--- title: "Guosheng Securities: The profit contribution of the central state-owned enterprise resource sector in construction has significantly increased, and the sector's value is expected to be reassessed" type: "News" locale: "en" url: "https://longbridge.com/en/news/253058338.md" description: "Guosheng Securities released a research report indicating that the profit contribution of the mineral resources sector of central state-owned enterprises in the construction industry has significantly increased, and the current valuation remains at a historical low, with the potential for value reassessment. This year, the prices of major metals such as gold and copper have fluctuated upward, with the non-ferrous sector index accumulating a rise of 33.27%. Some central state-owned construction enterprises have entered the mineral resources business through engineering exchanges for resources, and the profit contribution has already accounted for an important share. It is expected that the performance contribution of the mineral resources sector will continue to improve in the future" datetime: "2025-08-14T13:11:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/253058338.md) - [en](https://longbridge.com/en/news/253058338.md) - [zh-HK](https://longbridge.com/zh-HK/news/253058338.md) generator: "portal-rs" --- # Guosheng Securities: The profit contribution of the central state-owned enterprise resource sector in construction has significantly increased, and the sector's value is expected to be reassessed According to the Zhitong Finance APP, Guosheng Securities released a research report stating that this year, the prices of major metals such as gold and copper have fluctuated upward, with the non-ferrous sector index (CITIC) achieving a cumulative increase of 33.27%, ranking first among all industries in the A-share market. Some central state-owned enterprises in the construction sector have previously entered the mineral resources business through engineering exchanges for resources and leveraging their industrial chain advantages, resulting in a significant increase in profit contributions from the mineral resources sector, which now occupies a certain proportion. The increase in share prices of construction central state-owned enterprises holding mineral resources has generally lagged behind that of leading non-ferrous companies this year, and their current valuations remain at historical lows, indicating that the value of the mineral resources sector urgently needs to be reassessed. ## The main points of Guosheng Securities are as follows: **The profit contribution of the resource sector of construction central state-owned enterprises occupies an important share, and its value is expected to be reassessed.** This year, against the backdrop of economic stability and the Federal Reserve's interest rate cut cycle, the prices of major metals such as gold and copper have fluctuated upward, with the non-ferrous sector index (CITIC) achieving a cumulative increase of 33.27%, ranking first among all industries in the A-share market. Some central state-owned enterprises in the construction sector have previously entered the mineral resources business through engineering exchanges for resources and leveraging their industrial chain advantages. With the rise in commodity prices in recent years, the profit contribution from the mineral resources sector has significantly increased, now occupying a certain proportion. The increase in share prices of construction central state-owned enterprises holding mineral resources has generally lagged behind that of leading non-ferrous companies this year, and their current valuations remain at historical lows, indicating that the value of the mineral resources sector urgently needs to be reassessed. **Overview of the resource business layout and value reassessment potential of construction central state-owned enterprises:** 1. China Metallurgical Group: Currently operating 3 overseas mines with rich reserves of nickel/cobalt/copper. The net profit of the sector is expected to be 910 million yuan in 2024, accounting for 13.5% of the company's overall net profit. The Pakistan Sia Dike copper mine and the Afghanistan Aynak copper mine (the world's second-largest undeveloped mine) are undergoing preliminary work, with potential performance contributions expected to be considerable. After production, the total net profit of the resource sector is estimated to be about 3.1 billion yuan. Based on the average PE of leading non-ferrous companies in A/H shares for segment valuation, the reassessed A/H market values are 83.6 billion yuan and 64.6 billion yuan, respectively, which is 26%/55% higher than the current market value (as of 2025/8/14, same below). 2. China Railway: Currently operating 5 mines, with copper/cobalt/molybdenum reserves at an industry-leading level. The net profit attributable to the parent company from the subsidiary China Railway Resources is expected to be 3 billion yuan in 2024, accounting for 11% of the company's overall profit. If mineral resources are applied to be cultivated as a main business, there is potential for future acquisitions of new mines to accelerate development. The net profit attributable to the parent company from the resource sector is expected to be 3.3 billion yuan in 2025. Based on the average PE of leading non-ferrous companies in A/H shares for segment valuation, the reassessed A/H market values are 170.3 billion yuan and 123.6 billion yuan, respectively, which is 22%/36% higher than the current market value. 3. China Power Construction: Holds a stake in the world-class Huagang copper-cobalt mine. The investment income from mining rights is expected to be 1 billion yuan in 2024, estimated after tax to be about 800 million yuan, accounting for 6.8% of the company's net profit attributable to the parent company. The estimated valuation of Huagang Mining's equity in 2025 is 12.5 billion yuan, with the power operation sector valued at 42 billion yuan and engineering and other businesses valued at 76.4 billion yuan, totaling a market value of 130.9 billion yuan, which is 23% higher than the current market value. 4. Shanghai Construction Group: Engaged in gold business, with expected revenue of 1.07 billion yuan in 2024 and a gross profit margin of 51%. Based on the company's overall gross profit margin, expense ratio, and income tax rate, the estimated net profit attributable to the parent company is about 190 million yuan, accounting for 8.7% of the company's annual net profit attributable to the parent company. Since the beginning of this year, gold prices have risen and continued to reach new highs, and the sector's performance is expected to significantly improve **Investment Recommendations:** We strongly recommend China Metallurgical Group A (601618.SH)/China Metallurgical Group H (01618), which has a high contribution from the resource sector and promising performance release potential for undeveloped resources; China Railway A (601390.SH)/China Railway H (00390), which has abundant copper/molybdenum resources and leading molybdenum mine scale; China Power Construction (601669.SH), which has a high proportion of investment returns from its stake in Huagang Copper Cobalt Mine; and Shanghai Construction Group (600170.SH), which is positioned in the gold business and is expected to benefit from rising gold prices. **Risk Warning**: Risks of fluctuations in mineral resource prices, risks of mining development progress falling short of expectations, overseas operational risks, and risks of estimation errors, etc ### Related Stocks - [600170.CN](https://longbridge.com/en/quote/600170.CN.md) - [601390.CN](https://longbridge.com/en/quote/601390.CN.md) - [00390.HK](https://longbridge.com/en/quote/00390.HK.md) ## Related News & Research - [EXPLAINER-Haiti's conflict in numbers as gangs inflict another night of terror](https://longbridge.com/en/news/297076683.md) - [MSC halts Russian Black Sea service after drone attack, Bloomberg News reports](https://longbridge.com/en/news/297066548.md) - [Citi Downgrades COSCO SHIP HOLD , Evergreen Marine and Yang Ming to Neutral, Adjusts TPs](https://longbridge.com/en/news/296859156.md) - [EU wheat lower as market eyes Black Sea export relief](https://longbridge.com/en/news/296941541.md) - [TAESA unit Sao Pedro gains about R$ 5.8 million in additional allowed revenue after grid upgrade energization](https://longbridge.com/en/news/297014221.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**