淡水河谷（VALE US）：买入：首席执行官圆桌会议反馈

Issuer of report:HSBCSecurities (USA) Inc.View HSBC Global Research at:https://www.research.hsbc.comMAINTAIN BUYTARGET PRICE(USD)PREVIOUS TARGET(USD)12.5012.50SHARE PRICE(USD)UPSIDE/DOWNSIDE9.54+31.0%(as of27 May 2025)MARKET DATAMarket cap(USDm)41,049Free floatMarket cap (USDm)41,049BBG3m ADTV (USDm)303RICFINANCIALS AND RATIOS(USD)Year to12/2024a12/2025eHSBC EPS1.44HSBC EPS (prev)1.44Change (%)0.0Consensus EPS1.98PE (x)6.6Dividend yield (%)9.6EV/EBITDA (x)3.4ROE (%)16.952-WEEK PRICE(USD)Source:RefinitivIBES, HSBC estimatesJonathan Brandt, CFAAnalyst, GEMs ex-Asia Metals & Mining,Pulp & PaperHSBC Securities (USA) Inc.jon.brandt@us.hsbc.com+1 212 525 4499Gustavo Hwang*Analyst, GEMs ex-Asia Metals & Mining,Pulp & PaperBanco HSBC S.A.gustavo.hwang@hsbc.com+55 11 2802 3257Shilan Modi*, CFAAnalyst, Metals & MiningHSBC Bank Middle East Ltd, DIFCshilan.modi@hsbc.com+971 564 1212 04* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulationsEquitiesMetals & MiningBrazil05/2411/24Target price: 12.50High: 12.36 Low: 8.26 Current: 9.54 ◆◆◆ 63%VALE USVALE.K12/2026e12/2027e1.721.951.901.721.951.900.00.00.01.751.721.775.54.95.09.39.813.03.43.03.020.220.118.07.7010.8514.0005/25 2FinancialstatementsYear to12/2024a12/2025eProfit & loss summary(USDm)Revenue38,05636,971EBITDA14,84014,501Depreciation & amortisation-2,756-3,172Operating profit/EBIT12,08411,329Net interest-1,051-1,052PBT6,69610,492HSBC PBT6,69610,492Taxation-721-3,077Net profit6,1667,349HSBC net profit6,1667,349Cashflow summary(USDm)Cash flow from operations9,2539,822Capex-6,334-5,999Cash flow from investment-5,255-5,099Dividends-3,914-3,807Change in net debt238-812FCFequity2,9193,823Balance sheet summary(USDm)Intangible fixed assets10,51410,182Tangible fixed assets39,98444,462Current assets13,48117,158Cash & others4,9536,552Total assets80,15288,591Operating liabilities26,45028,216Gross debt15,50516,292Net debt10,5529,740Shareholders' funds33,40639,334Invested capital32,57637,034Ratio, growth and per share analysisYear to12/2024a12/2025eY-o-y % changeRevenue-8.9-2.9EBITDA-17.4-2.3Operating profit-17.4-6.2PBT-40.056.7HSBC EPS-21.119.4Ratios (%)ROIC27.823.5Keu10.210.2EV/IC (x)1.61.3ROIC/Keu (x)2.72.3REP (x)0.60.6ROE16.920.2EBITDA margin39.039.2Operating profitmargin31.830.6Net debt/equity30.624.0Net debt/EBITDA (x)0.70.7Per share data(USD)EPS Rep (diluted)1.441.72HSBC EPS1.441.72CFPS2.162.30DPS0.910.89Financials & valuation:Vale Valuation andrisksWe use a 50/50 blend of the fair values derived from our target EV/EBITDA multiple and DCFapproaches for each business.◆Ferrous minerals business: Our DCF value for the business ofcUSD51.0bn(unchanged)is derived using a WACC of 10.2% (unchanged) in USD terms, which is based on arisk-free rate of 3.75% (unchanged), equity risk premium of 5.5% (unchanged), weightedaverage country risk premium of c1.5% (unchanged), and unlevered beta of 1.05(unchanged). For our multiples-based value ofcUSD54.3bn(unchanged), we assume a 2025eEV/EBITDA multiple of 4.5x (unchanged), which is the five-year historical average for Vale.◆Nickel business: Our DCF value for the business ofcUSD2.4bn(unchanged) is derived usinga WACC of 10.2% (all assumptions are the same as for ferrous minerals). For our multiples-based value ofcUSD2.4bn(unchanged), we assume a 2025e multiple of 8.0x (unchanged), aslight premium to the sector average given the high-quality nature of the assets.◆Copper business: Our DCF value for the business ofcUSD12.8bn(unchanged) is derivedusing a WACC of 10.2% (all assumptions are the same as for ferrous minerals). For ourmultiples-based value ofcUSD16.0bn(unchanged), we assume a 2025e multiple of 8.0x(unchanged), a slight premium to the sector average given the high-quality nature of the assets.This blended approach results in an EV ofcUSD69.5bn(unchanged), from which we subtractnet debt and other items.Our fair value includes an assumed liability ofUSD4.5bn(unchanged)for the Brumadinho dam collapse and upstream dam decharacterization, and a liability ofUSD3.8bn(unchanged) for the Samarco dam and Renova foundation. Our 50/50 DCF/multiplesapproach results in our target price of USD12.50(unchanged).Our target price for the Vale ADR implies c31% upside and we maintain our Buy rating. We likethe company’s relatively strong FCF generation, attractive valuation, capital allocation, andexposure to base metals.Ourrounded target price for the Vale local share (VALE3 BZ, BRL53.84) is BRL70.00(unchanged), which is derived from our Vale ADR target price multiplied by HSBC’s FX team’s2025 year-end BRL FX assumption of 5.60 (unchanged).Vale: SOTPUSDmFerrous and others51,026Base metals15,142Nickel2,377Copper12,765Total EVNet debtMinority interest (MV)Investments/othersFair value of equityShares out. (diluted)-ADRFair value per share (USD)Source: HSBC estimatesDownside risks:Larger-than-expected environmental or socioeconomic remediation expensesdue to the Brumadinho dam collapse;