Goldman Sachs raised its price target for MMG Limited (01208.HK) to HK$13.5, citing a surge in copper prices that could allow the miner to issue its first dividend in a decade by 2026.
The bank's global commodities team updated its copper price forecasts, leading to a 3% to 20% increase in its 2026-2027 profit projections for MMG, according to its April 8th research report.
The report forecasts MMG's recurring net profit will jump from a projected $820 million in 2025 to $1.75 billion in 2026.
The bullish outlook positions MMG, a pure-play copper producer, to capitalize on rising prices for the industrial metal while benefiting from lower financing costs achieved through deleveraging. For 2025, MMG reported a recurring net profit of $816 million, which was in line with Goldman's forecast and above broader market expectations. The company did not declare a final dividend for the year.
Goldman's revised forecast hinges on the performance of copper, a key material for electrification and industrial applications. The bank's optimistic view on the commodity underpins its projection that MMG's earnings will nearly double in just one year. This growth is expected to significantly improve the company's financial position, enabling a potential return of capital to shareholders for the first time since 2016.
The upgrade suggests that the benefits of higher commodity prices will be amplified by MMG's improved balance sheet. By reducing debt, the company has lowered its interest expenses, allowing more of its operational earnings to flow to the bottom line. Investors will be watching copper market dynamics and the company's progress on deleveraging as key indicators for the stock's performance.
This article is for informational purposes only and does not constitute investment advice.
