2025-12-01 00:49Summary of Earnings Estimates for China Commodities Industry Overview - The report focuses on the China commodities sector, specifically covering various sub-sectors including steel, coal, cement, aluminum, copper, gold, EV metals, paper, and agriculture. Key Points in Earnings Estimates Revisions - General Update: Earnings estimates for China commodities have been refreshed to reflect mark-to-market price changes for Q3 2025 and the current quarter. Target price changes range from -5% to +5%, with investment ratings remaining unchanged. The changes are not viewed as material, and the overall investment thesis remains intact [1][2]. Steel Sector - Baosteel and Maanshan-H/A: Earnings estimates cut by 3% to 5%. Loss estimates for Angang-H/A increased by 4% for 2025E [9]. Coal Sector - Shenhua-H/A, Yankuang-H/A, Chinacoal-H/A: Earnings estimates updated by -3% to +5% for 2025-27E based on recent coal price trends. Chinacoal-H/A target price adjusted to HK$6.5 from HK$6.4, maintaining a Sell rating [9]. Cement Sector - CNBM, WCC, BBMG-H/A, Conch-H/A, CRBMT: Earnings estimates updated by -5% to +3% for 2025-27E, reflecting recent unit gross profit trends [9]. Aluminum Sector - Chalco-H/A and Hongqiao: Earnings estimates adjusted by -5% to +5% for 2025-27E based on mark-to-market aluminum and alumina prices. Hongqiao target price fine-tuned to HK$20.0 from HK$19.6, maintaining a Neutral rating [9]. Base Metals (Copper and Gold) - Zijin-H/A, JXC-H/A, CMOC-H/A, MMG, Zhaojin: Earnings estimates updated by -5% to +5% for 2025-27E to reflect mark-to-market prices of copper and other metals [9]. EV Metals - Huayou and GEM: Earnings estimates adjusted by -3% to +5% for 2025-27E based on mark-to-market nickel/cobalt prices and cathode spreads. Huayou's target price fine-tuned to Rmb32.6 from Rmb32.4, maintaining a Sell rating [9]. Paper Sector - ND Paper and Sun Paper: Earnings estimates updated by 0% to 2% for 2025-27E to reflect mark-to-market paper prices [10]. Agriculture Sector - Hog and Feed Coverage: Earnings estimates revised by -5% to +3% for companies like Wens, New Hope, Haid, and Dabeinong, incorporating mark-to-market hog and feed prices. For animal health and conventional seeds, estimates revised by -5% to -2% [10][13]. Target Price Methodologies and Risks - Cement Companies: Target prices based on historical P/B vs. ROE correlations. Key risks include weaker-than-expected construction demand and slower unauthorized cement capacity exit [14]. - Base Metals: Target prices based on historical P/B vs. ROE correlations. Key risks include lower commodity prices and operational risks [14]. Additional Insights - The report emphasizes the importance of considering these estimates as part of a broader investment decision-making process, highlighting potential conflicts of interest due to Goldman Sachs' business relationships with covered companies [3]. This summary encapsulates the key updates and insights from the earnings estimates for the China commodities sector, providing a comprehensive overview of the changes and their implications for investors.