Industry Outlook - Morgan Stanley projects that the MSCI China Materials Index will outperform the MSCI China Index by 65 percentage points in 2025, driven by supply dynamics [1] - The index is expected to continue its outperformance in 2026 due to supply disruptions and increased merger activities [1] - The preference order for the Chinese basic materials industry in 2026 is copper/gold, aluminum, lithium, coal, and steel [3] Company Performance - China Hongqiao's rating is maintained at "Overweight," with the target price raised from HKD 34 to HKD 40, citing its integrated model as a cost advantage [1][4] - Zijin Mining is highlighted as a top pick for 2026 due to its exposure to copper and gold [4] - Jiangxi Copper's rating is upgraded to "Neutral," despite a recent stock price increase of over 40% [4] - Baosteel's rating is downgraded to "Neutral," while Angang Steel's rating is downgraded to "Underweight" due to expected declines in steel profit margins [4] Supply Chain Dynamics - Ongoing supply disruptions include maintenance at South32's Mozal aluminum smelter and a strike at Capstone Copper's Mantoverde copper-gold mine, which is expected to reduce copper supply by 77,000 tons [2] - The lithium market is anticipated to tighten due to strong energy storage demand, with more supply expected to come online in the second half of the year [3]
小摩：2026年中国基础材料行业料保持强势 维持中国宏桥(01378)“增持”评级并上调目标价至40港元