-- CMOC Group's (SHA:603993, HKG:3993) attributable profit almost doubled in the first quarter as it implied ample copper and sulfur supply amid the Middle East conflict.
The copper and cobalt producer's profit attributable to shareholders jumped 97% to 7.76 billion yuan from 3.95 billion yuan a year earlier, according to the company's earnings report published on the Hong Kong Stock Exchange on April 24.
Earnings per share doubled to 0.36 yuan from 0.18 yuan.
Operating revenue climbed 44% to 66.4 billion yuan from 46 billion yuan in the previous year.
In a Sunday note, Jeffries recommended that CMOC is a good buy for investors as its first-quarter earnings were "decent," with most of the figures in line with expectations.
The company's output of 187,880 tons of copper during the quarter was also in line with Jeffries' estimate.
CMOC earned 15.8 billion yuan from the sale of sold 182,177 tons of copper during the period, with the revenue increasing 27% from the same period a year earlier, the company disclosure showed.
Jefferies also predict that the company will have sufficient sulfur supply until the third quarter amid the Middle East war affecting global sulfur supply. Besides, CMOC implicated it has copper sufficiency after its TFM mine in the Democratic Republic of Congo received a Class A registration certification from the London Metal Exchange.
"Stringent cost control remains on the agenda for copper to reduce the potential impact from higher sulfur cost," Jeffries said. "Higher profit contribution from minor metals, e.g. tungsten, also helps to support the bottom line."
China has been getting the upper hand when it comes to copper exports as markets began to shift sources for raw materials after the war in Iran started. In an April 9 report, Reuters said copper exports in the first two months of the year soared to 172,000 tons from the year-ago 49,000 tons.
However, copper imports slumped 25% to 454,000 tons during the January-February period, the media outlet said.