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China’s copper demand is still backed by the robust property completions, electric vehicle productions, ramp-up in grid investment and renewable energy installations, HSBC Global Research said in a research note.
That said, the market supply will remain ample due to production resumption at existing mines and incremental production from new mines and copper prices will remain range-bound, it said.
The broker preferred copper makers among metal shares and favored CMOC (03993.HK) . The H-share rating on the stock was upgraded from Hold to Buy, target price raised to HK$6 from HK$5.1, based on the assumption that the company will realize a significant earnings growth in the second half of the year owing to the recognition of sales of copper inventory from last year and new production this year as income.
Jiangxi Copper (00358.HK) was viewed the low beta play among copper shares amid steady copper price and limited growth in production volume, with target price lowered slightly to HK$16.2 from HK$16.8 and rating kept at Buy.
MMG (01208.HK)’s earnings somewhat improved in the first half of 2023 as pent-up inventories begin to convert into earnings, followed by a more notable improvement in the second half. The stock’s rating was kept at Buy and the target price was raised to HK3.45 from HK$3.65 to HK$3.45.