HTSC·2026-01-22 04:30Investment Rating - The report maintains a "Buy" rating for the company [1][5][7] Core Views - The report is optimistic about the company's value enhancement due to three main reasons: the anticipated upcycle in copper and gold prices, the company's strong growth potential as a leading player in the non-ferrous metals sector, and the expectation of a revaluation of gold's worth [1][3][4] - The company is projected to experience significant growth in net profit, with expected increases of 57% and 23% for the years 2026 and 2027, respectively [1][5] Summary by Sections Financial Performance - The company forecasts a net profit of RMB 131-141 billion for Q4 2025, with a non-recurring net profit of RMB 134-144 billion, reflecting a growth aligned with rising metal prices [2] - The company achieved a copper production of 1.09 million tons in 2025, slightly below the initial guidance of 1.15 million tons, while gold production reached 90 tons, exceeding the guidance of 85 tons [2] - For 2026, the company plans to produce 1.2 million tons of copper and 105 tons of gold, with a compound annual growth rate (CAGR) of 8-10% for copper and gold production from 2024 to 2028 [2] Price Outlook - The report anticipates gold prices to rise to $4,800 per ounce in 2026, driven by a diversification of foreign exchange reserves and a potential decline in U.S. real interest rates [3] - For copper, prices are expected to exceed $15,000 per ton from 2025 to 2028, supported by limited supply growth and increasing demand driven by U.S. inventory and infrastructure development [3] Valuation - The company's valuation is comparable to that of copper stocks, with a projected price-to-earnings (PE) ratio of 21X, while the average PE for comparable A-share copper stocks is 22X and for gold stocks is 29X [4][5] - The report suggests that the company's gold valuation is likely to be reassessed positively [4] Target Price - The target price for the company is set at RMB 62.40 and HKD 66.03 for A and H shares, respectively, based on a PE of 18/23X for 2026 [5][7]