The Zhitong Finance App learned that Tianfeng Securities released a research report saying that judging from the overall situation of the non-ferrous metals sector in 23-24Q1, profits on the resource side were divided, the performance of the gold & copper sector increased sharply year-on-year, and there were signs of improvement on the material side. In terms of index performance, the 24Q1 non-ferrous metals sector rose 8.5%, better than the Shanghai and Shenzhen 300 Index. Among them, precious metals and industrial metals led the way, while energy metals saw the biggest decline. It is worth noting that as geopolitical risk gradually wanes, market risk appetite is warming up, leading to a rebound in stock market prices, and US bond yields rebounded upward. The Federal Reserve's economic data is strong, inflation is sticky, and the market focus will shift to clues about when to cut interest rates. The 24Q1 gold price continued to rise under the influence of interest rate cut policy expectations and in the context of gold purchases by central banks around the world, leading to a sharp increase in corporate profits.

Tianfeng Securities's main views are as follows:

Precious metals: Expectations for the Federal Reserve to cut interest rates are strong, and the 24Q1 rise in gold prices has led to a sharp increase in corporate profits

As geopolitical risk gradually waned, market risk appetite recovered, leading to a rebound in stock market prices, and US bond yields rebounded upward. The Federal Reserve's economic data is strong, inflation is sticky, and the market focus will shift to clues about when to cut interest rates. The 24Q1 gold price continued to rise under the influence of interest rate cut policy expectations and in the context of gold purchases by central banks around the world, leading to a sharp increase in corporate profits. Under the general environment where interest rate cuts are expected, silver is expected to continue to rise, driven by factors such as increased demand from the silver industry and increased market interest in precious metals investment. Recommended attention: Shandong Gold (600547.SH), Yintai Gold (000975.SZ), Chifeng Gold (600988.SH), Shengda Resources (000603.SZ).

Basic metals: Strong copper prices boosted the performance of copper companies. Fluctuating aluminum prices showed mixed ups and downs in the performance of aluminum companies

1) Copper: The supply-side mining side continues to be disrupted. The tightness on the mining side will be transmitted to the smelting side by driving refineries to reduce production, etc., and may subsequently limit copper production. Actual demand in 24Q1 is still weak. Follow-up attention will be paid to macroeconomic expectations of the Fed's interest rate cut, the trend of TC copper concentrate prices, and the recovery of demand under high copper prices and actual consumption during the peak season. It is recommended to focus on Zijin Mining (601899.SH), Luoyang Molybdenum Industry (603993.SH), Jin Chengxin (603979.SH), and Minmetals Resources (01208), which have relatively undervalued targets.

2) Aluminum: In terms of supply, domestic construction production capacity is close to its peak. Although the construction real estate sector is weak in 24Q1 on the demand side, the performance of photovoltaics, automobiles, and home appliances is good, supporting aluminum demand. Considering that the supply side is limited and the demand side is gradually improving, aluminum prices have some support. Recommended attention: China Hongqiao (01378), Tianshan Aluminum (002532.SZ), China Aluminum (601600.SH), Shenhuo (000933.SZ).

Small metals: antimony, tungsten and tin continue to strengthen, and corporate profit performance is divided

Revenue of $455.260 billion was achieved in 2023, -2.14% YoY. 24Q1 achieved revenue of 98.395 billion yuan, -12.94% YoY and -16.24% YoY. Net profit attributable to mother was RMB 22.831 billion in 2023, -12.97% YoY. 24Q1 achieved net profit of 3.708 billion yuan, -60.35% YoY and -23.40% YoY.

1) Tin: Overseas tin ore supply is still disrupted. Burmese mining continues to stop production, tin ore supply is tight, and tin prices continue to strengthen, driving the Q1 performance growth of Tin Industry Co., Ltd. 2) Tungsten: Environmental protection and safety inspections are severe. The operation of mines and smelters is limited, and the problem of insufficient supply of raw materials is prominent. As the price of tungsten enters an upward channel, the profit recovery of terminal products is expected to be greater, and the profit level of enterprises such as Chinatungsten Hi-Tech is expected to rise in a cyclical manner. 3) Antimony: Q1 antimony ingots are mainly affected by the reduction in foreign mines. The supply of raw materials is tight, prices continue to rise, and the pattern of tight raw materials will continue. The rise in antimony prices is supported by solid fundamentals and is expected to operate strongly this year, bringing profit support to enterprises such as Hunan Gold and Huayu Mining.

Recommended attention: Tin Industry Co., Ltd. (000960.SZ), Chinatungsten Hi-Tech (000657.SZ), Hunan Gold (002155.SZ), Zhuye Group (600961.SH).

Energy Metals: Under the pattern of oversupply and demand, lithium companies' performance is under pressure, focusing on relative bottom-up opportunities

1) Lithium: Currently, lithium production capacity is clearly overcapacity, and large manufacturers are still in control. Downstream demand is recovering, and terminal procurement sentiment is low. The price trend of lithium metal still needs to be paid attention to later raw material market conditions. 2) Cobalt: Overall cobalt production is stable, supply is sufficient, and downstream demand performance is relatively stable. 3) Nickel: Nickel prices are mostly affected by macroeconomic factors. Pay attention to expectations of subsequent interest rate hikes by the Federal Reserve. The domestic market continues to be oversupplied, and demand recovery after a year falls short of expectations. In anticipation of industry oversupply in the next few years, the importance of enterprise cost advantages and resource advantages will continue to be highlighted.

Recommended attention: Yongxing Materials (002756.SZ), China Mining Resources (002738.SZ), Tianqi Lithium (002466.SZ), Huayou Cobalt (603799.SH), Tengyuan Cobalt (301219.SZ), etc.

Rare earth magnets: Q1 profits bottomed out in a phased manner, and the market is expected to improve in the future

Affected by the decline in rare earth prices, the net profit of the rare earth and magnetic materials sector declined sharply in '23 and 24Q1. Rare earth magnetic materials achieved net profit of 5.54 billion yuan in 23 years, or -48.7% year-on-year. In 24Q1, net profit attributable to mother was -357 million yuan, -120.8% year-on-year, and -118.2% month-on-month. With the implementation of the first batch of indicators in '24, the short-term industry's profit level is expected to bottom out in stages. Rare earth prices are in a volatile and stable range, and the market is expected to improve in the future.

Rare Earth Resources Recommended Attention: Northern Rare Earths (600111.SH), China Rare Earths (000831.SZ), Guangsheng Nonferrous (600259.SH); Magnetic Materials Factory suggests focusing on: Jinli Permanent Magnet (300748.SZ), Zhongke Sanhuan (000970.SZ), and Zhenghai Magnetic Materials (300224.SZ).

New metal materials: the Q1 month-on-month improvement signal has appeared, focusing on the direction of the segmented market

New Metal Materials achieved net profit of 4.63 billion yuan to mother in '23, or -34.7% year-on-year. Net profit attributable to mother was RMB 1,044 million in 24Q1, -39.1% YoY and +2.6% YoY. The overall performance of the sector has improved month-on-month, and the boom in some segments is expected to reverse.

Recommended attention: Platinum New Materials (300811.SZ), Boqian New Materials (605376.SH), Yue'an New Materials (688786.SH), Yunlu Co., Ltd. (688190.SH), Bowei Alloy (), etc. 601137.SH

Risk warning: the systemic risk of a global recession, the risk of demand falling short of expectations, and the risk of a sharp increase in upstream supply.