CMB International: Raised target price of CGN MINING (01164) to 2.61 Hong Kong dollars, new pricing framework agreement is surprising.
Under the new mechanism, the fixed component price (per pound of natural uranium) is adjusted to $94.22 in the first year and increases annually by 4.1% in 2027 and 2028, helping to alleviate major concerns about pricing mechanism uncertainty.
CMB International released a research report stating that CGN MINING (01164) has signed a new pricing framework agreement with its parent company for the years 2026 to 2028. Under the new mechanism, the fixed part price (per pound of natural uranium) for the first year is adjusted to $94.22, increasing by 4.1% annually in 2027 and 2028, significantly higher than the current mechanism. This comes as a pleasant surprise to the market and helps alleviate major concerns about pricing uncertainty. The bank has raised its profit forecasts for CGN MINING in 2026 and 2027 by 17% and 23% respectively. Therefore, the corresponding target price has been raised from 2.18 Hong Kong dollars to 2.61 Hong Kong dollars, maintaining a "buy" rating.
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