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Shares of the Metallurgical Corporation of China hit the daily trading limit on the stock exchange after the state-owned construction conglomerate announced plans to divest non-core assets worth over CNY60.6 billion (approximately USD8.6 billion) to sharpen its focus on its primary operations.
The company’s stock closed 10% lower at CNY3.05 (about 43 cents) in Shanghai today.
It was revealed yesterday that MCC will transfer its entire equity stake and creditor rights in MCC Real Estate to its controlling shareholder, China Minmetals, for more than CNY31.2 billion.
Additionally, Minmetals will acquire MCC’s complete ownership interests in China Enfi Engineering, MCC Copper and Zinc, and Ramu Nico Management MCC, along with a 67% stake in MCC Metallurgical and Chemical. MCC also plans to sell its entire stake in MCC Huaye Duddar Mining to Minmetals or another designated entity.
Once these transactions are finalized, MCC’s role as a core subsidiary of Minmetals, with a focus on engineering contracting and specialized industries, will become more distinct and prominent.
Looking ahead, MCC intends to concentrate on metallurgical engineering, non-ferrous metal mining, engineering construction and management, high-end infrastructure projects, industrial architecture, and emerging sectors to foster high-quality growth.
Among China’s top eight state-owned enterprises (SOEs), only Power Construction Corporation of China, China Energy Engineering Corporation, and China National Chemical Engineering Group experienced revenue growth in the first three quarters of the year compared to the previous year. MCC, however, saw a 19% decline, with revenue falling to CNY335 billion (around USD47.4 billion).
Of those eight SOEs, only CNCEC reported an increase in net profit during the same period. MCC experienced the largest decrease, with net profit dropping approximately 42% in the third quarter to CNY3.4 billion.
On October 23, Minmetals’ Hong Kong-listed subsidiary, Minmetals Land, announced its intention to delist. At that time, sources indicated that if the privatization effort was successful, Minmetals Land could be integrated and restructured alongside MCC Real Estate, another Minmetals subsidiary in the property sector.
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