Depreciation is dragging down profits, and an inflection point in operations can be expected. Affected by the real estate industry, the company raised a total of 8.95 billion yuan in depreciation preparations in '23, an increase of 80.4% over the previous year, dragging down profits. Currently, the real estate industry policy is improving, and the company's real estate drag is expected to decrease. In 2024, the company plans to achieve revenue of 660 billion yuan, an increase of 4.13%; sign a new contract amount of 1500 billion yuan, an increase of 5.28%.

It is one of the country's key resource enterprises, with outstanding contributions to mineral resource performance, and is expected to provide an important growth engine in the future. The company is one of the key resource enterprises determined by the state, and is rich in copper, cobalt and nickel resources. In 2023, the three active mines achieved a total net profit of 1.214 billion yuan attributable to China, accounting for 14% of the company's net profit to mother. As of the end of 2023, China Metallurgical's copper equity resources were 13.93 million tons, about 21.68% of the copper resources in Zijin Mining, 50.64% of Luoyang Molybdenum, and 1.06 times that of Jiangxi Copper; nickel equity resource production was 0.0336 million tons, about 26% of Huayou Cobalt's nickel production in 2023; cobalt equity resources were 0.14 million tons, or about 3.14% of Luoyang Molybdenum's cobalt resources.

Profit forecast and rating: The company has sufficient on-hand orders, a high increase in new overseas signings, and high profits in metal and mineral resources. We expect the company's EPS to be 0.48 and 0.53 yuan respectively in 24-25. As a leader in the metallurgical engineering industry, the company enjoys a certain leading effect, giving it a price-earnings ratio of 9-10 times in 24 years, and a reasonable value range of 4.33-4.81 yuan, maintaining a “superior to the market” rating.

Risk warning: repayment risk, policy risk, economic downturn risk.