Analyst Eunyoung Lee from DBS maintained a Buy rating on Jiangxi Copper Company (JIAXF – Research Report) and increased the price target to HK$20.00 from HK$16.00.
Eunyoung Lee has given his Buy rating due to a combination of factors including the strategic expansion of Jiangxi Copper Company and a projected increase in production capacity. As the largest refined copper producer in China, the company’s expansion into the downstream sector with the acquisition of Tpco Copper and Jiangxi Cable is poised to strengthen its copper processing business. Notably, the company is investing substantially in projects aimed at boosting production capacity, such as the new copper casting materials and an electfoil plant for EV batteries, which are expected to drive earnings growth in the medium to long term.
Moreover, Lee anticipates a positive outlook for the company due to an increase in copper and gold production volumes, coupled with higher expected prices for these metals. The guidance for an 11% increase in copper cathode production and an 8% rise in copper rod and processing products, alongside a 14% growth in gold production, suggests a robust earnings growth potential for 2024. Despite the decline in Treatment Charges (TC), which could negatively impact profits, the company’s long-term contracts for smelting operations mitigate this risk. These elements collectively underpin Lee’s optimistic Buy rating for Jiangxi Copper Company.
According to TipRanks, Lee is a 3-star analyst with an average return of 26.6% and a 100.00% success rate. Lee covers the Basic Materials sector, focusing on stocks such as China Molybdenum Co, Jiangxi Copper Company, and Freeport-McMoRan.
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Jiangxi Copper Company (JIAXF) Company Description:
Jiangxi Copper Co. Ltd. engages in copper mining and dressing; smelting and processing; extraction, and processing of precious and scattered metal, and sulphuric chemistry. Its products include copper cathode, gold, silver, sulphuric acid, copper rod, copper tube, copper foil, selenium, tellurium, rhenium, and bismuth. The company was founded on January 24, 1997 and is headquartered in Guixi, China.
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