1H26 Might Be Dragged by Trading Loss

Research evidence excerpt

1H26 Might Be Dragged by Trading Loss

Update

July 21, 2026 04:11 PM GMT

Morgan Stanley Asia Limited+MCGN Mining Co Ltd | Asia Pacific Chris Jiang

Equity Analyst

1H26 Might Be Dragged by Chris.Jiang@morganstanley.comRachel L Zhang +852 3963-1593

Rachel.Zhang@morganstanley.com +852 2239-1520

Trading Loss Hannah Yang, CFA

Hannah.Yang1@morganstanley.com +852 2239-7079

Potential negative trading gross profit in 1H26: CGN Mining noted that the

Cynthia Tang

weighted average cost of inventories on the book was higher than the ASPs of sales Research Associate

contracts executed during 1H26, adversely affecting its trading gross profit. As well, Cynthia.Tang@morganstanley.com +852 3963-4360

some off-take sales will be deferred to 2H26 due to delivery schedule, which

management do not expect to have a material adverse impact on the company's full-

year business plan. All in all, we estimate a ~HK$100mn trading loss in 1H26 based

on its sales and cost of inventory, which could bring the company's 1H26 earnings

down to lower-than-market expectation. CGN Mining Co Ltd (1164.HK, 1164 HK)

Greater China Materials | Hong Kong

2Q26 production was 668tU, 4% YoY lower than 2Q25, but achieving 103.3% of

Stock Rating Overweight

the production plan. 1H26 production was 1248tU, -7.8% YoY. Industry View Attractive

Price target HK$4.60

Exhibit 1: CGN Mining production volume Up/downside to price target (%) 103

Shr price, close (Jul 21, 2026) HK$2.27

25Q1 25Q2 25Q3 25Q4 26Q1 26Q2

52-Week Range HK$5.66-2.00

Actual Production (tU)

Total 659 696 644 703 581 668 Mkt cap, curr (mn) HK$17,254

Semizbay-U 231 196 185 249 155 179 Avg daily trading value (mn) HK$212

Semizbay Mine 112 78 75 130 59 75

Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

Irkol Mine 119 118 110 119 96 104