Metallurgical construction leading, mineral resources development potential

Company profile: Metallurgical construction leader, keep out of new development

Based on metallurgical engineering, back to China Minmetals

The world's largest metallurgical construction contractor and metallurgical enterprise operation service provider. The full name of MCC is China Metallurgical Engineering Co., LTD., which is the world's largest metallurgical construction contractor and metallurgical enterprise operation service provider, one of the key resource enterprises identified by the State, the steel structure production enterprise with the largest production capacity in China, and one of the 16 central enterprises identified by the State-owned Assets Supervision and Administration Commission of the State Council as the main business of real estate development. The company's main business includes engineering contracting, real estate development, equipment manufacturing and resource development. In the "Top 250 Global Contractors" (ranked by total turnover) released by ENR in 2022, MCC ranked 6th, unchanged from the previous year, and in the "Top 250 International contractors", MCC ranked 47th, up 6 places from the previous year.

Back to Minmetals Group, strategic integration and re-plastic core competitiveness. In 2015, MCC and China Minmetals Group Limited (referred to as "China Minmetals") began to implement strategic restructuring, and MCC was integrated into China Minmetals. Minmetals Group takes metal minerals as its core business, has rich mineral resources reserves around the world, and has strong trade logistics capabilities and financial operation capabilities. The company is backed by Minmetals Group, and with the deepening of strategic integration, it is expected to receive more support in overseas expansion and investment and financing.

Around the main business of engineering, the performance increased steadily

Strong base, focus on core advantages to build. China MCC adheres to the strategic positioning of "being a world-class metallurgical construction national team, the main force and vanguard of capital construction, the leader and vanguard of emerging industries, and long-term adherence to the road of high-tech and high-quality innovation and development", and vigorously develops the "four beams and eight pillars" business system and product positioning. "Four beams" is metallurgical construction, engineering contracting, emerging industries, comprehensive real estate four business segments; The "Eight pillars" include metallurgical and mining engineering, equipment manufacturing and steel structure, housing and infrastructure engineering, mineral development, comprehensive real estate and other engineering services and products.

Focusing on the main business of engineering, revenue and profit achieved steady growth. In 2022, the company achieved operating income of 592.67 billion yuan, an increase of 18.4%, and gross profit of 10.27 billion yuan, an increase of 22.7%. From 2017 to 2022, the company achieved a compound growth rate of 19.4% in operating income and 11.1% in gross profit. From the perspective of business structure, the revenue and gross profit of the company's engineering contracting business have increased, and the proportion of project contracting revenue from 2013 to 2022 has increased from 80% to 93%, and the gross profit composition has increased from 75% to 86%.

The newly signed engineering orders increased steadily, and the proportion of non-steel business was high. The amount of new contracts signed by the company maintained a steady growth. In 2022, the amount of new contracts signed by the company was 1,345.57 billion yuan, an increase of 11.7%. In 2023, the amount of new contracts signed by the company was 421.31 billion yuan, an increase of 3.8%. From the perspective of order structure, metallurgical engineering accounted for 14%, and housing construction and infrastructure accounted for 71%, constituting the main part of the company's engineering orders.

Gross profit margin is under pressure as a whole, and the profitability of resource development business is strong. Due to the low entry barriers to non-steel engineering business and fierce competition in the industry, the gross profit margin of the company's engineering contracting has continued to decline, driving the overall gross profit margin to show a continuous downward trend. The company's gross margin in 2022 was 9.6%, down 1.0 percentage points from the previous year and down 4.0 percentage points from 2013. In terms of business, the gross profit margin of the company's engineering contracting/real estate development/equipment manufacturing/resource development business in 2022 is 9.0%/11.1%/11.6%/36.3%, respectively. In addition to the project contracting business, the real estate development business was affected by the downturn of the industry prosperity, and the gross profit margin decreased significantly; Equipment manufacturing gross profit margin to maintain a stable level; The profitability of resource development business is strong, and the gross profit margin continues to improve.