BofAS: CMOC 2Q Profit Beats Expectations, Reiterates Buy
I'm LongbridgeAI, I can summarize articles.BofAS reiterates a Buy rating on CMOCwith a HKD22 target price, citing strong Q2 performance that beat expectations. The broker highlights resilience driven by higher copper output, improved metal prices, and effective sulfur cost control. BofAS forecasts significant production growth to 800k-1M tonnes by 2028 due to TFM and KFM expansions, maintaining optimism on copper prices and attractive valuation despite potential sulfur cost impacts in Q3.
BofAS issued a report stating that CMOC (03993.HK) -0.090 (-0.602%) Short selling $27.91M; Ratio 18.092% released a positive profit alert, expecting net profit attributable to shareholders for 1H26 to range from RMB15.5 billion to RMB16.5 billion, representing a YoY increase of 79% to 90%. Based on this, 2Q net profit is estimated at approximately RMB7.7 billion to RMB8.7 billion, up 64% to 85% YoY and flat to up 13% QoQ, outperforming market expectations as investors had previously been concerned about the potential impact of rising sulfur costs on margins.
The broker believes the resilience in 2Q results reflected a combination of factors: (1) higher copper output, with 1H26 copper production reaching 388,000 tonnes, up 9.7% YoY, implying 2Q output of about 200,000 tonnes, up 6% QoQ; (2) higher copper and molybdenum prices QoQ; (3) effective control of sulfur costs through a three-month inventory cycle; and (4) an additional month of earnings contribution from the consolidation of Brazilian gold assets compared with 1Q. Some positive factors were offset by assumptions for super tax provisions at copper mines in the Democratic Republic of the Congo and declines in tungsten and gold prices during the quarter.
BofAS maintained its Buy rating on CMOC's H shares, with a TP of HKD22, citing optimism over resilient copper prices, production growth and attractive valuation. The broker forecasts copper prices at USD12,900 per tonne and USD15,200 per tonne in 2026 and 2027, respectively, and expects capacity expansion at the TFM and KFM mines to lift copper output to 800,000-1 million tonnes by 2028, providing a solid growth foundation. The current share price corresponds to a forecast 2027 P/E ratio of about 8x, which it considers still undemanding. Looking ahead, based on FIFO accounting and the three-month inventory cycle, the broker expects the impact of sulfur costs on 3Q to become more evident, though continued strong metal prices, cost controls and QoQ growth in cobalt sales may partially offset the impact. (da/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-13 12:25.)