Core Viewpoint - Luoyang Molybdenum's strong financial performance in the first three quarters of the year, with significant revenue and profit growth, indicates a robust operational capacity and strategic investments in expansion projects [1] Financial Performance - The company reported a revenue of 145.485 billion yuan for the first three quarters, with a net profit attributable to shareholders of 14.280 billion yuan, marking a year-on-year increase of 72.61% [1] - The third quarter alone saw a profit of 5.608 billion yuan, reflecting a substantial year-on-year growth of 96.40% [1] - Revenue from the mining segment reached 56.594 billion yuan, accounting for nearly 40% of total revenue, with the copper segment contributing 38.618 billion yuan, representing over 68% of the mining revenue [1] Investment and Expansion - The company's board approved an investment of 1.084 billion USD for the construction of the KFM Phase II project in the Democratic Republic of the Congo [1] - The project is expected to take two years to complete, with a target operational date in 2027, and aims to increase the ore processing capacity by 7.26 million tons per year, adding an average of 100,000 tons of copper metal annually upon reaching full capacity [1]

Investment Rating - The report maintains a "Buy" rating for CMOC Group (3993.HK) with a 12-month price target of HK$19.00, representing an upside of 17.3% from the current price of HK$16.20 [1][2]. Core Insights - CMOC reported a net profit of Rmb5.61 billion for 3Q25, reflecting a year-on-year increase of 96%, with earnings per share (EPS) rising to Rmb0.262, up 98% year-on-year [1]. - The recurring profit growth is expected to continue, driven by rising copper prices and volume growth, with a projected compound annual growth rate (CAGR) of 38% for 2025-26E [2]. - The company has revised its earnings estimates upward by 8-32% for 2025-27E, reflecting a positive outlook on copper prices and the impact of new cobalt export quotas from the DRC [2]. Financial Performance - For the first nine months of 2025, CMOC's recurring net profit reached Rmb14.1 billion, accounting for 75% of the full-year estimate [1]. - The company expects to achieve a copper output target of 1 million tons by 2028, supported by the Cangrejos gold/copper project, which is anticipated to further enhance earnings growth [2][29]. - The report indicates that CMOC's current H-share price implies a copper price of US$8,500/t, which is lower than the spot price of US$10,900/t, suggesting potential for price appreciation if targets are met [2]. Production and Operations - CMOC's copper output in the DRC reached 543kt in 9M25, a 14% increase year-on-year, while cobalt output was 88kt, up 3.8% year-on-year [26]. - The DRC government has introduced a cobalt export quota system, allowing CMOC to export 6.5kt for the remainder of 2025 and 31.2kt annually for 2026-27E, which is expected to improve gross profit for cobalt significantly despite lower sales volume [27]. - The acquisition of Lumina Gold for C$581 million is expected to enhance CMOC's net profit by 13.1% by 2030, with significant gold and copper reserves identified at the Cangrejos project [28]. Valuation Metrics - The report provides updated revenue and earnings estimates, with total revenue projected at Rmb213,028.7 million for 2024 and Rmb192,354.5 million for 2025E [6]. - The price-to-earnings (P/E) ratio is forecasted to be 9.2 for 2024 and 15.5 for 2025E, while the price-to-book (P/B) ratio is expected to be 1.8 for 2024 and 3.7 for 2025E [12]. - The report indicates a free cash flow yield of 19.6% for 2024, which is expected to decrease to 6.6% in subsequent years [12].

