The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of Yunnan Jinxun Resources Co., Ltd. 雲南金潯資源股份有限公司 (the "Company") (a joint stock company incorporated in the People's ...

Investment Rating - The investment rating for CMOC is "Buy" with a target price of HK$20.60, indicating an expected total return of 22.0% including a dividend yield of 2.3% [6][8]. Core Insights - CMOC's net profit in 3Q25 exceeded market expectations, driven by a lower effective tax rate, realized cobalt sales, and strong minor metals prices [2]. - The company anticipates sustainable copper output growth due to technology upgrades, with a guidance of 0.8-1.0 million tonnes (mnt) for 2028E and the KFM phase 2 project expected to operate in 1H27E with an average output of 100,000 tonnes per annum (ktpa) [3]. - Copper production costs have decreased year-over-year in 9M25 due to increased output and cost control measures [4]. - Cobalt output is expected to remain stable despite potential adjustments in production methods, with a total cobalt quota of over 30,000 tonnes allocated for TFM and KFM projects in 2026E [5]. Financial Performance - CMOC's market capitalization is approximately HK$368.41 billion (US$47.40 billion) [6]. - The net financial expenses have decreased year-over-year in 9M25 due to the repayment of long-term debt [5]. - The DCF valuation methodology used yields a fair-value target price of HK$20.60, based on an 11% weighted average cost of capital (WACC) [8].

Core Viewpoint - The Democratic Republic of Congo (DRC), the world's largest cobalt producer, is set to end its months-long export ban and implement a strict export quota system starting October 15, 2023, which aims to manage cobalt supply and stabilize prices in the market [1][5]. Group 1: Export Quota Details - The new regulations allow mining companies in DRC to export slightly over 18,000 tons of cobalt for the remainder of the year, with annual export quotas set at 96,600 tons for 2026 and 2027 [2]. - This quota is significantly lower than DRC's projected cobalt production of nearly 220,000 tons in 2024, which accounts for about three-quarters of global output, indicating that future export quotas will not meet even half of the anticipated production [2]. Group 2: Quota Allocation and Adjustments - The export quotas will be calculated based on each company's historical export volumes, and 10% of the authorized export volume for 2026 and 2027 will be allocated for national strategic projects [3]. - The regulatory body, ARECOMS, retains the authority to adjust overall quotas based on market trends or the potential for local processing of cobalt hydroxide into higher-value products [3][4]. Group 3: Market Impact and Price Recovery - The export ban, initially implemented in February 2023 due to a price drop, has led to a price rebound of over 60% for cobalt, with prices for cobalt hydroxide more than doubling since the ban [5]. - The DRC's policy shift is interpreted as an effort to consolidate price recovery and establish market dominance, which will significantly impact the cost and supply chain strategies of global electric vehicle manufacturers and battery producers [5]. Group 4: Future Market Balance - The DRC government aims to achieve market balance through the new policy, with a target to reduce global cobalt inventories to approximately one month's demand [6]. - However, analysts warn that strict supply controls and high prices may drive battery manufacturers and automotive companies to accelerate the development of cobalt-free battery technologies, potentially diminishing DRC's strategic importance in the global cobalt market in the long run [6].