Huatai Securities: A-shares of non-ferrous metals may have oversold and there is room for recovery.

Huatai Securities research report points out that the substantial decline in leading A-share non-ferrous companies this round is due to valuation compression rather than damage to EPS. As of July 6, the 26E EPS of related companies has been expected to be raised for nearly 180 days, with good profit expectations for the company, and the sector's oversold condition may be due to valuation compression. As of July 3, the PE-TTM of the three sectors of gold, aluminum, and copper in the CSI index were at 11.7%, 5.1%, and 42.1% since 2020, respectively, relative to the full A PE-TTM at 0.2%, 0.0%, and 0.1% since 2020, respectively. With the easing of tensions between the US and Iran and a marginal recovery in risk appetite, we believe that the commodity prosperity of the A-share non-ferrous sector is at a high level, but valuations are at historic lows. Compared to overseas pricing, the downside potential for A-share non-ferrous leaders may be limited, and the upward elasticity may be considerable, making it a typical high-risk trading window.