CMOC GROUP LTD(3993.HK)：3Q25EARNINGS WELL ABOVE FORECAST

Core Viewpoint - CMOC's net profit for 3Q25 increased by 19% QoQ to RMB5.6 billion, significantly exceeding forecasts by 62% due to higher copper sales volume and a lower effective tax rate [1] Financial Performance - The company's copper sales volume decreased by 1% QoQ to 197.7k tonnes, but this was still 32% above forecasts due to a deviation from last year's seasonal pattern [2] - The effective profit tax rate was recorded at 27.5%, which is 9.5 percentage points lower than anticipated [2] - Cobalt sales were still recorded despite an export ban in the DRC, and trading profit surged 3.2 times QoQ, contributing to the strong earnings performance [2] Production Metrics - Copper output grew by 4% QoQ, while cobalt output fell by 12% QoQ, with the company continuing cobalt production despite the export ban [3] Future Earnings Expectations - Earnings are expected to surge by 42% QoQ in 4Q25, driven by a projected 10% increase in average LME copper prices and a rise in cobalt sales volume due to a secured export quota of 6.5k tonnes, which is 35% higher than 3Q25 sales [4] - A one-time gain of RMB1.5 billion from the disposal of a subsidiary in Xinjiang is also anticipated [4] Capital Expenditure and Growth Plans - The company plans to commence construction of Phase 2 of the KFM Mine in the DRC, with a capital expenditure of US$1.08 billion, which is 27% above previous forecasts [5] - This project is expected to add new capacity of 100k tonnes per annum of copper, with completion anticipated in the first half of 2027, at least six months ahead of prior estimates [5] Valuation Adjustments - The DCF-based target price has been raised from HK$13.91 to HK$15.56, reflecting increased earnings forecasts, equating to a 14.8x core 2025E P/E ratio [5]