中国铜业转折点

EquitiesMetals & MiningChinaHoward Lau*, CFAAnalyst, China MaterialsThe Hongkong and Shanghai Banking Corporation Limitedhoward.h.b.lau@hsbc.com.hk+852 2996 6625Fred Wong*Associate, China Materials ResearchThe Hongkong and Shanghai Banking Corporation Limitedfred.wong@hsbc.com.hk+852 2822 1109Yaya Huang*AssociateGuangzhou* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/qualified pursuant to FINRA regulationsHSBC in Extel Survey 2025Thank you for your supportSee resultsIssuer of report: The Hongkong and ShanghaiBanking Corporation LimitedViewHSBC Global Researchat:https:/www.research.hsbc.com Key market dataExhibit 3: Comparison of Comex, LME, and SHFE copper future (USD/t)13,00012,00011,00010,0009,0008,0007,000Apr-24Jun-24Comex copper future (USD/t)Source: Bloomberg, HSBCExhibit 4: LME copper price versus 9othpercentile costUSD/t12,00011,00010,0009,0008,0007,0006,0005,0004,000202020212022Spot Settlement Price: LME Copper90th percentile - C1 + Sust Capex-90th percentile - Cash cost (C1)Source: Wind, Wood Mackenzie, HSBCExhibit 6: China copper inventory - SHFE+ Bonded (t)500,000400,000300,000200,000100,00020232024Source: Bloomberg, HSBC Copper prices reboundedfrom the trough in April, andComex future traded at a 25%premium on 9 July versusLME/SHFEaftertheannouncement of coppertariffsChile mined copperproduction and China coppercathode production show y-o-y growth as miners andproducers make meaningfulprofit from the elevatedcopper prices, while we seecontinuous shortage ofcopper concentrate, as spotTC/RC charges remained inthe negative zoneDivergence emerged inglobal copper inventories in1H25-LME copperinventories declined by 67%from c271kt to c90kt whileSHFE inventories droppedfrom 377kt in March to 126ktby June.However,Comexcopper inventories surged tothe highest level since 2018.from93ktto211kt.Weexpectthis to reverse with USimplementing tariff on copperimports. LMEand SHFE inventory hasstopped falling andrebounded slightly amid off.peak season demand. Source: Wind, HSBCExhibit 11: Comex speculative positionsoncopper150,000Contracts100,00050,0000-50,000-100,000-150,000202020212022202320242025Source: Bloomberg, HSBC We have not seen asignificant production cutamong Chinese smeltersdespite of the low TC/RCchargesApparent demand remainedstrong in China in the firstfive months of 2025 but maystart to decline due toseasonality Downstream demandindicatorsExhibit 14:Cumulative grid spend in China70040%60035%50030%25%40020%30015%20010%1005%0%Cumulative China grid spend (RMBbn)y-o-ySource: Wind, HSBCExhibit16:Windpowerinstallationtrend90160%80140%70120%60100%5080%60%4040%3020%200%-20%40%Wind annual cumulative installation (GW)y-o-ySource: Bloomberg, HSBCExhibit 18: EV penetration rate60%50%→ 51% *→ 53%42%*47%40%40%37%38%33%34%33% 35%40%30%36%37%26%20%10%0%—2022——2023—2024→2025Source: CPC Auto, HSBC Powerinvestmentandrenewables development arethe main drivers of copperdemand in China6 Summary of target price and rating changesZijin Mining H/A (2899 HK, CMP HKD20.70, Buy / 601899 CH, CMPRMB19.82, Buy)Valuation: We maintain our ratings and target prices for Zijin-H/A. For our valuation of the H-share, we use a target P/E multiple of 12.5x (unchanged) applied to our 2026e EPS estimate ofRMB1.68 (unchanged) based on an end-2026e HKD-RMB exchange rate of 1.11 (unchanged),arriving at our TP of HKD23.20 (unchanged).For our A-share target price, we use an A-H share premium of 10% (unchanged) and a targetP/E multiple of 12.5x (the same as the H-share). Our A-share TP is unchanged at RMB23.10.Our H- and A-share TPs imply c12% and c17% upside, respectively. We maintain our Buyratings on both share classes because we like Zijin's solid fundamentals from its stable earningsgrowth,strong operational capabilitywithrespecttoproductionand cost controls,andcontinuous acquisitions that help long-term resources and production growth. Furthermore, ahigher gold price is favourable to Zijin's earnings.prices; 3) geopolitical conflicts in overseas mines; 4) overambitious M&A transactions thatburden financials and pull up production costs; and 5) higher production costs due to inflation,CMOC H/A (3993 HK, CMP HKD8.44, downgrade to Hold from Buy /603993 CH, CMP RMB8.54, downgrade to Hold from Buy)Valuation: We downgrade CMOC-H/A to Hold (from Buy) with unchanged target prices ofHKD7.60 and RMB8.60, respectively. For our H-share target price, we use a target P/E multipleof 10.0x (unchanged), which we apply to our 2026e EPS estimate of HKD0.76 (unchanged)based on a HKD-RMB exchange rate of 1.05 (unchanged). For our A-share target price, we usean A-H share premium of 20% and a target P/E multiple of 10.0x (the same as for the H-share),which we apply to our 2026e EPS estimate of RMB0.72 (unchanged). Our H- and A-sharetargetprices imply10%downside and 1%upside,respectively.Downside risks to H/A shares: 1) Increases in new copper mine supply and copper scrap thatmore than offsets copper demand growth and,