BOC International: Financial attributes and industry trends support the non-ferrous metal sector's potential for both profit and valuation increase.

BOC International released a research report stating that by 2026, as the market enters the second stage of the bull market, the "profit-driven upward phase", driven by "anti-inversion" and expanding domestic demand, the narrative of domestic re-inflation will be strengthened, and the strong cyclical attributes of non-ferrous metals are expected to be reflected, while financial attributes and industry trends will bring reassessment opportunities to the industry. In terms of allocation, the bank recommends using industrial metals and strategic minor metals as the spear, and precious metals as the shield. In terms of industrial metals, in the state of tight balance between supply and demand in the medium term, copper prices are expected to receive solid support, and the weak US dollar cycle is also expected to enhance the industry trend for copper prices. As for strategic minor metals, the bank believes that the investment theme is shifting from event-driven speculation to systematic reassessment based on long-term strategic value. Taking rare earths as an example, the rigid constraints on the supply side in policies, along with the export recovery and long-term growth momentum on the demand side, have formed a strong resonance, and the upward trend in rare earth prices is expected to continue. Compared to the period of 2020 to 2022, the current round of rare earth price increase is relatively moderate, and there is still room for further release of profits for leading companies. As for precious metals, the long-term price of gold is expected to remain high, and short-term fluctuations provide opportunities for positioning. In terms of stock prices, leading companies have strong certainty in their annual performance, which will help restore the sector's valuation. In 2026, the sector is expected to see a dual increase in profits and valuation.