By the east wind of the reform of central enterprises, the leading value of metallurgy is to be reassessed

New signed orders increased steadily, and the proportion of non-steel continued to increase. In 2022, the company's newly signed contracts reached 1,343.6 billion yuan, an increase of 11.5%, and the compound growth rate in the past five years reached 17.4%, with steady growth. From the perspective of order structure, the proportion of non-steel orders continued to increase, and the proportion of non-steel orders in 2022 reached 85%, a significant increase of about 22 pct compared with 2013. In non-steel orders, housing construction/infrastructure/other projects accounted for 53%/18%/15% of the total orders, with a year-on-year growth rate of 9%/-6%/53%, and other engineering orders grew faster, which is mainly expected to be driven by the upward demand for new energy projects.

1.3. Build a "four beams and eight pillars" business system with engineering construction as the core

Engineering construction is the core business of the company, and the strategy of "four beams and eight pillars" continues to advance. The main business of the company is divided into engineering contracting, housing, land and production development, installation and manufacturing, and resources development and development of four major blocks, the proportion of revenue in 2022 is 92.9%/3.8%/2.1%/1.5%, and the project contracting business contributes the main revenue. The company proposes to take the four core businesses as "beams", metallurgical engineering, high-end housing construction, medium and high-end real estate, transportation and municipal infrastructure, mine construction and mineral development, core technical equipment and steel structure, environmental engineering and new energy, and characteristic theme projects as "columns", to create a comprehensive business layout of "four beams and eight columns", and gradually advance with the "four beams and eight columns" strategy. The company's business structure is expected to continue to diversify. 

1) Engineering contracting business: The company's engineering contracting business consists of metallurgical engineering and non-steel engineering construction business, and non-steel engineering mainly includes housing construction, infrastructure construction and emerging industries. In 2022, the proportion of metallurgical and non-steel engineering revenue in the total revenue of project contracting is 24%/76%, respectively, and the proportion of housing construction/infrastructure construction/emerging industries in non-steel engineering is about 68%/25%/7%. The company's emerging industries mainly involve ecological environmental protection, characteristic engineering, health care, new energy and inspection and testing five plates.

2) Equipment manufacturing business: The company's equipment manufacturing sector mainly includes two aspects: equipment manufacturing and steel structure business. The equipment manufacturing sector is dominated by metallurgical equipment, and has a number of core manufacturing bases such as CCID, MCC Shaanpress, MCC Changtian Heavy Industry, and MCC Nanfang. The products cover the main metallurgical process key equipment such as sintering pellets, iron and steel making, casting and rolling, and are widely used in large international and domestic steel engineering projects. In terms of steel structure manufacturing, the company is one of the largest steel structure manufacturing enterprises in China, with a total layout of 32 steel structure manufacturing bases, and the base's own design capacity reaches 1.65 million tons, ranking the forefront of the same industry in the country.

3) Resource development business: Resource development business is mainly concentrated in the fields of nickel, cobalt and other metal minerals mining, mineral processing, smelting, etc. The average annual profit of this business segment has been about 710 million yuan since 2017, and the profit will be 1.58 billion yuan in 2022, with relatively high performance flexibility.

4) Real estate development business: The company is one of the 16 central enterprises whose main business is real estate development first identified by the State-owned Assets Supervision and Administration Commission of the State Council, and mainly operates real estate development business through its subsidiary MCC Real Estate. Subject to the gradual relaxation of real estate regulation policies, the sector turned a loss into a profit in 2022, with a net profit of 170 million yuan. In the future, the company will actively explore financing models while accelerating the storage of high-quality land in key regions, increase strategic land reserves by old city transformation, regional development, headquarters economy and other ways, and build a comprehensive real estate development and operation business sector.

2. Valuation catalysis: The "national reform and the Belt and Road" intensified, and the resource sector urgently needs to be reassessed

2.1. The "Zhongspecial valuation system" is timely, and the market value of the central state-owned enterprises is expected to increase