The leading position is stable, and "double carbon" provides new opportunities

1. Metallurgical engineering "national team" with outstanding scale and technical advantages

Metallurgical technology strength is leading, and the domestic market share of large-scale metallurgical projects is 90%. According to the company's annual report, the company is the world's largest and strongest metallurgical construction contractor and metallurgical enterprise operation service provider, in the domestic market, environmental protection raw material field, coking, sintering and pelletizing, iron making, steel making and continuous casting, hot rolled flat, hot rolled long and cold rolling business fields of technical level, engineering performance, construction effect, owner satisfaction are in a leading position. In terms of market development, the company pays attention to the advantages of the whole industrial chain, can provide customers with a package of solutions, and has undertaken many large and medium-sized projects of major steel enterprises, occupying 90% of the domestic and 60% of the global metallurgical market, and has outstanding competitive advantages. Metallurgical orders, income continued to increase. Since 2016, with the deepening of the national supply-side reform, the profitability of the steel industry has greatly improved, and the capital expenditure capacity and willingness of steel companies have increased significantly. Driven by capacity reduction and replacement, the industry's large EPC orders have increased significantly, and the company's metallurgical orders have continuously achieved rapid growth since 2017. In 2022, the company signed a total of 173 billion yuan of new metallurgical orders, an increase of 9.6%, a new high since 2013. In terms of revenue, the company's metallurgical sector achieved revenue of 129.6 billion yuan in the year, an increase of 12.5%, continuing a high growth trend.

2. Under the "double carbon" goal, the demand for green and intelligent transformation of the iron and steel metallurgy industry continues to increase

Under the "double carbon" goal, the policy vigorously promotes the clean and low-carbon transformation of key industries, and the demand for transformation projects in key industries such as steel is expected to increase significantly. The Action Plan for Peaking Carbon before 2030 clearly states that "we will implement energy conservation and carbon reduction projects in key industries, promote energy conservation and carbon reduction transformation in power, steel, non-ferrous metals, building materials, petrochemical and chemical industries, and improve the efficiency of energy and resources utilization." In November 2021, ten ministries and commissions including the National Development and Reform Commission jointly issued the "14th Five-Year Plan for the Implementation of National Cleaner Production", which pointed out that to promote the "one-line and one-policy" green transformation and upgrading of key industries such as energy, steel, building materials, non-ferrous metals, petrochemical and chemical industries, and accelerate the implementation of systematic cleaner production transformation of existing enterprises and parks. Support qualified key industries to take the lead in carbon peaking. We selected 100 enterprises in key industries to carry out cleaner production transformation projects, and promoted a number of key enterprises to reach the international leading level of cleaner production. In terms of industry segmentation, the steel industry plans to complete 530 million tons of ultra-low emission transformation of steel production capacity and 460 million tons of clean production transformation of coking capacity; The non-ferrous industry completed the transformation of about 4,000 non-ferrous kilns for cleaner production; The building materials industry completed the transformation of 850 million tons of cement clinker cleaner production. Steel, nonferrous metals, petrochemical, water sludge and other industries in the follow-up clean transformation project business is expected to grow rapidly. The transformation of the steel industry into an ultra-low emission industry has generated an effective investment of 200 billion yuan. By the end of 2022, a total of 207 million tons of crude steel production capacity has completed the entire process of ultra-low emission transformation and publicity, and 480 million tons of crude steel production capacity has completed the transformation of key projects such as sintering pellets desulfurization and denitrification, and material yard closure, accounting for two-thirds of the country's total production capacity. From January to March 2023, about 40 million tons of crude steel production capacity completed the entire process of ultra-low emission transformation. According to the estimates of the Ministry of Ecology and Environment, the ultra-low emission transformation of steel has attracted a cumulative effective social investment of about 200 billion yuan, which has led to the rapid growth of environmental protection and related industries.