Summary of CMOC Group Ltd Conference Call Company Overview - **Company**: CMOC Group Ltd (3993.HK) - **Industry**: Greater China Materials - **Market Cap**: US$49.825 billion - **Stock Rating**: Overweight - **Price Target**: HK$18.60, representing a 15% upside from the current price of HK$16.20 Key Financial Results - **3Q25 Performance**: - Net profit of Rmb5.8 billion, up 99% YoY and 19% QoQ, exceeding market expectations [1][2] - 9M25 net profit reached Rmb14.3 billion, a 70% increase YoY [1] - **Production and Sales Volume**: - Copper production was 190kt, a 17% increase YoY and 4% QoQ [7] - Sales volume for copper was 198kt, up 24% YoY but down 1% QoQ [7] - Cobalt sales volume decreased to 4.8kt from 22kt in 2Q25, with a gross profit of approximately Rmb383 million [7] Strategic Developments - **KFM Phase 2 Construction**: - Announced a construction plan expected to take 2 years, targeting production commencement in 2027, with an additional 100kt/yr copper production capacity at full capacity [2] - Total capital expenditure for this project is estimated at US$1.084 billion [2] Tax and Financial Metrics - **Effective Tax Rate**: - Reduced to 27.5% in 3Q25 from 37% in 2Q25 and 42.8% in 3Q24, contributing positively to net profit [7] - **Financial Expenses**: - Decreased significantly to Rmb50 million in 3Q25 from Rmb444 million in 2Q25 and Rmb816 million in 3Q24, likely due to foreign exchange gains [7] Guidance and Future Outlook - **EPS Estimates**: - Projected EPS for FY25 is Rmb0.78, with further increases expected in subsequent years [4] - **Revenue Growth**: - Assumed annual revenue growth of 2% beyond the explicit forecast period [8] Risks and Considerations - **Upside Risks**: - Stronger-than-expected metal prices in 2025 and copper output exceeding company guidance [11] - **Downside Risks**: - Potential decline in cobalt prices due to weak demand from industrial sectors and domestic electric vehicles [11] Conclusion - CMOC Group Ltd has demonstrated strong financial performance in 3Q25, with significant year-over-year growth in net profit and production volumes. The company's strategic initiatives, including the KFM Phase 2 project, position it for future growth, while a lower effective tax rate and reduced financial expenses enhance profitability. However, potential risks related to metal prices and demand fluctuations should be monitored closely.

Group 1 - The U.S. stock market reached new highs last week, with the Nasdaq and Dow Jones both rising over 1%, and Micron Technology increasing nearly 6% [1] - The U.S. September CPI year-on-year was 3%, lower than expected, and the core CPI was also 3%, indicating potential easing of inflation concerns [1] - The European rating agencies downgraded the U.S. sovereign credit rating, reflecting concerns over fiscal stability [1] Group 2 - The China Securities Regulatory Commission is focused on enhancing the resilience and risk resistance of the capital market [1] - The People's Bank of China conducted a 900 billion yuan MLF operation with a one-year term on October 27 [1] - Guizhou Province's energy bureau director Chen Hua has been appointed as the chairman of Moutai Group [1] Group 3 - Dongfang Fortune reported a net profit of 3.53 billion yuan for the third quarter, a year-on-year increase of 77.74% [1] - Guoxuan High-Tech's net profit for the third quarter was 2.167 billion yuan, a year-on-year increase of 1434.42% [1] - Luoyang Molybdenum plans to invest 1.084 billion USD in the construction of the KFM Phase II project in the Democratic Republic of the Congo, which is expected to add an average annual production of 100,000 tons of copper metal upon reaching full capacity [1]

Major Events - Cambridge Technology (06166) sets the offer price for H-shares at HKD 68.88 per share [1] - Sany Heavy Industry (06031) sets the offer price for H-shares at HKD 21.30 per share [1] - Hengrui Medicine (01276) receives approval for the launch of HR20031 tablets [1] - Shanghai Pharmaceuticals (02607) subsidiary becomes the holder of the marketing authorization for amisulpride orally disintegrating tablets [1] - Fosun Pharma (02196) receives registration approval for Delarobert tablets and Delarobert granules [1] - WuXi AppTec (02359) plans to sell 100% equity of Kande Hongyi and Jinshi Medicine [1] - Hengfu Holdings (00643) receives a buyout offer at a discount of approximately 79.20% and will resume trading on October 27 [1] Operating Performance - Chifeng Jilong Gold Mining (06693) reports Q3 net profit of CNY 951 million, a year-on-year increase of 140.98% [1] - WuXi AppTec (02359) reports a