CMOC GROUP LTD(3993.HK)：DOWNGRADE AS VERY HIGH COPPER PRICE REFLECTED IN SHARE PRICE

Core Viewpoint - CMOC's net profit increased by 60% year-on-year to RMB8.67 billion in the first half of 2025, driven by higher metal prices and reduced costs [1][2] Financial Performance - Realised prices for copper and cobalt rose by 24% and 45% year-on-year, significantly outpacing the average benchmark price increases of 4% and 6% respectively [2] - The sales volume for most products showed single-digit growth, while unit costs for cobalt, molybdenum, and niobium decreased by mid-to-high single digits [2] - Net interest expenses and fair value changes decreased by 44% and 62% year-on-year, respectively, contributing to improved profitability [2] Future Earnings Expectations - Earnings are expected to grow by 32% quarter-on-quarter in the second half of 2025, supported by higher metal prices and a projected RMB1.5 billion gain from a subsidiary disposal [1][3] - The average spot LME copper price is anticipated to rise by 3% quarter-on-quarter in the second half of 2025 [3] Valuation and Price Target - The target price has been raised from HK$8.49 to HK$10.74, reflecting increased earnings forecasts, with a valuation of 11.4 times the estimated core earnings for 2025 [4]