Goldman Sachs Financial News | According to a research report from CMB International, during the analyst meeting following CGN MINING's (01164) performance release, the management revealed some standards of a new three-year exclusive agreement with the parent company (2026-2028), including (1) fair market practices, (2) industry contract structures, and (3) expectations and requirements from independent shareholders, with the agreement expected to be signed in the fourth quarter of 2025.
The institution estimates that CGN MINING may maintain its current pricing mechanism (i.e., 40% fixed price + 60% spot price), but the fixed price may increase. On the other hand, management sees acquisition opportunities in regions such as Africa and Central Asia, targeting geographical diversification. Considering the future 15% dividend withholding tax and the recent decline in Uranium prices, the institution has lowered its 2025E/26E price assumptions by 18%/16% to $75/$83 per pound, and profit forecasts were adjusted downwards by 28%/35%. Nevertheless, the institution believes that the current large contract/spot price differential (which was $80/$65 per pound in February) will help limit further declines in spot prices.
Additionally, the institution expects that the company's relevant tax rates will decline under the new mechanism for mineral resource tax in Kazakhstan in 2026. The institution has lowered the Target Price based on net present value (NPV) from HKD 2.36 to HKD 2.18, maintaining a Buy rating.
