CMOC(603993) 光大证券·2024-07-11 04:02Investment Rating - The report maintains a "Buy" rating for Luoyang Molybdenum (603993 SH) due to its strong growth potential and favorable valuation metrics [2][10] Core Views - Luoyang Molybdenum is positioned as a leading copper producer with significant growth potential, expecting copper production to increase from 390k tons in 2023 to 900k tons by 2028, a 129% increase [1] - The company's low valuation per ton of copper production (460k RMB/ton in 2024) compared to industry peers makes it an attractive investment [1] - Copper prices are expected to reach $12 000/ton by 2025 driven by supply-demand imbalances and strong demand from renewable energy sectors [1][7] Business Segments Copper and Cobalt - Copper production is expected to grow significantly with TFM and KFM projects contributing to a projected output of 550k tons in 2024 and 600k tons in 2025 [7][23] - Cobalt production is also expected to increase with 65k tons in 2024 and 67k tons in 2025 [7][23] Other Mining Segments - Tungsten and molybdenum production is expected to remain stable with molybdenum production projected to grow by 60-92% from 2023 to 2028 [25] - Phosphorus and niobium operations provide stable cash flow with phosphorus fertilizer production reaching a record high of 1 17 million tons in 2023 [27] Industry Analysis Copper Industry - Global copper demand is expected to grow driven by renewable energy (solar wind and electric vehicles) contributing 87% of incremental demand by 2025 [1][52] - Supply-demand imbalance is projected to widen with a deficit of 750k tons by 2025 [55] Cobalt Industry - Cobalt supply is expected to outpace demand but the surplus is projected to decrease from 12k tons in 2023 to 8 76k tons in 2025 [58][62] Tungsten Industry - Tungsten supply is constrained with limited new projects globally while demand is growing particularly in photovoltaic applications [64][71] Molybdenum Industry - Molybdenum supply growth is limited with China being the largest producer accounting for 42% of global production in 2023 [75][77]