China Copper Sector Equities: Price breakout and solid execution to drive valuation catch-up

Copper price reached all-time highs on supply constraints, resilient demand, cost support and tight ex-US inventory. Solid production, cost control and clearer shareholder returns are set to narrow the valuation discount vs global peers. We like CNM & MMG as pure copper plays, Zijin Mining & CMOC as diversified miners (all Buy); cautious on JXC (Hold). Five themes are shaping the sector: (1) a durable, supply-led copper price upcycle, with tightness reinforced by inventories and policy risk; (2) a clear upstream/downstream bifurcation - pure-play miners capture upside from higher metal prices, while domestic smelters face pressure from negative treatment and refining charges (TC/RC); (3) an in-house execution premium, with operational control a key differentiator for cost and delivery; (4) by-product cashflow as a swing factor, acting as a cost headwind for some and an earnings tailwind for others;