The Zhitong Finance App learned that Jiangxi Copper Co., Ltd. (00358) fell by more than 3%. As of press release, it was down 2.28% to HK$23.98, with a turnover of HK$95.5018 million.
UBS released a research report stating that the target price of Jiangxi Copper shares was drastically lowered by 41.5% from HK$65 to HK$38, maintaining a “buy” rating. The bank lowered the target price-earnings ratio for the copper business from 12 times to 8 times the 2027 forecast, and lowered the 2026 and 2027 profit forecasts by 5% and 15%, respectively, mainly reflecting conservative assumptions about the average selling price of sulfuric acid and long-term contract processing fees, and declining profit visibility.
UBS maintains a constructive view on copper prices, believing that electrification, grid investment, and power infrastructure related to artificial intelligence are driving copper prices into a higher structural price range, while declining ore grades, long project development cycles, and limited capital expenditure limit supply-side responsiveness.
However, UBS pointed out that Jiangxi Copper Co., Ltd. covers a mixed business model of mining, smelting, and futures hedging, making it difficult for higher copper prices to directly and continuously turn into profits like mining companies with strong upstream growth. The company's quarterly profit is still affected by factors such as regional sulfuric acid pricing, copper concentrate procurement, changes in processing fees, differences in confirmation time between futures and physical profits, and non-recurring investment income.