Analyst Wayne Fung of CMB International Securities maintained a Buy rating on CGN Mining Co (CGNMF – Research Report), reducing the price target to HK$2.18.
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Wayne Fung has given his Buy rating due to a combination of factors that suggest a positive outlook for CGN Mining Co. The company is expected to benefit from a new 3-year offtake agreement with its parent company, which is anticipated to maintain a favorable pricing mechanism. This agreement is likely to include a higher fixed price component, which could enhance revenue stability.
Additionally, CGN Mining is exploring mergers and acquisitions in regions like Africa and Central Asia to diversify its operations. Despite a recent revision in uranium price assumptions and earnings forecasts, the significant contract and spot price gap should mitigate downside risks. The company’s strong net profit growth before tax in 2024, despite some tax-related setbacks, further supports the Buy recommendation.
According to TipRanks, Fung is an analyst with an average return of -3.2% and a 36.73% success rate.
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