The 2019 interim results of the Company were lower than marketconsensus and our expectations. Total revenue of the Company was down29.03% yoy to RMB9.98 billion and net profit attributable to shareholdersdropped by 74.12% yoy to RMB808.0 million. The significant drop in profitwas mainly attributable to lower cobalt and tungsten price.
Revise down cobalt and tungsten price assumptions, but maintainother metal price assumptions unchanged. We maintain molybdenumprice assumptions unchanged, but revise down tungsten price assumptionsdue to weak consumption demand of tungsten. We expect the global coppermarket to be stable in 2019 and the average annual copper price to tradebetween US$6,100/t-US$6,700/t. We revise down annual average cobaltprice assumptions to about US$32,000/t -US$35,000/t as the market reacheda new balance.
Maintain mining production assumptions of the Company unchanged.
In 2019, the Company plans to produce 14,500-16,000 tons of metalequivalent molybdenum concentrate, 9,000-10,000 tons of metal equivalenttungsten concentrate, 30,000-32,000 tons of mined copper from Northparke,170,000-200,000 tons of mined copper and 16,500-19,000 tons of minedcobalt from Tenke. The production of the Company was stable and wemaintain mining output assumptions of the Company unchanged.
Revise down TP to HK$2.35, maintain "Neutral".