 50% for 2024 and 2025, with a profit base reaching 20.3 billion yuan by 2025 [1]. Group 2: Production Guidance - LM's president indicated that gold production is expected to be between 6 to 8 tons in 2026, with a target of achieving 8 tons [1][4]. - The copper production guidance for 2026 is set at 760,000 to 820,000 tons, showing a potential increase from 2025 [1][6]. - The company has successfully increased the processing capacity of its main mines, with TFM's daily processing capacity rising from 63,000 tons to 80,000 tons [6]. Group 3: Acquisitions and Growth Strategy - Following a significant acquisition in 2025, LM is open to new resource acquisitions in 2026, which could further enhance profitability [1][8]. - The company has made substantial investments in overseas gold mines, including approximately 2.98 billion yuan for the Cangrejos gold mine and 7.17 billion yuan for the Aurizona gold mine [3]. - The Brazilian gold assets are expected to contribute significantly to LM's profits, with potential profit increments in the tens of billions [5]. Group 4: Cost Management and Efficiency - LM has achieved an 11.56% reduction in operating costs in 2025, which is significantly greater than the 2.98% decrease in revenue during the same period [10]. - The company aims to enhance cost efficiency through improved recovery rates and operational efficiencies, with notable increases in recovery rates reported [9][10]. - The board emphasizes that mining competition is fundamentally a cost competition, influenced by resource endowment and operational management capabilities [11][12]. Group 5: Strategic Framework - LM has introduced a "622 model" to optimize cost advantages, where 60% is determined by resource endowment, 20% by project planning, and 20% by operational management [13][14]. - The company seeks to leverage its resource advantages into production and cost advantages, enhancing its overall competitive strength [14][15]. - LM is also focusing on building a standardized and efficient platform management system to improve project planning and operational capabilities [15].

Core Viewpoint - Luoyang Molybdenum Co., Ltd. is a significant player in the non-ferrous metal mining industry, focusing on the extraction and processing of various metals, including molybdenum, tungsten, gold, cobalt, and phosphorus, with a comprehensive integrated industrial chain [2][8][18]. Company Overview - Luoyang Molybdenum was established on December 22, 1999, and listed on October 9, 2012. The company is located in Luoyang, Henan Province, China [18]. - The main business segments include mining, smelting, deep processing, and trading of precious metals, with revenue contributions from refined metal product trading (48.56%), concentrate product trading (38.31%), copper (27.14%), cobalt (6.04%), molybdenum (3.12%), phosphorus (2.23%), niobium (1.88%), tungsten (1.17%), and others (0.11%) [18]. Production and Financial Performance - The company is the world's second-largest producer of cobalt and the largest producer of tungsten, as well as a leading producer of copper [2][3]. - In 2025, Luoyang Molybdenum is expected to achieve a revenue of 2066.84 billion yuan, a decrease of 2.98% year-on-year, while the net profit attributable to shareholders is projected to be 203.39 billion yuan, reflecting a growth of 50.30% year-on-year [9][18]. Recent Developments - The company has an 80% stake in the NPM copper-gold mine in Australia, with gold production guidance for 2023 set at 25,000 to 27,000 ounces, representing a year-on-year increase of 56% to 69% [2][12]. - Luoyang Molybdenum is also expanding its gold resources through the acquisition of Ecuador's Odin Mining (KGHM Gold Mine), with plans to commence production by 2029 [2][12]. Market Activity - On March 31, the stock price of Luoyang Molybdenum fell by 1.61%, with a trading volume of 35.31 billion yuan and a turnover rate of 1.16%, resulting in a total market capitalization of 3669.12 billion yuan [1][11]. - The main capital inflow for the day was -168 million yuan, indicating a reduction in principal capital over the past two days [4][5][14]. Technical Analysis - The average trading cost of the stock is 19.56 yuan, with the current price approaching a resistance level of 17.46 yuan. A breakthrough of this resistance could signal a potential upward trend [7][17].