Core Viewpoint - China Metallurgical Group Corporation (China MCC) shares rose over 7% due to a significant increase in global copper prices following a fatal landslide at Freeport McMoRan's Grasberg mine in Indonesia, raising supply chain concerns [1] Group 1: Market Impact - Freeport McMoRan's Grasberg mine, the second-largest copper mine globally, has suspended production due to the landslide, with a projected 35% drop in copper-gold output by 2026 [1] - The incident has led to a surge in copper prices, influenced by supply-demand imbalances and expectations of interest rate cuts by the Federal Reserve [1] Group 2: Company Developments - China MCC's copper resource at the Pakistan Sia Dyk mine is 3.78 million tons, with all relevant approvals expected to be granted by mid-2025, and domestic procedures are ongoing [1] - The Afghanistan Aynak copper mine, one of the largest undeveloped copper deposits, has a total resource of 12.36 million tons, with positive progress in preliminary work [1] Group 3: Analyst Insights - CITIC Securities' recent report indicates that China MCC's copper mining development is progressing positively, which may lead to a revaluation of the company's assets [1] - The company’s multiple overseas operating mines are expected to see a valuation increase, with the Aynak copper mine's preliminary work advancing and the Sia Dyk mine's reserves increasing through exploration [1]

Group 1 - China Metallurgical Group Corporation (China MCC) experienced a 2.08% decline in stock price, reaching 3.30 CNY per share, with a trading volume of 262 million CNY and a turnover rate of 0.44%, resulting in a total market capitalization of 68.388 billion CNY [1] - The stock price of China MCC has fallen for four consecutive days, with a cumulative decline of 5.44% during this period [1] - China MCC was established on December 1, 2008, and listed on September 21, 2009, with its main business activities including engineering contracting (90.83% of revenue), resource development, equipment manufacturing, real estate development, and other services [1] Group 2 - Zhejiang Merchants Securities Asset Management has a fund that heavily invests in China MCC, specifically the Zhejiang Huijin Quantitative Selected Stock A fund, which held 329,600 shares in the second quarter, unchanged from the previous period, accounting for 0.77% of the fund's net value [2] - The fund has incurred a floating loss of approximately 23,100 CNY today, with a total floating loss of 62,600 CNY during the four-day decline [2] - The Zhejiang Huijin Quantitative Selected Stock A fund was established on July 1, 2021, with a current scale of 63.808 million CNY, and has achieved a year-to-date return of 26.45% [2]

Group 1 - The report maintains a positive investment rating for the company, indicating a favorable outlook based on recent market performance [2][5] - The company's mineral resources are abundant, with stable operations in its existing mines, producing nickel, cobalt, copper, lead, and zinc [8][9] - In the first half of 2025, the company produced 15,534 tons of nickel, 1,435 tons of cobalt, 11,562 tons of copper, 5,029 tons of lead, and 23,331 tons of zinc, with respective year-on-year changes of -1.91%, -0.49%, 1.22%, 13.75%, and 5.32% [9][10] Group 2 - The company is making steady progress on its undeveloped copper mines, with expectations to enter the construction phase this year [30][33] - The Pakistan Siyadik copper mine has a resource volume of 3.78 million tons, with all relevant approval processes applied for and largely approved as of the first half of 2025 [30][31] - The Afghanistan Aynak copper mine, with a resource volume of 12.36 million tons, has seen significant progress, with the access road completed and mining operations expected to start by the end of 2025 [33][34] Group 3 - The report draws comparisons with Hongda Co., indicating that the company's valuation in the non-ferrous metal sector is expected to be reassessed positively [34][36] - Since the breakthrough in project progress on August 2, 2025, the market capitalization of the company has increased by approximately 80.15 billion and 85.01 billion for its A and H shares respectively [36][38] - The company holds a 75% stake in the Aynak copper mine and an 80% stake in the Siyadik copper mine, corresponding to an equity resource volume of approximately 12.29 million tons [38][39]

