Investment tips for this issue:

Special Reminder: CITIC Metals is one of the first registration-based mainboard projects to offer shares, and new regulations such as the Investor Code of Conduct apply.

AHP score - After excluding the liquidity premium factor, CITIC Metals scored 2.49 points, which is 33.9% of the total score.

After excluding the liquidity premium factor, we estimated that CITIC Metal's AHP score was 2.49, which is in the 33.9% total score of the AHP model for non-science and innovation systems, which is above the midstream level. After considering the liquidity premium factor, we estimated that CITIC Metal's AHP score was 2.00, which is in the 30.2% quota of the total score of the AHP model for non-science and innovation systems, which is below the midstream level. Assuming an 80% finalist rate, under neutral expectations, the placement ratios of CITIC Metals' online sales targets in categories A and B are 0.0158% and 0.0064%, respectively.

Offline placement plan: All offline investors participating in this offline inquiry are required to provide proof of the assets of the placement target. CITIC Metals will prioritize placing no less than 70% of the number of shares issued offline to Class A investors after the pullback. At the same time, 10% of the number of shares allotted to all offline investors are limited to 6 months.

The country's leading metal and mineral products trader and exclusive distributor of CBMM in China. The company is mainly engaged in the trading business of metals and mineral products. In terms of ferrous metal products, the company is one of the main domestic iron ore importers, with an annual trade volume of over 50 million tons. The company has accumulated rich channel resources in its operations, established long-term and stable cooperative relationships with world-renowned mining companies such as Rio Tinto, BHP Billiton, Anglo-American Resources, Vale, etc., and has basically achieved a business layout for major domestic ports. It has established a customer base of large and medium-sized steel companies represented by Baowu Group, Hegang Group, and Shangang Steel Group. In terms of non-ferrous metal products, the company is the exclusive distributor of CBMM's shares in China and has acquired 15% of CBMM's shares. Currently, the company's niobium product sales business covers the vast majority of large and medium-sized steel companies in the country, accounting for about 80% of the domestic niobium product market, ranking first in the country.

Invest in mines to guarantee global resource holdings and use technology to drive sales to help stabilize business. The company invests in world-class mining enterprises such as CBMM, LasBamBas, and Ivanhoe by participating in shares, which has strongly guaranteed the company's resource holdings of key strategic varieties on a global scale. Among them, the LasBamBas copper ore and KK projects are world-class copper mines with low mining costs, while CBMM is the world's largest producer of niobium products. At the same time, the company's scientific procurement and sales plan effectively bridged the misallocation of resources in time and space between the mine and downstream customers, and properly controlled risks through derivatives hedging, and the inventory exposure was small. In addition, the company adopted the market strategy of “using technology to drive sales” in the niobium product business, forming a complete technology promotion system, which guaranteed the company's leading position in the market and continuously expanded the market size of niobium products.

Iron ore is one of the commodities with the largest international trade volume, and the market space in the industry is broad. At present, the iron ore trade industry has also developed and matured. The market size has reached the level of trillion dollars, trade demand has existed for a long time, and the market space of the industry is broad. According to statistics from the International Steel Association, in 2020, the global annual export volume of iron ore reached 1,656 million tons, the annual import volume reached 1,617 million tons, and the volume of trade was huge. At the same time, due to problems such as insufficient supply and low grade of domestic iron ore, China's external dependence on iron ore remains high. According to statistics, China imported about 1,124 million tons of iron ore in 2021.

The volume of performance is low, the compound growth rate of revenue and net profit returned to the mother is above the midstream level, and gross margin continues to decline. From 2019 to 2021, the company's revenue and net profit scale was only higher than that of Minmetals development. The compound growth rate of the two was above the midstream level of comparable companies; gross margin declined year by year and was below the comparable average, and R&D expenditure as a percentage of revenue was at a moderate level.

Risk warning: CITIC Metals needs to be wary of risks such as certain uncertainty in the production and operation of mining enterprises participating in investment, uncertainty in local government policies and regulations, uncertainties in local government policies and regulations, and not receiving cash dividends from participating mining companies, and fluctuations in the macro environment.