MCC continued to decline by 3.7%, losing the 250-day moving average, raising concerns about the divestment of its non-ferrous metal business

Market concerns about China Metallurgical Group (01618.HK) divesting its non-ferrous metal business affecting profits led to a sharp decline of about 21% in the stock on the previous day (9th). This morning (10th), after a slight opening higher, it turned around and fell below the 250-day moving average (approximately HKD 1.85), currently reported at HKD 1.81, down 3.72%, with a trading volume of 116 million shares and a turnover of HKD 213 million. China Metallurgical Group (601618.SH) A shares continued to decline by 2.6% this morning after hitting the daily limit down yesterday, reported at RMB 2.97.

The group announced after the market closed yesterday that it would divest non-core assets and optimize resource allocation, planning to sell all equity and debt of China Metallurgical Real Estate to Minmetals Land Holdings; planning to sell all equity of the Nonferrous Metals Institute, China Metallurgical Copper Zinc, and Ruimu Management, as well as 67.02% equity of China Metallurgical Jinji to China Minmetals; and planning to sell all equity of Huaye Duda to China Minmetals, with a total cash consideration of RMB 60.676 billion (the same below).

After completion, the company will have a clearer positioning as a core platform under China Minmetals focused on engineering contracting and the cultivation of emerging specialty industries. Assuming the sale is completed by June 30 this year, the estimated loss from the sale is about RMB 2.519 billion. The net proceeds are expected to be around RMB 60.2 billion, of which 75% will be used to support the group's diversified business system; the remainder will be used to supplement working capital and repay existing debts, among other uses