Investment Rating - The report maintains a "Buy" rating for key companies including China Chemical, Donghua Technology, Sanwei Chemical, China Metallurgical Group, China Railway Group, and Sichuan Road and Bridge [10][11][32]. Core Insights - The Xinjiang region is expected to enter a period of intensive policy catalysts, with the central government likely to provide more support, enhancing the performance and valuation of the Xinjiang sector [2][10][13]. - The report emphasizes two main investment directions: transportation infrastructure and coal chemical projects in Xinjiang, driven by the region's strategic importance and resource endowment [2][6][10]. - Key companies recommended include local infrastructure leaders such as Xinjiang Communications Construction and Beixin Road and Bridge, as well as coal chemical leaders like China Chemical and Donghua Technology [10][13]. Summary by Sections Transportation Infrastructure - Xinjiang plans to complete a transportation investment of 800 billion yuan in 2025, with a year-on-year increase of 13.5% [2][22]. - The region aims to achieve a "county-to-county" highway network and fill gaps in western railway infrastructure, indicating significant long-term construction potential [2][22]. - Key players in this sector include Xinjiang Communications Construction, Beixin Road and Bridge, and other local construction firms [10][22]. Coal Chemical Projects - Xinjiang has over 800 billion yuan in coal chemical projects under construction or planned, with significant investment expected in the coming years [6][23]. - The report forecasts annual investments of approximately 997 billion yuan in 2025, 2077 billion yuan in 2026, and 2326 billion yuan in 2027 [6][28]. - Companies such as China Chemical, Donghua Technology, and Sanwei Chemical are highlighted as primary beneficiaries of this sector's growth [10][23]. Valuation and Market Potential - China Metallurgical Group is estimated to have a total value of 718 billion yuan, with a potential upside of 71% based on current market valuation [7][31]. - China Railway Group's estimated value is 1443 billion yuan, with a potential upside of 70% [7][31]. - The report also notes the rising prices of gold and copper, suggesting a re-evaluation of the value of resource-rich construction companies [10][13]. High Dividend Stocks - Sichuan Road and Bridge is recommended for its high dividend yield, projected at 6.4% for 2025, with significant growth in net profit expected [10][9]. - The report emphasizes the attractiveness of high dividend stocks in the current market environment [10][9].

重要提示 不適用 六. 前瞻性陳述的風險聲明 本報告中涉及的未來計劃等前瞻性陳述，不構成公司對投資者的實質性承諾，請投資者注意投資風險。 七. 是否存在被控股股東及其他關聯方非經營性佔用資金情況 否 八. 是否存在違反規定決策程序對外提供擔保的情況 否 九. 是否存在半數以上董事無法保證公司所披露半年度報告的真實性、準確性和完整性 否 十. 重大風險提示 公司已在半年度報告中詳細描述了公司可能面臨的風險，敬請查閱本報告「董事會報告、管理層討論與分 析」章節關於公司可能面臨風險的描述。 十一. 其他 除特別註明外，本報告所有金額幣種均為人民幣。本報告中任何數據及表格所載的數據之差，是由於四 捨五入計算所致。 2025 中期報告 1 一. 本公司董事會及董事、高級管理人員保證半年度報告內容的真實性、準確性、完整性，不存在虛假記載、 誤導性陳述或重大遺漏，並承擔個別和連帶的法律責任。 二. 本報告經公司2025年8月29日召開的第三屆董事會第七十六次會議審議通過，公司全體董事出席董事會會議。 三. 本公司2025年半年度財務報表已經德勤華永會計師事務所（特殊普通合夥）審閱，但未經審計。德勤華永 會計師事務所（特殊普 ...

