EBSCN·2025-07-22 05:31Investment Rating - The report maintains an "Increase" rating for the non-ferrous metals sector, indicating a projected investment return that exceeds the market benchmark index by 5% to 15% over the next 6-12 months [5]. Core Insights - In Q2 2025, the holdings of actively managed equity funds in the non-ferrous metals sector increased, with a notable rise in rare earth and minor metals [1][2]. - The total market value of heavy holdings in the non-ferrous metals sector reached approximately 70.4 billion yuan, representing 4.29% of the total heavy holdings of funds, an increase from 4.22% in Q1 2025 [1]. - The top ten heavy holdings are concentrated in copper, gold, and aluminum, with Zijin Mining remaining the largest holding at 22.8 billion yuan [1]. Summary by Sections Fund Holdings - The increase in holdings is primarily in rare earth and minor metals, with significant increases in stocks such as Guangsheng Nonferrous (largest increase in rare earth), Haotong Technology (platinum, palladium, rhodium recovery), and others [2]. - Conversely, reductions in holdings were noted in aluminum, gold, and certain processing stocks, with the largest decrease in Western Materials (titanium) [2]. Investment Recommendations - The report suggests that supply constraints will support price increases for rare earths, copper, and aluminum, while precious metals will benefit from weakened dollar credit and a rate-cutting cycle [2]. - Specific recommendations include: - Rare Earths: Favorable outlook for prices, with recommendations for Northern Rare Earth and Guangsheng Nonferrous [2]. - Copper: Limited supply growth, with a positive demand outlook in Q4 2025; recommended stocks include Jincheng Mining, Zijin Mining, and Luoyang Molybdenum [2]. - Aluminum: Anticipated supply constraints; recommended stock is China Hongqiao [2]. - Gold: Positive outlook due to weakened dollar credit and increasing ETF demand; recommended stocks include Zhongjin Gold and Chifeng Jilong Gold [2]. Key Company Earnings Forecast and Valuation - The report includes earnings per share (EPS) and price-to-earnings (PE) ratios for key companies, with all recommended companies rated as "Increase" [4]. - Notable companies include: - Zijin Mining: EPS forecast of 1.77 yuan for 2025, PE of 11 [4]. - Luoyang Molybdenum: EPS forecast of 0.62 yuan for 2025, PE of 14 [4]. - Jincheng Mining: EPS forecast of 3.61 yuan for 2025, PE of 13 [4].