【CITIC Securities Metals】Copper Price Impacting USD 14,000, Gold Price Stands Above USD 4,100, Seize the Rebound in Copper and Gold Sectors

English summary

At the stage of market sentiment warming and excessive macro pessimism reversing, copper and gold mining stocks have shown early signs of valuation repair, recovering from the freezing point of 9-10x to 10-11x, but still at a valuation trough. Copper price is again challenging USD 14,000 under low inventory and overseas mine disruptions, while gold price stands above USD 4,100. Price expectations (i.e., earnings expectations) are expected to resonate with valuation repair, bringing greater upside elasticity to copper and gold mining stocks. Potential macro shifts later can still help gold price continue to repair, while further inventory declines and improved fundamentals will bring new highs in copper price. Attach importance to overall allocation in copper and gold sectors. Targets with excess advantages under three logics: First, volume growth brings Q3 sequential growth (mainly copper), and Q4 and next year's excess growth expectations (both copper and gold). Second, purer business structure and relatively stable costs, with high deliverability of earnings elasticity. Third, those with more event catalysts. ...