net profit of CNY 12.076 billion for the first three quarters, up 84.84% year-on-year [1] - Huaxin Cement (06655) reports a net profit of CNY 2.004 billion for the first three quarters, a year-on-year increase of 76.01% [1] - Luoyang Molybdenum (03993) reports a net profit of approximately CNY 14.28 billion for the first three quarters, up 72.61% year-on-year [1] - Goldwind Technology (02208) reports a net profit of approximately CNY 2.584 billion for the first three quarters, a year-on-year increase of 44.21% [1] - CITIC Securities (06030) reports a net profit of approximately CNY 23.159 billion for the first three quarters, up 37.86% year-on-year [1] - Kingdee International (00268) reports annual recurring revenue of approximately CNY 3.86 billion from subscription services for the first three quarters, a year-on-year increase of about 18% [1] - China Nonferrous Mining (01258) estimates a profit of approximately USD 356 million for the first three quarters, a year-on-year increase of about 13% [1] - Chongqing Bank (01963) reports a net profit of CNY 4.879 billion for the first three quarters, a year-on-year increase of 10.19% [1] - China Resources Cement (01313) reports a profit attributable to shareholders of CNY 331 million for the first three quarters, a year-on-year increase of 7.3% [1] - China Shenhua Energy (01088) reports a net profit of CNY 41.366 billion for the first three quarters, a year-on-year decrease of 13.8% [1] - Haohai Biological Technology (06826) reports a net profit of approximately CNY 305 million for the first three quarters, a year-on-year decrease of 10.63% [1] - Great Wall Motors (02333) reports a net profit of CNY 2.298 billion for the third quarter, a year-on-year decrease of 31.23% [1] - China Heart and Heart Fertilizer (01866) reports a net profit of approximately CNY 800 million for the first three quarters, a year-on-year decrease of 47.86% [1] - China National Building Material (03323) reports a net profit of CNY 2.96 billion for the first three quarters [1] - GAC Group (02238) reports a net loss of approximately CNY 4.312 billion for the first three quarters, a shift from profit to loss year-on-year [1] - China Overseas Development (00688) reports revenue of CNY 103 billion and operating profit of CNY 13.15 billion for the first three quarters [1] - Haifeng International (01308) reports revenue of approximately USD 2.459 billion for the first three quarters, a year-on-year increase of approximately 16.6% [1] - China Energy Engineering (03996) reports a cumulative new contract amount of CNY 992.775 billion for the first three quarters, a year-on-year increase of 0.4% [1] E-commerce Performance - Li Ning (02331) reports high double-digit growth in its e-commerce virtual store business for the third quarter [2]

Investment Rating - The industry investment rating is "Positive" (maintained) [3][4] Core Views - The report highlights that copper prices are expected to experience high-level fluctuations in the short term, driven by supply disruptions and ongoing negotiations between the US and China [4] - Aluminum prices are on the rise due to continuous inventory depletion, while the alumina market remains in an oversupply situation [4] - Lithium prices are recovering from the bottom as demand increases during the peak season, with a notable decrease in inventory [4] - Cobalt prices are likely to continue rising due to the implementation of export quotas in the Democratic Republic of Congo, which may tighten supply [4] Summary by Sections 1. Industry Overview - The report indicates that the US CPI for September was lower than expected, which may influence market conditions [8] 2. Market Performance - The overall performance of the non-ferrous metals sector shows that the Shanghai Composite Index rose by 2.88%, while the non-ferrous sector increased by 1.13%, underperforming the index by 1.75 percentage points [11][12] 3. Valuation Changes - The TTM PE for the non-ferrous sector is 27.27, with a weekly change of 0.68, while the PB is 3.17, reflecting a 0.09 change [21][24] 4. Industrial Metals - Copper prices increased by 2.61% in London and 3.95% in Shanghai, with inventories decreasing [26] - Aluminum prices rose by 2.78% in London and 1.14% in Shanghai, with a notable increase in aluminum enterprise profits [36] - Lead and zinc prices also saw increases, with lead prices up by 2.00% and zinc by 2.48% [47] - Lithium prices for lithium carbonate rose by 2.79% to 75,400 yuan/ton, while lithium spodumene increased by 4.14% to 881 USD/ton [76] - Cobalt prices saw a significant increase, with MB cobalt rising by 