METALLURGICAL CORPORATION OF CHINA(01618.HK):IMPAIRMENT PROVISION DRAGS PROFIT;ORDERS MAINTAIN STEADY GROWTH
METALLURGICAL CORPORATION OF CHINA(01618.HK):IMPAIRMENT PROVISION DRAGS PROFIT;ORDERS MAINTAIN STEADY GROWTH
2023 results miss our expectations
2023 年的業績未達到我們的預期
Metallurgical Corporation of China (MCC) announced its 2023 results: Revenue rose 6.95% YoY to Rmb633.87bn and attributable net profit fell 15.6% YoY to Rmb8.67bn. In 4Q23, revenue fell 14.9% YoY to Rmb166.55bn and attributable net profit dropped 86.3% YoY to Rmb487mn. The firm's 2023 earnings missed our expectations, mainly due to higher-than-expected impairment provisions in 4Q23.
中國冶金工業集團公司（MCC）公佈了其2023年業績：收入同比增長6.95％，至人民幣6,338.7億元，應占淨利潤同比下降15.6％，至86.7億元人民幣。在23年第四季度，收入同比下降14.9％，至人民幣1665.5億元，應占淨利潤同比下降86.3％，至人民幣4.87億元。該公司2023年的收益未達到我們的預期，這主要是由於23年第四季度的減值準備金高於預期。
Engineering business grows steadily; gross margin improves. In 2023, revenue from the engineering contracting business rose 9.3% YoY to Rmb585.48bn, and gross margin rose 0.25ppt YoY to 9.1%. Its engineering business maintains sound growth momentum, with returns improving.
工程業務穩步增長；毛利率提高。2023年，工程承包業務收入同比增長9.3％至人民幣5854.8億元，毛利率同比增長0.25個百分點至9.1％。其工程業務保持良好的增長勢頭，回報率有所提高。
Resource development and real estate businesses under pressure. In 2023, revenue from the resource development business fell 23% YoY to Rmb6.82bn, and gross margin fell 5.36ppt YoY to 30.99%. Revenue from the comprehensive real estate business fell 27% YoY to Rmb16.52bn and gross margin dropped 3.11ppt YoY to 7.89%.
資源開發和房地產業務面臨壓力。2023年，資源開發業務收入同比下降23％，至人民幣68.2億元，毛利率同比下降5.36個百分點至30.99％。綜合房地產業務收入同比下降27％，至165.2億元人民幣，毛利率同比下降3.11個百分點至7.89％。
Full-year operating cash flow under pressure; cash flow in 4Q23 significantly improved. The firm's net operating cash flow dropped 67.5% YoY to Rmb5.89bn in 2023. In 4Q23, its net operating cash flow rose Rmb8.65bn YoY to Rmb28.37bn.
全年運營現金流面臨壓力；23年第四季度的現金流顯著改善。2023年，該公司的淨運營現金流同比下降67.5％，至58.9億元人民幣。在23年第四季度，其淨運營現金流同比增長86.5億元人民幣至283.7億元人民幣。
Impairment provision weighs on profit. The firm booked Rmb1.39bn in asset impairment losses and Rmb3.54bn in credit impairment losses in 4Q23, weighing on full-year earnings.
減值準備影響利潤。該公司在23年第四季度錄得13.9億元人民幣的資產減值損失和35.4億元人民幣的信用減值損失，打壓了全年收益。
Trends to watch
值得關注的趨勢
Engineering revenue and orders grow steadily; growth of core business shows resilience. In 2023, revenue from the engineering contracting business rose 9.3% YoY, with new contracts increasing 6.0% YoY to about Rmb1.42trn. The firm's new overseas contracts increased 43.72% YoY to Rmb63.38bn in 2023, a record high. We expect the firm's core business to maintain solid growth.
工程收入和訂單穩步增長；核心業務的增長顯示出彈性。2023年，工程承包業務收入同比增長9.3％，新合同同比增長6.0％，達到約1.42萬億元人民幣。該公司的新海外合同在2023年同比增長43.72％至人民幣633.8億元，創歷史新高。我們預計該公司的核心業務將保持穩健增長。
Resource development business under pressure; watch potential earnings growth. In 2023, revenue and net profit of the firm's resource development business dropped 23.1% and 5.6% YoY, as prices of nickel, zinc, and cobalt dropped from highs in 2021–2022. Nickel output of its project in Papua New Guinea fell 2.03% YoY and cobalt output grew 2.85% YoY. Crude copper output of its project in Saindak, Pakistan rose 4.26% YoY. Zinc output and lead output of its project in Dudda, Pakistan fell 2.49% and 11.79% YoY. We suggest paying attention to the recovery of ore prices and the potential upside in sales volume, prices, and earnings of the firm's copper-gold mine project in Saindak driven by rising copper prices and production capacity expansion.
資源開發業務面臨壓力；注意潛在的收益增長。2023年，由於鎳、鋅和鈷的價格從2021年至2022年的高點回落，該公司資源開發業務的收入和淨利潤同比下降了23.1％和5.6％。其在巴布亞新幾內亞的項目的鎳產量同比下降2.03％，鈷產量同比增長2.85％。其在巴基斯坦賽恩達克的項目的粗銅產量同比增長4.26％。其在巴基斯坦杜達的項目的鋅產量和鉛產量同比下降2.49％和11.79％。我們建議關注礦石價格的回升，以及在銅價上漲和產能擴張的推動下，該公司位於賽恩達克的銅金礦項目的銷量、價格和收益的潛在上升空間。
Financials and valuation
財務和估值
Given the lackluster downstream demand, we lower our 2024 and 2025 attributable net profit forecast 34.4% and 34.4% to Rmb9.25bn and 10.29bn. A-shares are trading at 7.5x and 6.8x 2024e and 2025e P/E, and H- shares are trading at 3.3x and 2.9x 2024e and 2025e P/E. The firm's current valuation is attractive. We maintain OUTPERFORM for A-shares and H- shares, and maintain our TPs of Rmb4.6 (10.3x and 9.2x 2024e and 2025e P/E) offering 36.9% upside and HK$2.13 (4.2x and 3.7x 2024e and 2025e P/E) offering 27.5% upside.
鑑於下游需求疲軟，我們將2024年和2025年的可歸屬淨利潤預測下調了34.4％和34.4％，至92.5億元人民幣和102.9億元人民幣。A股的市盈率爲2024年和2025年的7.5倍和6.8倍，H股的市盈率爲3.3倍和2.9倍，2025年的市盈率。該公司目前的估值很有吸引力。我們維持A股和H股的跑贏大盤，維持4.6元人民幣（2024年和2025年市盈率爲10.3倍和9.2倍），上漲幅度爲36.9％，上漲幅度爲2.13港元（4.2倍和3.7倍，2025年市盈率爲27.5％）。
Risks
風險
Falling ore prices; disappointing project progress.
礦石價格下跌；項目進展令人失望。
譯文內容由第三人軟體翻譯。