Bank of China Securities: Financial attributes and industry trends support the non-ferrous metals sector, which is expected to see both profit growth and valuation increase

CITIC Securities APP has learned that Zhongyin Securities released a research report stating that by 2026, as the market enters the second phase of a bull market “profit-driven rise,” under the influence of “anti-involution” and expanding domestic demand, the narrative of re-inflation domestically will strengthen, and the strong cyclical nature of non-ferrous metals is expected to be reflected. Meanwhile, the financial attributes and industry trends will present revaluation opportunities for the sector.

In terms of allocation, the bank recommends using industrial metals and strategic small metals as the offensive, and precious metals as the defensive. Regarding industrial metals, in the medium-term supply and demand balance, copper prices are expected to receive solid support, and a weak dollar cycle may also enhance the industry trend for copper.

For strategic small metals, the bank believes that the investment mainline is shifting from event-driven thematic speculation to a systematic revaluation based on long-term strategic value. Taking rare earths as an example, rigid supply-side policies and demand-side export recovery and long-term growth momentum have created strong resonance, and the upward trend of rare earth prices is not yet over. Compared to 2020 to 2022, the recent increase in rare earth prices has been relatively moderate, and leading companies still have room for further profit release.

As for precious metals, gold prices are expected to remain high in the medium to long term, with short-term fluctuations providing opportunities for layout. Regarding stock prices, leading companies have relatively strong earnings certainty this year, which will help restore sector valuations. By 2026, the sector is expected to see both profit and valuation growth.