BofA Securities has reaffirmed its "Buy" rating on China Molybdenum (03993.HK) with an H-share target price of HK$8.50, citing stronger-than-expected first-half performance. The firm's management projects second-quarter production costs will remain stable quarter-over-quarter but decline year-over-year, with TFM copper production costs ranging between $5,500-$6,000/ton and KFM costs at $3,000-$3,500/ton.

CMOC's preliminary financial results indicate H1 net profit of 8.2-9.1 billion yuan, representing 51%-68% year-over-year growth that aligns with BofA's projections. This achievement reaches 58% of full-year market consensus estimates. Second-quarter net profit is estimated at 4.25-5.15 billion yuan, marking 27%-54% YoY and 8%-31% QoQ growth.

Profit growth drivers include: - Copper and cobalt price movements: Q2 copper averaged $9,538/ton (down 2% YoY, up 2% QoQ) while cobalt hydroxide surged 61% QoQ to 188,000 yuan/ton - Production expansion: H1 copper output reached 354,000 tons (+13% YoY) and cobalt production hit 61,000 tons (+13% YoY) - Q2 copper production reached 183,000 tons (+10% YoY, +7% QoQ), translating to annualized output exceeding 700,000 tons - surpassing the 600,000-660,000 ton annual guidance - Cobalt output maintained at 30,600 tons (+6% YoY, +1% QoQ) despite export restrictions in the Democratic Republic of Congo

Continuous technological upgrades enabled this production outperformance, with BofA emphasizing CMOC's operational resilience amid market challenges.