Key investment events description Minmetals Development released its 2015 annual report. During the reporting period, the company achieved operating income of 61,986 billion yuan, a year-on-year decrease of 53.93%; operating costs of 60.224 billion yuan, a year-on-year decrease of 53.95%; realized net profit attributable to the parent company of 39.53 billion yuan, compared to 210 million yuan in the same period last year; based on the latest share capital, it achieved EPS-3.69 yuan in 2015. In the fourth quarter, the company achieved operating income of 8.820 billion yuan, a year-on-year decrease of 64.52%; realized operating costs of 8.831 billion yuan, a year-on-year decrease of 62.34%; realized net profit attributable to owners of the parent company of -3,032 million yuan, compared with the same period last year; and achieved EPS-2.83 yuan in the fourth quarter and -0.59 yuan in the third quarter. The incident commented on the manufacturer's huge loss+asset impairment loss+exchange loss, and the annual performance changed drastically: As a leading enterprise in the domestic ferrous metal circulation field, the company's main business covers all key links in the ferrous metal industry chain, such as metallurgical raw material supply, steel trade, processing and distribution, and logistics services. Therefore, the company was deeply affected by the downturn in the entire ferrous metal industry chain (the composite index of steel prices fell 28.48% year on year in 2015, and steel prices fell to a new low of 20 years; the mineral price composite index fell 36.71% year on year, and iron ore prices fell to a new low in 10 years). The 2015 results showed a sharp shift in losses, achieving net profit attributable to the parent company - 39.53 billion yuan, an increase of 4.163 billion yuan compared to the same period last year. The company's business revenue shrank seriously under the general trend of poor market conditions, which in turn led to a year-on-year decrease of 2,010 billion dollars in gross profit. Among the assets of the company's various industries, the losses of production enterprises were the most serious. Among them, the company's holding subsidiary, Five Mining Steel, was affected by a sharp drop in the price of medium and heavy plate (the price index of medium and heavy plate fell by 31.08% year on year), and gross profit declined sharply, which in turn led to a year-on-year increase of 3,311 billion yuan. On the other hand, the company's asset impairment losses increased by 2,629 billion yuan over the same period last year, which also severely hurt the company's performance in 2015. Among them, financial constraints in the trade chain caused bad debt losses of 1,906 million dollars, and falling commodity prices caused losses of 788 million yuan due to falling commodity prices. Both losses increased sharply year on year. Furthermore, due to the sharp depreciation of the RMB by 6.12% in 2015, the company confirmed an exchange loss of 782 million yuan, which in turn increased financial expenses by 703 million yuan over the same period last year, further hampering performance. The market did not escape the slump in the fourth quarter, and performance continued to decline: the company achieved net profit attributable to parent company owners in the fourth quarter - 3,032 million yuan, compared to 33 million yuan in the same period last year. On the year-over-year side, financial expenses due to gross profit, exchange losses, and asset impairment losses caused the fourth quarter results to a year-on-year increase of 3,066 billion dollars; on the month-on-month basis, performance declined seriously, mainly due to the decline in gross profit and the impact of asset impairment losses. Divesting inefficient assets and striving to build a first-class comprehensive steel distribution service provider: The company actively divested inefficient production and smelting businesses such as Minmetals and Steel, supported by e-commerce platforms, smart logistics and marketing networks, and developed commodity raw material trading services and terminal-oriented supply chain services. Among them, the e-commerce platform “Xinyilian” had a cumulative annual trading volume of 13.5 million tons, a transaction amount of 33 billion yuan, and remarkable transformation results. The company's 2016 and 2017 EPS are expected to be 0.18 yuan and 0.30 yuan respectively, maintaining the “buy” rating.