Hong Kong mining stocks were significantly under pressure on Monday, with MMG Limited, a mining company under China Minmetals Corporation, dropping over 11% during trading to HKD 8, hitting a nearly three-month low.
MMG operates copper and zinc mining assets in various regions worldwide, including major mining projects in Australia, the Democratic Republic of the Congo, and Peru.
Investment Bank Lowers Valuation
Investment bank Citigroup lowered its target price for the company from HKD 12.5 to HKD 11.2 in its latest report.
Citigroup noted that the expected increase in capital expenditure for the Las Bambas copper project in Peru will impose some pressure on the company's future cash flow and profitability.
Weakening Resource Sector
Since the beginning of this year, MMG's stock price has fallen by approximately 3.2%.
During the same period, the Hang Seng Index has dropped by about 2.1%.
The overall performance of the resource sector in the Hong Kong stock market has been weak, with the materials sector in the Hang Seng Composite Industry Index falling as much as 5.7% during trading.
Analysts pointed out that mining company stock prices are usually highly sensitive to capital expenditure, metal prices, and the global economic cycle.
