Morgan Stanley has released a research report upgrading the target price for Zijin Mining Group Company Limited (02899.HK) H-shares from HK$55 to HK$61, while the A-share target for Zijin Mining Group Company Limited (601899.SH) has been raised from RMB 52 to RMB 58. The investment bank has designated the H-shares as a top sector pick with an "Overweight" rating.

The institution believes that Zijin Mining's production growth rates for copper, gold, and lithium are among the fastest in the large-scale mining sector, yet its valuation has not fully reflected the scale, diversification, and visibility of this growth. The report highlights that the company's compound annual growth rate (CAGR) targets for production from 2025 to 2028 are 12.5% for copper, 14.5% for gold, 128% for lithium, 14.2% for silver, and 39.7% for molybdenum.

Notably, the lithium business is rapidly emerging as a new profit driver. Production is expected to rise from 25,000 tonnes of LCE in 2025 to potentially over 300,000 tonnes by 2028. At the current lithium price of RMB 140,000 per tonne and a cost of approximately RMB 60,000 per tonne, the lithium segment is forecast to contribute a net profit of RMB 7 billion to 8 billion in 2026. Morgan Stanley argues that the market has yet to fully price in the potential of this lithium growth trajectory.

The analysis points out that Zijin Mining currently trades at a forecast 2026 price-to-earnings ratio of 11.3 times and an EV/EBITDA of 7.5 times. This valuation is attractive compared to global peers, whose EV/EBITDA ranges from roughly 7 to 15 times, especially when adjusted for the company's superior production growth rate relative to its competitors.