Core Viewpoint - China Metallurgical Group Corporation (China MCC) experienced a decline in stock price and significant net outflow of funds, indicating potential investor concerns about its financial performance and market position [1][2]. Financial Performance - As of June 30, 2025, China MCC reported a revenue of 237.53 billion yuan, a year-on-year decrease of 20.52%, and a net profit attributable to shareholders of 3.10 billion yuan, down 25.31% compared to the previous year [2]. - The company has cumulatively distributed dividends of 17.21 billion yuan since its A-share listing, with 4.37 billion yuan distributed over the last three years [3]. Stock Market Activity - On September 18, 2023, China MCC's stock price fell by 2.02% to 3.39 yuan per share, with a trading volume of 280 million yuan and a turnover rate of 0.46%, resulting in a total market capitalization of 70.25 billion yuan [1]. - The stock has seen a year-to-date increase of 4.50%, with a decline of 1.17% over the last five trading days, a rise of 2.42% over the last 20 days, and a significant increase of 16.74% over the last 60 days [1]. Shareholder Structure - As of June 30, 2025, the number of shareholders for China MCC was 312,000, a decrease of 1.90% from the previous period [2]. - Major shareholders include China Securities Finance Corporation, holding 589 million shares, and Hong Kong Central Clearing Limited, which increased its holdings by 12.5 million shares to 429 million [3].

Core Points - The resumption of the China Metallurgical Group's construction project in Sri Lanka reflects the close communication and cooperation between China and Sri Lanka, showcasing the positive development of bilateral relations [1] - The project is considered a significant national initiative for Sri Lanka, aimed at enhancing the socio-economic conditions and living standards of its people [1] - The project is expected to play a crucial role in helping Sri Lanka recover from its economic crisis and transition towards stable development [1] Project Details - The Central Expressway project will connect Colombo, the capital of Sri Lanka, with the central city of Kandy, and will integrate with three existing expressways to create a comprehensive highway network [1] - The completion of the project is anticipated to significantly improve the efficiency and convenience of Sri Lanka's highway network, benefiting two-thirds of the provinces in the country [1] - The project is expected to directly promote the development of tourism, transportation, and agricultural processing industries in Sri Lanka [1]

Investment Rating - The report assigns an "Accumulate" rating for the construction engineering industry [8] Core Insights - In August, broad infrastructure investment decreased by 6.4%, with a month-on-month decline of 4.5 percentage points, while narrow infrastructure investment fell by 5.9%, with a month-on-month decline of 0.8 percentage points [4][6] - Real estate investment in August saw a year-on-year decline of 19.9%, with the drop expanding compared to July [7] - The report highlights a trend towards stabilization in the real estate market, despite ongoing challenges [7] - Infrastructure investment from January to August grew by 2.0% year-on-year, outpacing overall investment growth [7] Summary by Sections Infrastructure Investment - Broad infrastructure investment in August decreased by 6.4%, a decline of 12.6 percentage points compared to the same month in 2024, and a month-on-month drop of 4.5 percentage points [6] - Narrow infrastructure investment fell by 5.9%, with a year-on-year decline of 7.1 percentage points and a month-on-month decrease of 0.8 percentage points [6] - Specific sectors such as water conservancy saw a significant drop of 29.8% year-on-year, while public facilities decreased by 11.6% [6] Real Estate Market - Real estate investment in August dropped by 19.9% year-on-year, with sales area declining by 11.0% [7] - New construction area fell by 19.8%, and completed area decreased by 21.2% [7] - The report indicates that the real estate market is moving towards stabilization, with inventory reduction efforts showing results [7] Investment Recommendations - The report recommends undervalued high-dividend stocks such as China State Construction (dividend yield 4.85%), China Railway Construction (dividend yield 3.74%), and Tunnel Corporation (dividend yield 4.48%) [7] - It also highlights the potential for growth in private investment in infrastructure, particularly in green energy [7]

