Zhijing Finance and Economics App has learned that Minsheng Securities has released a research report stating that the profits of non-ferrous metals in 2024H1 are impressive, with precious metals and industrial metals performing well. Industrial metal supply constraints continue, domestic policies drive demand, and the restructuring of the supply chain drives overseas demand, with the central tendency of metal prices expected to rise; energy metal supply pressure is increasing, waiting for a signal of clearance from the resource end. The Fed's interest rate policy has entered a transition period, and the gold price is ready to move. With the gradual decline of the US CPI, the focus of interest rate cuts is gradually shifting to employment data, and a US interest rate cut is imminent. Reviewing the trends during the same period in history, the gold price showed a tendency to oscillate and strengthen. With the start of the formal down cycle of the US economy and interest rate cuts in the medium and long term, the central tendency of gold prices is expected to rise further.

The overall situation of the non-ferrous sector since 2024. From the secondary market perspective, the overall increase of the non-ferrous metal sector from 2024 to the present (as of August 30, 2024) is 6.87%, ranking 7th in the sector; among them, the sector fell by 1.52% in 2024Q2, ranking 13th; in 2024H1, non-ferrous metals rose by 16.32%, ranking 5th in the sector. In the segmented sectors, the performance of gold and copper sectors has been better than other non-ferrous sectors since 2024.

Looking at the segmented sectors: 2024H1 has impressive profits, with precious metals and industrial metals performing well. (1) Precious metals: In 2024H1, the price of gold increased by 14.1% year-on-year, and the attributable net profit of the precious metals sector in 2024H1 increased by 44.10% year-on-year; the net profit attributable to the parent company in 2024Q2 was 3.373 billion yuan, an increase of 35.92% and 25.63% year-on-year and quarter-on-quarter, respectively. (2) Industrial metals: In 2024H1, the prices of aluminum/copper/zinc increased by 7.26%/9.85%/0.52% year-on-year, and the attributable net profits increased by 46.7%/30.4%/32.3% year-on-year. (3) Energy metals: In 2024H1, the prices of battery-grade lithium carbonate and lithium hydroxide dropped by 68.2% and 74.4% year-on-year; the prices of cobalt sulfate and cobalt oxide decreased by 21.8% and 23.6% year-on-year; and the price of electrolytic nickel dropped by 28.7% year-on-year. In 2023H1, the net profit of the lithium sector decreased by 120.0% year-on-year, while the net profit of the cobalt sector increased by 36.0% year-on-year, and that of the nickel sector increased by 23.2% year-on-year.

Investment recommendations: Bullish on copper, aluminum, and precious metal opportunities. (1) Industrial metals: Supply constraints continue, and domestic policies drive demand, coupled with the restructuring of the supply chain to drive overseas demand, the central tendency of metal prices is expected to rise. Copper: Financial constraints are easing, supply-side mine tightness continues, smelters are about to reduce production, the demand side supply chain restructuring drives overseas demand, domestic policy efforts, and demand are expected to recover, and the central price will continue to rise. Aluminum: Production capacity has reached its limit, and its long-term value can be expected. It is recommended to focus on CMOC Group Limited, Zijin Mining Group, Chinfmining, Aluminum Corporation of China, Chinahongqiao, Henan Shenhuo Coal & Power, and Yunnan Aluminium. (2) Energy metals: Supply pressure is intensifying, waiting for a signal of resource clearance. Lithium: Excessive supply over demand has led to a sharp drop in lithium prices, and the cost pressure of some high-cost projects is increasing. The industry's bottoming phase still needs to wait for a signal of production reduction representing mines. Cobalt: Clear signal of the bottom price of cobalt, cost pressure has led to the supply from Congo (Kinshasa) falling short of expectations. Under the strong domestic procurement, the bottom price of cobalt is expected to rebound. Nickel: The breakthrough in high-nickel-pure-nickel technology will resolve the structural contradictions. The release of pure nickel production is evident, and the depletion speed of nickel mines in Indonesia may be faster than expected. The scarcity of resources may soon become apparent. It is recommended to focus on Sinomine Resource Group, Ganfenglithium, Tianqi Lithium Corporation, Yongxing Special Materials Technology, Zhejiang Huayou Cobalt. (3) Precious metals: The Fed's interest rate policy has entered a transition period, and the gold price is ready to move. With the gradual decline of the US CPI, the focus of interest rate cuts is gradually shifting to employment data, and a US interest rate cut is imminent. Reviewing the trends during the same period in history, the gold price showed a tendency to oscillate and strengthen. With the start of the formal down cycle of the US economy and interest rate cuts in the medium and long term, the central tendency of gold prices is expected to rise further. In addition, the major global economies have implemented excessive currency issuance after the epidemic. To stabilize their own currency values and exchange rates, the central banks of various countries have continuously increased their gold purchases. In addition to the pace and magnitude of the US rate cuts, the central bank's gold purchases will also be an important variable affecting gold demand, further supporting the central tendency of gold prices to move upward.

Recommend focusing on Zhongjin Gold Corp.,Ltd (600489.SH), Shandong Gold (600547.SH), Chifeng Jilong Gold Mining (600988.SH), Zhaojin Mining (01818), Inner Mongolia Xingye Silver&Tin Mining (000426.SZ), Shengda Resources (000603.SZ), and other gold and silver targets.

Risk warning: Sharp declines in metal prices, lower-than-expected terminal demand, and overseas economic recession.