With a series of policy combinations announced, Chinese assets have once again entered the global long-term funds' perspective, benefiting the Hong Kong stock market, which experienced a rapid surge in a short period of time. Even with subsequent corrections, as of November 1st, the cumulative increase is still 19% compared to the low point in September.

It should be noted that the current Hong Kong stock market has transitioned from a phase of general increase to a period of differentiation and adjustment. For a stable and healthy financial market, this is more reasonable, and it also poses higher demands on investors, namely how to find companies with greater certainty.

Obviously, more attention should be paid to companies with promising long-term growth potential at present.

jinchuan intl may serve as an observation sample, as its stock price soared over 7% on November 1st. Relative to short-term price changes, its long-term certainty from both price and volume aspects is more worthy of attention.

1. Copper prices, which are easy to rise and difficult to fall, enhance the long-term value of mining enterprises.

This year, copper price fluctuations have been affecting the market's sensitivity. Since the beginning of the year, influenced by expectations of the Fed rate cut, copper supply shortages, and low copper inventories, LME copper prices have risen all the way to a historic high of $11,104.5 per ton. Subsequently, recession expectations became the market's dominant trading sentiment, coupled with the high-level operation of copper prices, leading to a correction in copper prices.

However, benefiting from the Fed's increasingly clear rate cut pace, and the continued tight balance between copper supply and demand, copper prices have recently stabilized. Institutions have become more confident in the mid-term bullish outlook for copper prices.

goldman sachs, known as the "flagship of commodities," recently released a research report stating that the average price forecast for copper in 2025 has been raised to $10,160 per ton. Citigroup also expressed a similar view, believing that copper prices will reach $11,000 per ton in the next 6 to 12 months.

From an overall perspective, copper prices are influenced by two main attributes.

Firstly, it is the financial attribute. Despite many external interfering factors affecting it, the pace and extent of the Fed's interest rate cuts still have many variables, but overall, the trend of Fed's interest rate cuts is clear, providing long-term momentum for copper prices due to financial attributes.

Secondly, it is the commodity attribute. As one of the core industrial metals, the supply and demand relationship of copper is currently in a tight balance, and the widening trend of the supply-demand gap determines the characteristic of copper prices being easier to rise than to fall.

On one hand, driven by the transition to green energy and the AI ​​wave, the long-term demand for copper is increasing. According to the s&p global report, by 2035, the annual demand for copper will rise to 50 million tons, and by 2050 this number will increase to 53 million tons, which means exceeding the sum of the global copper consumption from 1900 to 2021.

On the other hand, the challenges faced by the copper supply side are becoming increasingly severe. According to data from the Changjiang Nonferrous Network, since 2017, the global supply growth rate of copper mines has been continuously declining, with a growth rate of only 1.18% in 2023.

Currently, most of the large copper mines in operation were discovered before 2010, and in recent years, it has been almost impossible to see the emergence of new large copper mines.

As global copper mines 'age,' their quality is also decreasing. According to Bloomberg's data statistics, the global copper ore grade has decreased from 1.23% in 2005 to 0.44% in 2023. Lower grades mean higher cash production costs, which also means that once copper prices fall sharply, mining companies are willing to cut production or halt production sufficiently, thus affecting the stable supply of global copper mines.

Therefore, the resonance of commodity attributes and financial attributes provides strong long-term support for copper prices to rise, which is also the key to the long-term value enhancement of Jinchuan Intl holding abundant copper mine resources.

Second, with huge reserves of resources, it brings more room for imagination.

Against the background of copper prices being easy to rise and hard to fall, the huge reserves of resources in Jinchuan Intl determine the long-term trend of central value enhancement of the company.

Currently, Ruashi and Kinsenda copper mines under Jinchuan Intl are the main sources of the company's revenue. In the first half of this year, the two mines provided approximately 0.0286 million tons of copper supply, with an estimated total annual output of about 0.06 million tons.

Recently, Jinchuan Intl announced that through its non-wholly owned subsidiary Ruashi SAS, it holds a 100% stake in the Musonoi project. Ruashi SAS has applied for a mining license renewal for the Musonoi project. The mining license expires on April 3, 2024, and has been successfully renewed for an additional 15 years until April 3, 2039.

According to the feasibility research report released in 2023, the estimated mine life of the Musonoi project is 16 years. This renewal will enable the group to engage in the production of electrolytic copper and cobalt hydroxide at the Musonoi project during the renewal period, fully realizing the expected mine life.

The Musonoi copper-cobalt project has copper resources of 1.085 million tons, copper reserves of 0.606 million tons, an estimated annual production of 0.0438 million tons of electrolytic copper, and is expected to start production next year. Based on this, linear extrapolation can bring a 60% increase in copper production next year.

As one of the future main mines, the extension of the mining license for the Musonoi project ensures the company's stable production capacity for the next decade. The extension of this mining license solidifies the foundation for this assumption.

Furthermore, in the foreseeable future, Lubembe copper project of Jinchuan Intl will become a bigger focus, with a resource volume of 1.9 million tons of copper, although there is currently no production plan in place.

More importantly, as the only overseas listed platform of Jinchuan Group, jinchuan intl is the best carrier to fully realize the value of Jinchuan Group's vast overseas mineral resources.

On the one hand, new policies like the 'nine national initiatives,' 'eight measures for the star market,' and 'six guidelines for mergers and acquisitions' have been successively introduced. Mergers and acquisitions have become an effective way for many enterprises to enhance their overall competitiveness. As a large mining enterprise under Gansu State-owned Assets Supervision and Administration Commission, Jinchuan Group still has many asset values such as Mexico copper mine project, South Africa Sway platinum mine, Zambia Munali nickel mine, Indonesia WP&RKA nickel-iron project, Koala Sea nickel-iron project, and Huanyu Gaobing nickel project that have not been fully tapped.

On the other hand, the stock price of jinchuan intl itself has been hovering at or below 1 Hong Kong dollar for a long time. Under the policy guidance of 'strengthening the market cap management of state-owned listed companies,' this situation should be changed.

Against the backdrop of the current wave of mergers and acquisitions, the idea of enhancing resource quantity through mergers and acquisitions has become more and more tangible for jinchuan intl.

III. Conclusion

In a market full of uncertainties, certainty itself is a very valuable asset.

If the company's value is seen as a range, then the long-term bullish trend of copper prices has increased the lower limit of jinchuan intl's value range. The vast resource reserves continuously elevate the upper limit of its value range, especially the significant expected difference brought by mergers and acquisitions under the empowerment of the parent company, providing jinchuan intl with high imagination space for its long-term growth.