In-line 1H21 net income of Rmb2.4 bn (+139% YoY). Implied 2Q earnings of Rmb1.4 bn (+150% YoY). Earnings growth was due to higher selling prices of its major products and also effective costs control. Thanks to higher metals price, total revenue from trading business (IXM) was up 94.1% YoY, with GPM of 5.5% compared to 41.9% from mineral exploration and processing business.

Upside on copper and cobalt production from TFM. In 1H21, TFM copper/cobalt production arrived at 98.1 kt/7.0 kt, +7.9%/7.1% YoY. The 10K expansion project will further improve annual copper and cobalt output, by ~88.5 kt/7.3 kt. Also, CMOC plans to invest US$2.5 bn at TFM to boost annual copper and cobalt production by 200 kt/ 17 kt.

Earnings forecasts revision. We revise up CMOC FY21-23E earnings by 38%/30%/53% by applying higher volume and also higher prices for its major products assumptions. We derive new H-share TP of HK$5.9 (from HK$5.5) and A-share TP of Rmb7.4 (from Rmb6.1). Maintain Neutral on both H & A shares.

CMOC (H) shares are trading at 2.2x 21E P/B and 19.9x 21E P/E.