Non-ferrous metals stocks extended their gains in afternoon trading. As of press time, Tianqi Lithium (09696) surged 8.34% to HK$42.6; Ganfeng Lithium (01772) climbed 7.34% to HK$33.36; Zijin Mining (02899) gained 5.62% to HK$28.18; Chalco (02600) rose 5.05% to HK$6.87; and China Hongqiao (01378) advanced 4.13% to HK$24.72.

Industrial Securities noted that warming expectations for Federal Reserve rate cuts will significantly boost commodity demand. Under expectations of dollar depreciation, the "anti-inflation" properties of bulk commodities are becoming prominent. As of the 2025 interim reports, A-share precious metals and industrial metals sectors are in a phase of "high profitability, low valuation."

Considering the overseas transition from high inflation to moderate inflation, and the relatively high probability of long-term moderate inflation or inflation resurgence in the United States after rate cuts, combined with increased trading activity in domestic capital markets and the rotation effect from "high-cut-low" strategies, incremental funds are expected to drive sector valuation improvements. Resource stocks with solid valuations are anticipated to experience a "Davis Double Play" moment.

Additionally, both China's power revolution and the global computing power revolution will continue to drive sustained high growth in demand for metal raw materials. Furthermore, countries' protection and pursuit of key mineral resources are becoming increasingly evident, with clear characteristics of core resource concentration among leading players. It is expected that the value re-evaluation of key mineral resources will gradually offset the negative valuation pressure brought by commodity cyclical attributes.

The institution believes that the valuation system for resource products will be continuously enriched and optimized in the future.