Morgan Stanley: Raised the target price for Zijin Mining Group (02899) to HK$61, citing attractive valuation as a top industry choice.

Morgan Stanley released a research report stating that it has raised the target price for Zijin Mining Group (02899) H-shares from HKD 55 to HKD 61, and for Zijin Mining Group (601899.SH) A-shares from RMB 52 to RMB 58, classifying Zijin Mining Group H-shares as an industry preference with an "Overweight" rating. The bank believes that Zijin ranks among the top large mining companies in terms of growth rates for copper, gold, and lithium production; however, its valuation has yet to fully reflect its scale of growth, diversification, and visibility. The report indicates that Zijin's target compound annual growth rate for production from 2025 to 2028 is 12.5% for copper, 14.5% for gold, 128% for lithium, 14.2% for silver, and 39.7% for molybdenum. In particular, the lithium business is rapidly becoming a new profit engine, with production expected to increase from 25,000 tons of LCE in 2025 to potentially over 300,000 tons by 2028. With current lithium prices at RMB 140,000 per ton and costs around RMB 60,000, the net profit contribution from the lithium business in 2026 is projected to reach RMB 7 billion to RMB 8 billion. The bank believes that the market is currently underestimating the growth potential of the lithium business. Morgan Stanley's analysis indicates that Zijin is currently trading at a projected 2026 price-to-earnings ratio of 11.3 times and an EV/EBITDA of 7.5 times, making its valuation attractive compared to global peers (with EV/EBITDA ranging from approximately 7 to 15 times), particularly given its currently superior production growth after adjustments.