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Jiangxi Copper stock hits 5-year peak on profit surge

The share price of Jiangxi Copper, China's second-largest copper producer, hit a five-year peak of HK$2.675 after reporting stronger than anticipated net profit growth to 374.95 million yuan (HK$350 million) for the first nine months of this year.

The H share yesterday rose 4.9 per cent to close 12.5 HK cents higher as the nine-month profit surpassed a Thomson First Call consensus of 373.44 million yuan for the full year.

Many analysts expect the key drivers of the profit growth - rising copper prices and demand - to linger in the fourth quarter as demand for base materials such as copper, alumina, iron ore and coal continue to soar on sustained economic growth.

Deutsche Bank raised its full-year profit forecast by 32 per cent to 514.72 million yuan this year and by 19 per cent to 721.21 million yuan next year as it believed the H share would benefit from the strength in copper and gold prices.

Jiangxi company secretary Wang Dongfeng said yesterday the future demand for copper was best reflected in prices of copper futures.

During the third quarter, the average price of three-month copper futures in London was US$1,759 per tonne, up 16.2 per cent year on year, and was 17,637 yuan per tonne in Shanghai, up 13.8 per cent.

Mr Wang said the company planned to boost the production capacity of lucrative copper cathodes, a type of processed copper, to 400,000 tonnes by the end of this year from 232,000 last year.

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