Core Insights - CMOC Group reported record high results for 3Q25, with net profit attributable to shareholders growing 73% YoY to Rmb14.3 billion, driven by increased sales volume and prices of metal products [1] Financial Performance - In 1–3Q25, revenue decreased by 6% YoY to Rmb145.5 billion, while net profit attributable to shareholders increased by 73% YoY to Rmb14.3 billion [1] - For 3Q25, revenue fell 2% YoY but rose 4% QoQ to Rmb50.7 billion, with net profit attributable to shareholders growing 96% YoY and 19% QoQ to Rmb5.6 billion [1] - Copper and cobalt output rose 14% and 4% YoY, respectively, in 1–3Q25, meeting 86% and 80% of the firm's annual guidance [1] Sales and Pricing - Copper sales volume increased by 11% YoY, while cobalt sales volume fell by 36% YoY in 1–3Q25, primarily due to a cobalt export ban from the Democratic Republic of the Congo [1] - Average prices for copper, cobalt, molybdenum, tungsten, niobium, and phosphorus rose by 4%, 15%, 7%, 30%, 8%, and 20% YoY, respectively, in 1–3Q25 [1] Strategic Developments - The firm announced the Phase II KFM project, targeting an annual copper production capacity of 800,000 to 1 million tons, expected to start production in 2027 [2] - A significant equity incentive plan was proposed to issue 393 million H shares to retain core talent [3] Market Dynamics - Tightening supply and demand dynamics are expected to push up cobalt prices, with the DRC's cobalt quota for 2026/27 accounting for 44% of its 2024 output [4] - The company holds the highest local market quota for cobalt, which is projected to account for 32% of the total local quota and 29% of its 2024 sales volume [4] Financial Forecasts and Valuation - Earnings forecasts for 2025 and 2026 have been raised by 26.6% and 32.0%, respectively, to Rmb20.67 billion and Rmb27.25 billion [5] - A-share stock is trading at 17.4x 2025e and 13.2x 2026e P/E, while H-share stock is trading at 15.4x 2025e and 11.5x 2026e P/E [5] - Target prices for A-shares and H-shares have been raised by 41% to Rmb20.4 and HK$19.7, respectively, implying a 21.6% upside [5]