Analyst Wayne Fung of CMB International Securities maintained a Buy rating on CGN Mining Co (CGNMF – Research Report), with a price target of HK$2.36.
Wayne Fung’s rating is based on a combination of factors that highlight the underlying strength of CGN Mining Co despite some temporary setbacks. The company recently issued a profit alert indicating a decrease in net profit for 2024 due to non-recurring items such as a one-off dividend withholding tax and changes in fair value from share swaps related to Paladin Energy. However, when these items are excluded, the core operations of CGN Mining are expected to show significant growth, with a projected increase in pretax profit of 41-50% year-over-year, surpassing previous forecasts.
Additionally, the one-off tax expense is attributed to changes in Kazakhstan’s tax policies, and it is anticipated that the effective tax rate will normalize by 2025. Furthermore, the loss from the Paladin Energy share swap is considered a non-operational issue. These factors, combined with the company’s strategic positioning in the uranium sector and its low-cost mining advantages, support the Buy rating with a target price of HK$2.36.
According to TipRanks, Fung is an analyst with an average return of -3.9% and a 36.17% success rate.