Summary of Conference Call Records Industry Overview - The real estate market is expected to benefit from policy stimulus and the traditional sales peak in the short term, but faces challenges in Q4 due to high base effects. Attention is needed on whether sales data can remain stable, while investment data shows a trend of stabilization despite a decrease, and new home prices still face downward pressure [1][3][4]. Key Points and Arguments Real Estate Sector - The investment success rate in the real estate sector is improving, with a better competitive landscape among leading companies. Gross margins are expected to improve significantly by Q2 next year. Recommended companies include Shenzhen Investment, China Resources, and China Overseas, as well as diversified targets like Zhangjiang Hi-Tech and Quzhou Development [1][7]. - As of August 2025, real estate sales data showed a year-on-year decline of approximately 7%, an improvement from a 14% decline the previous year. This decline is attributed to a significant reduction in land purchases and falling prices of existing assets [3]. - The second-hand housing market is currently more reflective of consumption rather than investment attributes, with price fluctuations primarily influenced by depreciation logic until new housing stabilizes [6]. Construction Industry - The construction industry has been under pressure recently, with cautious performance noted over the past two months. However, there is optimism for Q4 due to expected policy support for stable growth [8][9]. - Investment opportunities in the construction sector are suggested to be focused on high-dividend assets, metal asset revaluation, and companies benefiting from debt resolution policies, such as China Railway Construction [11][12]. Building Materials Sector - August data for the building materials sector was weak, with cement sales down approximately 8% year-on-year. However, expectations for fiscal stimulus are increasing, and companies focused on domestic demand have shown improved fundamentals [10][12]. - The waterproofing sector is highlighted as a key area for investment, with companies like Dongfang Yuhong recommended due to their strong fundamentals and potential benefits from policy planning [1][12]. Additional Important Insights - The global context of interest rate cuts is creating more certainty in external markets, particularly in overseas cement, fiberglass, and photovoltaic glass sectors. Companies like Huaxin Cement, China Jushi, and Xinyi Solar are noted as potential investment opportunities [13]. - The 2025 anti-involution policy is expected to have a profound impact on the supply side, with a focus on sectors like cement and photovoltaic glass, and companies with independent growth logic such as Henkel Group and Puyang Huicheng [14][15]. - Strategies for addressing poor performance in August include focusing on domestic demand, overseas demand, and anti-dumping measures, with specific recommendations for companies like China Jushi, Huaxin Cement, and Xinyi Solar [16].

Investment Rating - Industry rating is maintained at "Outperform the Market" [6] Core Insights - Infrastructure investment in August shows a narrowing year-on-year decline, with a focus on investment opportunities in the central and western regions [1] - Real estate sales area decreased by 4.7% year-on-year from January to August, with a significant drop of 11% in August alone [2] - Cement prices have started to rise after a prolonged period of decline, indicating potential recovery in profitability for cement companies [3] - The flat glass production showed a year-on-year decline of 4.5% from January to August, but the decline is narrowing, suggesting a potential improvement in demand [4] Summary by Sections Infrastructure Investment - From January to August, real estate development investment decreased by 12.9%, while narrow and broad infrastructure investments increased by 2% and 5.4% respectively [1] - Cumulative new special bonds reached 32,641.37 billion yuan, up 26.9% year-on-year, indicating strong support for infrastructure projects [1] Real Estate Market - New construction area decreased by 19.5% year-on-year from January to August, with a monthly decline of 19.8% in August [2] - Completion area saw a year-on-year decline of 17% from January to August, with a monthly drop of 21.2% in August [2] Cement Industry - Cement production from January to August was 1.105 billion tons, down 4.8% year-on-year, with August production at 148 million tons, a 6.2% decline [3] - The average cement price in August was 349 yuan per ton, showing a slight increase from earlier in the month [3] Glass Industry - Flat glass production from January to August was 64.818 million weight cases, down 4.5% year-on-year, with August production at 8.267 million weight cases, a 2% decline [4] - The market is showing signs of demand improvement as inventory levels decrease and production lines resume operations [4]