JP Morgan: The policy of replacing old with new this year continues to benefit the metal commodity market. We recommend buying Zijin Mining Group (02899) and others.

JPMorgan Chase released a research report stating that China's GDP is expected to grow by 5% year-on-year in 2025, meeting the target. The growth is mainly driven by the consumption stimulus brought about by the policy of replacing old with new. The bank believes that the main trends in the commodity market in 2025 will continue into 2026, with global demand-driven metals (such as gold, copper, lithium) continuing to outperform industries driven by domestic demand (such as coal, steel). In addition, supply disruptions and accelerated industry consolidation will continue throughout the year. Looking ahead, the bank expects the subsidy policy for replacing old with new to continue until 2026. Although incentives will be more targeted and focused on efficiency compared to 2025, they will still provide substantial support for overall commodity demand. The bank's preference order for mainland basic materials industries in 2026 is gold and copper, followed by aluminum, lithium, coal, and steel. It is expected that the material sector will continue to outperform the MSCI China Index in 2026. The bank recommends investors to buy Zijin Mining Group (02899, 601899.SH) and take advantage of low prices to acquire Aluminum Corporation Of China (02600, 601600.SH) and CHINAHONGQIAO (01378). CMOC Group Limited (03993) may take a break as it issues convertible bonds.