HONG KONG,17 March 2025. CSPI Ratings has affirmed the global scale long-term issuer credit rating (LTICR) of ‘A-’ for China Minmetals Corporation (Minmetals). The rating is concurrently withdrawn for business reasons.
Minmetals is China's largest conglomerate in the metals and mining industry, as well as in the metallurgical construction and engineering sector. The company's credit profile is closely linked to that of the Chinese central government, as we believe the government has a strong willingness to provide support if the company faces financial distress.
KEY RATING RATIONALES
Credit Strengths
Strong support from the central government. As a wholly owned subsidiary of the central State-owned Assets Supervision and Administration Commission (SASAC), Minmetals plays a crucial role in ensuring China's metal resources security. The company serves as a key platform for the Chinese government to acquire overseas mining resources and safeguard the nation's base metals supply. Over the past decade, Minmetals has consistently received strong support from the central government in various forms, including overseas resource development, horizontal and vertical consolidations and acquisitions, capital injections, and subsidies. Given its strong linkage with and strategic importance to the central government, we believe that the central SASAC will continue to provide support to the company.
Extensive and diversified business portfolio. Minmetals is a leading Chinese mining company, featuring a diversified business portfolio that spans a wide range of mineral and metal products, as well as a strong presence across various geographic locations. Additionally, the company is a dominant player in China's engineering and construction industry, with a near-monopoly in the domestic metallurgical engineering and construction market. In the nine months of 2024, Minmetals reported RMB618 billion in revenue and ranked 20th among the Fortune China companies. We believe that high business diversification helps the company to reduce its business risks by mitigating its cyclical cash flow from the volatile metals and mining business.
Credit Weaknesses
Weak profitability. The company has a low EBITDA margin ranging from 6%-8.5% during 2019-2023, dragged by its low-profit trading business and lower non-ferrous base metal prices. We expect the company may face some pressure on profitability in the next 12 months due to lower estimated base metal prices.
High operating risks for overseas projects. The company has acquired multiple overseas mines and operates in overseas engineering and construction (E&C) projects, which are subject to the uncertainties of global politics, the economy, and local community culture. As a result, the operation of these overseas projects may face challenges if global uncertainties increase.
Note: ratings mentioned above are unsolicited.
ANALYSTS CONTACT
Primary Analyst
Winnie Guo
+852 3615 8344
Secondary Analyst
Tingting Qiao
+852 3615 8339
tingting.qiao@cspi-ratings.com
Committee Chair
Larissa Wu
+852 3615 8317
MEDIA CONTACT
RATING SERVICE CONTACT
Allen Wei
+852 3615 8324
Date of Relevant Rating Committee: 10 March 2025
Additional information is available on www.cspi-ratings.com
Related Criteria
General Corporate Rating Criteria (15 March 2018)
Corporate Financial Adjustments and Ratio Definitions (7 May 2018)
Government-Related Entities Rating Criteria (31 Aug 2018)
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