Metallurgical construction leading, mineral resources development potential

Real estate business adhere to steady operation, sales are expected to recover. In 2022, the sales area and sales of MCC Real Estate, the main operating body of the company's real estate business, declined by 49.5% and 41.8% year-on-year, and the operating income of the real estate business reached 22.73 billion yuan, an increase of 6.1% year-on-year, with the revenue/gross profit ratio of 3.8%/4.4%. From January to April 2023, the company's sales area/sales increased by 9.3%/17.3% year-on-year, showing a recovery trend. The company's real estate business adheres to the high-end line, creating three high-end residential product lines in the Beijing-Tianjin-Hebei "Dexian system", the Yangtze River Delta "Jinxiu system" and the Pearl River Delta "Yijing System". In the past, the company's real estate business has always maintained a revenue scale of about 20 billion yuan, actively avoided blind expansion, and the overall drag on the company is limited during the downturn of the real estate business.

The resource development business is bright, and the incremental minerals are worth looking forward to

Resource reserves are sufficient, and overseas development projects are progressing steadily

Overseas mines are rich in resources, and the volume and price rise help the scale increase. At present, the company has three production mines and one polysilicon production base, and the revenue of resource development business in 2022 is 8.87 billion yuan, an increase of 33.0%. The Company's main mineral resources include nickel, cobalt, copper, lead and zinc, benefiting from rising resource prices, while stable production in hand mines, fast mining and fast selling, and resource development business achieved rapid operating income growth for two consecutive years. In 2022, due to the decline in resource prices, the gross profit margin of resource development decreased by 6.4 percentage points to 36.3%, but it still remained at a high level.

Nickel and cobalt mines account for 60% of profits, and the countries where the mines are located are politically stable. In 2022, the net profit of the Ruamu nickel and cobalt mine in Papua New Guinea, the Duda lead and zinc mine in Pakistan and the Shandak copper and gold mine in Pakistan will reach 1.27 billion yuan, 280 million yuan and 130 million yuan respectively, accounting for 60%, 14% and 6% of the resource development business. Papua New Guinea, where the company's nickel and cobalt mines are located, pursues a policy of diplomatic neutrality, and the bilateral trade volume with China in 2022 is 5.26 billion US dollars, up 30.8% year-on-year. Pakistan, the country where the company's copper, lead and zinc mines are located, is a "good-neighborly country" of China and has carried out in-depth cooperation with China in many fields. The company and the local government have the possibility of continuing to deepen cooperation in mineral development in the future.

Nimu nickel-cobalt project in Papua New Guinea

The Ruimu Nickel-Cobalt project is located in Madang Province, Papua New Guinea. It is a world-class mining project integrating mining, mining and smelting. The project consists of laterite open-pit mining, pipeline slurry transportation, high pressure acid leaching hydrometallurgy, deep-sea tailings discharge and other main processes and supporting facilities. The company indirectly holds 57% of the equity of the project, which produces nickel-cobalt intermediate products with a metal equivalent of about 31,000 tons/year of nickel and 3,000 tons/year of cobalt. The project was completed in 2012 and entered production in the same year. In 2022, the project will produce 34,302 tons of nickel and 2,987 tons of cobalt, reaching a yield of 105%, achieving a revenue of 4.746 billion yuan and a net profit of 1.267 billion yuan.