On December 8, 2025, Metallurgical Corporation of China (MCC) issued an announcement, causing its stock price to plummet nearly to the daily limit in the following trading session.
The core message of MCC's announcement was that, in response to the state-owned enterprise's focus on core businesses and the optimization of resource allocation, the company would divest its real estate and resource-related assets to affiliated parties.
Specifically, MCC's real estate subsidiary (MCC Real Estate and its debt) was sold to Minmetals Land for RMB 31.24 billion, while five resource-related subsidiaries were transferred to its controlling shareholder, China Minmetals Corporation, for RMB 29.44 billion, totaling RMB 60.68 billion.
**Real Estate Divestment: Slimming Down** MCC Real Estate reported a loss of RMB 4.85 billion in 2024 and a staggering RMB 25.4 billion loss from January to July 2025. As of July 31, 2025, its net assets were negative at RMB -16.2 billion. The sale price of RMB 31.2 billion closely matched the combined value of MCC's RMB 46.1 billion in debt claims and the negative equity of RMB -16.2 billion. While the divestment may seem like selling at a low point, it helps MCC avoid deeper financial trouble.
**Resource Divestment: Cutting the Fat** The resource-related subsidiaries being sold include MCC Tongxin Zinc & Copper Co., Ltd., Ramu Nickel & Cobalt Management (MCC) Ltd., MCC Jinji Mining Development Co., Ltd., China Huaye Duda Mining Co., Ltd., and China Nonferrous Engineering Co., Ltd., with valuations totaling RMB 29.4 billion. These five subsidiaries collectively generated a net profit of RMB 1.209 billion in 2024.
**Killing the Golden Goose?** The divestment raises concerns about whether MCC is giving up its most profitable assets. In 2023, MCC's resource development segment reported a gross profit of RMB 2 billion, with the five subsidiaries contributing RMB 1.209 billion in net profit—suggesting they represent the bulk of the company's resource-related earnings. Notably, MCC Tongxin Zinc & Copper, MCC Jinji Mining, and China Nonferrous Engineering were among the top three profitable subsidiaries being sold.
Investors reacted strongly, interpreting the move as "killing the golden goose"—especially as copper and other nonferrous metal prices hit record highs. Without its real estate and resource businesses, MCC is left primarily with engineering operations, significantly diminishing its investment appeal.
The situation mirrors what could happen to other state-owned enterprises like China Railway Group if they were to divest their resource assets—likely triggering a similar stock plunge.
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