7.75% to 22.60 USD/pound [89]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company has exceeded production and sales expectations, with significant cost reduction and efficiency improvements [1][5] - The KFM Phase II project is progressing smoothly, with an investment of $1.084 billion and expected completion in 2027 [2] - The company is expected to see revenue growth driven by increased production and rising metal prices, with projected revenues of 230.1 billion, 264.6 billion, and 285.7 billion yuan for 2025-2027 [5] Financial Performance Summary - For the first three quarters of 2025, the company achieved revenue of 145.5 billion yuan, a decrease of 5.99% year-on-year, while net profit attributable to shareholders increased by 72.6% to 14.28 billion yuan [1] - In Q3 2025, revenue was 50.7 billion yuan, down 2.36% year-on-year, but net profit rose by 96.4% to 5.61 billion yuan [1] - The company reported a significant reduction in operating costs, down 10.94% year-on-year [1] Production and Sales Summary - Copper production for the first three quarters reached 543,400 tons, up 14.14% year-on-year, with a completion rate of 86.25% [1] - The cobalt, molybdenum, tungsten, niobium, and phosphate production also exceeded targets, with completion rates of 79.98%, 78.60%, 85.71%, 78.41%, and 79.37% respectively [1] - The IXM trading segment achieved a physical trading volume of 3.3311 million tons, with a completion rate of 78.38% [1] Segment Performance Summary - In the copper-cobalt segment, Q3 copper production was 190,000 tons, with revenue of 12.9 billion yuan and a gross profit of 7.1 billion yuan [3] - The molybdenum segment reported Q3 production of 3,622 tons, with revenue of 1.7 billion yuan and a gross profit of 820 million yuan [4] - The niobium and phosphate segments reported revenues of 700 million yuan and 950 million yuan respectively, with gross profits of 460 million yuan and 290 million yuan [5]

Investment Rating - Industry rating: Recommended [3] Core Insights - The report emphasizes the strategic revaluation of key metals, particularly focusing on rare earths and cobalt [24] - Nickel prices are expected to be supported due to tightened supply expectations following Indonesia's new regulation reducing the approval cycle for mining plans from three years to one year [26][27] - Cobalt prices have continued to rise, with expectations of increasing supply tightness further driving prices up [30][33] - Antimony supply is expected to remain tight, providing a bottom support for antimony prices [34] - Lithium carbonate prices are projected to remain strong due to ongoing demand and inventory depletion [16] - China's dominance in rare earth supply is reinforced by stricter export controls, which are expected to support rare earth prices [18] - Tin supply remains uncertain due to ongoing challenges in overseas supply, which is expected to support tin prices [19] - Tungsten prices are supported by a tightening supply situation, with production rates slowing down [20] - Uranium supply tightness is anticipated to continue, supporting uranium prices [21] Summary by Sections Nickel and Cobalt Industry Update - Indonesia's new regulation on mining approvals is expected to tighten future ore supply, supporting nickel prices [26] - As of October 24, LME nickel price was $15,085 per ton, up 1.04% from October 17 [26] - Cobalt prices have risen significantly, with electrolytic cobalt reaching 408,500 CNY per ton, a 6.94% increase [30] Antimony Industry Update - Domestic antimony prices have decreased, but long-term supply tightness is expected to support prices [34] - China's antimony production is projected to dominate global supply, accounting for 60% of the total [34] Lithium Industry Update - Lithium carbonate prices have increased, with a market average of 73,700 CNY per ton as of October 24 [16] - Demand from the battery sector continues to drive price support [16] Rare Earth Industry Update - China's strict export controls on rare earths are expected to tighten supply and support prices [18] - The report highlights the importance of China's role in the global rare earth supply chain [18] Tin Industry Update - Tin prices are supported by supply uncertainties, particularly from Myanmar and Indonesia [19] - As of October 24, LME tin price was $35,925 per ton, up 2.42% from October 17 [19] Tungsten Industry Update - The tungsten supply situation is tightening, with production rates slowing down [20] - Prices for tungsten concentrate have increased, reflecting supply constraints [20] Uranium Industry Update - The report indicates a continued tight supply situation for uranium, supporting price stability [21] - Recent production guidance reductions from major suppliers are expected to impact future supply [21]

