Results Review

1Q26 results in line with our expectations

CMOC Group (CMOC) announced its 1Q26 results: Revenue rose 44% YoY and 8.5% QoQ to Rmb66.4bn, and net profit attributable to shareholders grew 97% YoY and 28% QoQ to Rmb7.76bn. The firm’s 1Q26 results hit a new high, as metal prices rose and the gold segment began to contribute profit.

Mineral product prices rose across the board, with gold included in its product portfolio for the first time.

Output: The firm's copper output rose 10% YoY to 187,880t in 1Q26, completing 24% of the median of its 2026 guidance. Output of cobalt, molybdenum, tungsten, niobium, and phosphorus changed +0.3%, -5%, -17%, + 2%, and +7% YoY, completing 28%, 24%, 24%, 25% and 26% of the median of its 2026 guidance.

Gold was included in the firm’s product portfolio for the first time, with four gold mines in Brazil producing 43,027 ounces of gold from the transaction closing on January 23 through end-March, achieving 20% of the median of its 2026 guidance.

Sales volume: the firm's copper sales volume rose 47% YoY to 182,177t in 1Q26, mainly due to a low base in 1Q25, as part of TFM's mineral products were sold in the Democratic Republic of the Congo in 4Q24. In 1Q26, the firm's cobalt sales volume was 1,989t. Although the sales-to-output ratio was only 6.5%, it improved notably QoQ.

Prices: According to Wind, the average market prices of copper, cobalt, molybdenum, tungsten, niobium, phosphorus, and gold rose 37%, 119%, 418%, 20%, 9%, 17%, and 70% YoY (up 16%, 13%, 118%, 7%, 4%, 11%, and 18% QoQ.

Trends to watch

Acquisition of four gold mines in Brazil completed; “Copper-Gold Dual Core” strategy begins to gain traction.

Gold: On January 23, the firm completed the acquisition, through its controlling subsidiary, of a 100% interest in four gold mines owned by Canada-listed Equinox Gold Corp., thereby adding gold to its product portfolio. We expect the acquisition to support the firm in achieving its gold output targets and further enhance its resource reserves.

Copper: The firm expects Phase II of the KFM project to add 100,000t of annual copper capacity upon commissioning in 2027. The firm also plans to accelerate preparatory work for Phase III of TFM, moving toward a target copper production capacity of 800,000t–1mnt by 2028.

Financials and valuation

We keep our 2026 and 2027 earnings forecasts largely unchanged. A-shares are trading at 12.7x 2026e and 12.2x 2027e P/E, and H-shares are trading at 10.8x 2026e and 10.3x 2027e P/E. We maintain OUTPERFORM ratings for A- and Hshares. We keep our TPs unchanged at Rmb21.70 (14.5x 2026e and 13.9x 2027e P/E with 14.2% upside) for A-shares and HK$21.01 (12.5x 2026e and 11.9x 2027e P/E with 15.1% upside) for H-shares.

Risks

Falling metal prices; disappointing output; changes in overseas cobalt industry policies.