In a report released today, Wayne Fung from CMB International Securities maintained a Buy rating on CGN Mining Co, with a price target of HK$2.42.
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Wayne Fung has given his Buy rating due to a combination of factors influencing CGN Mining Co’s future performance. Despite anticipating a net loss in the first half of 2025, primarily due to a one-off negative margin in uranium trading and a decrease in spot uranium prices, Fung sees this as a temporary setback. He expects the trading margins to recover in the second half of 2025 as the spot price of uranium rebounds.
Looking forward, a new pricing mechanism for the off-take agreement with the parent company starting in 2026 is expected to significantly boost earnings. This mechanism includes a much higher contract price, which will enhance profitability. Fung believes that any potential stock pullback following the first half of 2025 results could present a buying opportunity, reinforcing his Buy rating on the stock.