Investment Rating - Industry Rating: Recommended [4] Core Viewpoints - The report indicates that the CPI is lower than expected, which enhances the probability of interest rate cuts, leading to an upward trend in metal prices [28][44] - Precious metals are experiencing price fluctuations, with gold and silver prices showing a downward trend recently, but the long-term outlook remains positive due to macroeconomic factors [28][44] - The report highlights the ongoing geopolitical tensions and their impact on market dynamics, particularly in the context of U.S.-China trade relations and the potential for further economic negotiations [45][48] Summary by Sections Precious Metals - This week, COMEX gold fell by 3.30% to $4,126.90 per ounce, while COMEX silver dropped by 4.38% to $48.41 per ounce. SHFE gold decreased by 6.17% to ¥938.10 per gram, and SHFE silver fell by 7.49% to ¥11,332.00 per kilogram [28][30] - The gold price has increased over 60% this year, but recent fluctuations indicate a potential short-term correction as the market enters an overbought zone [44][48] - The report notes a significant reduction in holdings for major ETFs, with SPDR gold ETF decreasing by 9,186.33 ounces and SLV silver ETF by 89,770.80 ounces [30] Base Metals - In the LME market, copper rose by 3.21% to $10,947.00 per ton, aluminum increased by 2.81% to $2,856.50 per ton, zinc went up by 2.62% to $3,019.50 per ton, and lead climbed by 2.28% to $2,016.50 per ton [54] - SHFE market showed similar trends with copper up by 3.95% to ¥87,720.00 per ton, aluminum up by 1.51% to ¥21,225.00 per ton, zinc up by 2.48% to ¥22,355.00 per ton, and lead up by 3.05% to ¥17,595.00 per ton [54] - The report emphasizes that the supply of copper is facing challenges, with a projected production growth of only 1.4% in 2025, which is below the demand growth rate of approximately 3% [9][22] Small Metals - Magnesium prices decreased by 0.45% to ¥17,840 per ton, while demand remains stable, leading to a reduction in inventory levels [18] - Molybdenum and vanadium prices are under pressure, with molybdenum iron prices down by 2.12% to ¥27.75 per ton, reflecting cautious market sentiment [19] Investment Recommendations - The report suggests that the long-term outlook for gold remains positive due to ongoing concerns about global debt and monetary easing, with U.S. debt exceeding $38 trillion and projected budget deficits [20][49] - The report identifies several gold mining companies as potential beneficiaries of rising gold prices, including Chifeng Jilong Gold Mining, Shandong Gold, and China National Gold Group [20][49] - For silver, the report anticipates a supply shortage of approximately 3,660 tons by 2025, supporting a bullish outlook for silver prices [49]

Core Viewpoint - The appointment of Peng Xuhui as CEO of Luoyang Molybdenum Co., Ltd. is a strategic move aimed at enhancing the company's management capabilities and aligning with its development goals in the mining industry [4][5][6]. Group 1: Company Background - Peng Xuhui has extensive experience in advanced manufacturing, having served in various roles at Shentianma A since 2006, where he progressed from a research engineer to chairman [3]. - Luoyang Molybdenum is a leading global producer of tungsten, cobalt, niobium, and molybdenum, with significant copper production and a strong presence in mineral trading across multiple continents [6]. Group 2: Recent Developments - In Q1 2025, Luoyang Molybdenum achieved a turnaround with a net profit of 96.41 million yuan, marking a year-on-year increase of 7.25% [4]. - The company has been focusing on cost reduction and efficiency improvement, with a strategic shift towards lean management and platform capability development [4][5]. Group 3: Strategic Goals - Luoyang Molybdenum aims to produce 800,000 to 1 million tons of copper annually and is actively pursuing gold resource development [4]. - The company acknowledges its gaps in resource reserves, profitability, management, and talent development, emphasizing the need for organizational upgrades to compete globally in the mining sector [5]. Group 4: Financial Performance - Luoyang Molybdenum reported a net profit of 14.28 billion yuan for the first three quarters, a 72.61% increase year-on-year, surpassing the total profit for the previous year [6]. - The company's market capitalization reached 359 billion yuan, reflecting a 5.53% increase on October 24 [6].