Morgan Stanley: MMG (01208) core earnings in line with expectations, maintains "neutral" rating.

Morgan Stanley released a research report stating that MMG (01208) announced its preliminary performance for 2025, showing that its core profit performance meets expectations, the company's operating fundamentals are improving, and maintaining its "Buy" rating with a target price of HK$10. MMG expects its core profit to reach $700 million to $730 million in 2025, in line with the bank's expectations. After a $280-$300 million impairment related to the Kinsevere project, the annual net profit is expected to be $500-$520 million. The impairment is mainly due to the local cobalt plant being in a maintenance status due to sales restrictions, unstable power supply, and uncertainty in local fiscal policies. The report also pointed out that MMG's other major mining areas, including Las Bambas and Khoemacau mines, are operating steadily with normal production. With the global copper supply tight and the U.S. dollar weakening, copper prices are expected to remain high, providing strong support for the company's overall profitability. The bank believes that despite short-term impact on net profit performance due to impairments, the company's core profit capability is strong, and major operational challenges have been gradually addressed through financial provisions and substantial improvement measures, with a clear trajectory for future profit growth. The bank maintains a positive view on MMG, expecting it to benefit from strong copper prices and improved operational efficiency.