FY3/26 Results — SMM: Copper‑Led Beat; FY3/27 Normalizes for Inventory Effects

研报英文原文证据摘录

FY3/26 Results — SMM: Copper‑Led Beat; FY3/27 Normalizes for Inventory Effects

onductor applications, though it remained a secondary contributor relative to mining and

smelting.

FY3/27 guidance: elevated earnings sustained, but YoY normalization. For FY3/27, SMM

guided to PBT of ¥229bn (-10% YoY). Management assumptions include copper at $11,000/t,

gold at $4,200/oz, nickel at $7.50/lb and FX at ¥155/US$. Higher copper production, particularly

at Quebrada Blanca, supports earnings, while headwinds include the reversal of FY3/26

inventory valuation gains, higher energy and operating costs linked to Middle East tensions,

and increased spending on overseas growth projects and battery materials restructuring.

Sensitivity analysis indicates PBT sensitivity of approximately ¥3.5bn per $100/t move in

copper, ¥3.7bn per $10/oz in gold, and ¥2.0bn per ¥1 move in USD/JPY.

Shareholder returns: policy reset lifts visibility and consistency. SMM formally reset its

shareholder return framework the previous quarter, raising the minimum return indicator to a

DOE of 3.5% while targeting a consolidated equity ratio above 55%. FY3/26 DPS was increased

to ¥228 (¥183), and for FY3/27 the company plans DPS of ¥207 alongside a ¥20bn share

buyback (up to 1.48% of shares outstanding, from May to July 2026), with repurchased shares

to be cancelled. Management emphasized a more systematic approach to buybacks going

forward, improving the predictability of total shareholder returns.

Our view: FY3/26 results confirm SMM’s strong operating leverage to copper and gold

and highlight a more resilient earnings base following the smelting turnaround. While

FY3/27 guidance implies normalization of inventory effects, earnings remain elevated relative