[ET Net News Agency, 24 July 2019] Huatai Research initiated coverage of MMG Limited
(01208) with a "buy" rating and a target price of HK$2.95, based on 2.2x 2019/20 average
BVPS, a 15% discount to MMG's average PB during 2016-2018.
Given its single asset (Las Bambas) and single commodity (copper) nature, MMG's
profitability is highly dependent on copper price performance, the research house said.
Huatai believes a price of around US$6,000/t sets up a buying opportunity for the
commodity in both the short and longer-term.
Acknowledging operational difficulties in 1H - road blockage at Las Bambas Mine,
challenging geology at Kinsevere Mine, and flooding at Dugald River Mine - Huatai thinks
the worst is over for MMG and looks for marked half-on-half improvement in both
operational performance and copper price in 2H. (KL)