2025-08-25 03:24Summary of CMOC Group (3993.HK) Earnings Review Company Overview - Company: CMOC Group (3993.HK) - Industry: Basic Materials, specifically mining and production of copper and cobalt - Market Cap: HK$230.8 billion / $29.5 billion - Enterprise Value: HK$252.7 billion / $32.3 billion - 12m Price Target: HK$10.80 / Rmb13.00 Key Financial Highlights - 1H25 Net Profit: Rmb8.67 billion, up 60% YoY - EPS: Rmb0.405 per share, up 62% YoY - Recurring Net Profit: Rmb8.62 billion, up 52% YoY - Results: 8% below estimates due to higher COGS in DRC operations, but above Bloomberg consensus [1][2][30] Revenue and Profitability - Revenue: Rmb94.77 billion, down 8% YoY - Gross Profit: Rmb18.19 billion, up 8% YoY - Gross Profit from Mining: Rmb16.9 billion, up 18% YoY, but 16% below estimates due to lower copper and cobalt profits in DRC [22][30] - Trading Gross Profit: Rmb1.8 billion, up 8% YoY, 23% above expectations [23] Operational Performance - Copper Output: 354kt in 1H25, up 13% YoY, 4% above estimates - Cobalt Output: 61kt in 1H25, up 13% YoY, 6% above estimates - Unit COGS for Copper: Increased by 44% YoY to Rmb6,112 per ton, 33% above estimates - Unit COGS for Cobalt: Increased by 30% YoY to Rmb8,375 per ton, 20% above estimates [25][31] Future Outlook - Volume Guidance for 2025: Copper 600-660kt, Cobalt 100-120kt - Long-term Target: 800-1,000kt annual copper output and 90-100kt annual cobalt output by 2028E [27] Valuation and Investment Thesis - Revised Earnings Estimates: Increased by 5-9% for 2025-27E due to higher minor metal prices [2] - Expected Recurring Profit Growth: 38% in 2025E driven by rising copper prices [36] - Valuation Methodology: Based on historical P/B vs. ROE correlation, with a higher discount rate due to ESG risks [37] Risks - Commodity Price Risks: Weaker-than-expected prices for copper, cobalt, niobium, and phosphorus - Operational Risks: Sudden decline in ore grade and transportation issues - Project Execution Risks: Slower-than-expected project execution impacting growth - Currency/Country Risks: Associated with overseas assets - Hedging Operations: Risks in trading business [29] Conclusion - Recommendation: Maintain Buy rating on CMOC H/A shares, with a target price reflecting potential upside based on market conditions and operational performance [36]