BofA Securities: CMOC (03993) H1 Net Profit Exceeds Forecasts, 'Buy' Rating Reaffirmed

Stock Track
15 Jul

BofA Securities emphasized in its research report that CMOC's management anticipates Q2 2025 production costs will remain stable quarter-on-quarter while decreasing year-on-year. Copper production expenses at the TFM mine are projected between $5,500-$6,000 per tonne, whereas KFM operations are expected to maintain costs at $3,000-$3,500 per tonne. The firm reiterated its "Buy" recommendation on CMOC, setting an H-share price target of HK$8.5.

CMOC's profit alert indicates H1 net profit will reach 8.2-9.1 billion yuan, reflecting robust 51%-68% year-on-year growth. This performance aligns with BofA's projections and surpasses market expectations, achieving 58% of consensus full-year forecasts. The bank estimates Q2 net profit between 4.25-5.15 billion yuan—representing 27%-54% annual expansion and 8%-31% sequential improvement.

Profit growth stems primarily from dual catalysts: copper and cobalt price movements coupled with production escalations. Q2 copper averaged $9,538/tonne, dipping 2% year-on-year but edging up 2% quarterly. Cobalt hydroxide prices surged 61% quarter-on-quarter to 188,000 yuan/tonne. Simultaneously, H1 copper output climbed 13% to 354,000 tonnes while cobalt production matched this growth rate at 61,000 tonnes.

Q2 copper production hit 183,000 tonnes—a 10% annual and 7% quarterly increase—exceeding annualized guidance of 700,000 tonnes against full-year projections of 600,000-660,000 tonnes. This outperformance stems from continuous technical upgrades boosting capacity. Cobalt output reached 30,600 tonnes despite export restrictions in the DRC, rising 6% year-on-year and 1% quarter-on-quarter as operational resilience prevailed.

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