Financial Performance - Revenue for the first half of 2023 was approximately RMB 1,492.2 million, a decrease of 50.4% year-on-year[4] - Net profit for the first half of 2023 was approximately RMB 569.1 million, a decrease of 58.2% year-on-year[4] - Gross profit margin for the reporting period was 54.7%, and net profit margin was 38.1%, both at relatively high levels in the industry[5] - Revenue decreased by 50.4% to approximately RMB 1,492.2 million in the first half of 2023 compared to RMB 3,010.0 million in the same period last year, primarily due to a 6.3% decline in the average selling price of 5,000 kcal coal products and a 48.1% drop in sales volume[12] - Gross profit margin declined to 54.7% in the first half of 2023 from 69.6% in the same period last year, driven by lower coal prices and increased fixed costs per ton[14] - Net profit attributable to shareholders decreased by 58.2% to approximately RMB 570.2 million for the six months ended June 30, 2023, compared to RMB 1,365.3 million in the same period last year[22] - Net profit margin declined to 38.1% for the six months ended June 30, 2023, from 45.3% in the same period last year[22] - Revenue for the six months ended June 30, 2023 decreased to RMB 1,492.20 million from RMB 3,009.96 million in the same period last year[47] - Gross profit for the six months ended June 30, 2023 was RMB 816.91 million, down from RMB 2,095.34 million in the same period last year[47] - Net profit attributable to shareholders for the six months ended June 30, 2023 was RMB 570.24 million, compared to RMB 1,365.35 million in the same period last year[48] - Basic and diluted earnings per share for the six months ended June 30, 2023 were RMB 6.76 cents, down from RMB 16.20 cents in the same period last year[48] - Net profit for the six months ended June 30, 2023, was RMB 570,236 thousand, with a total comprehensive income of RMB 571,994 thousand[52] - Revenue from coal product sales decreased to RMB 1,489,107 thousand in the first half of 2023, down from RMB 3,007,788 thousand in the same period of 2022[69] - Basic earnings per share were RMB 570,236 thousand for the first half of 2023, compared to RMB 1,365,349 thousand in the same period of 2022[75] Operational Highlights - The company's Dafanpu Coal Mine resumed normal production operations in May 2023 after facing unfavorable underground mining conditions[4] - The company completed the acquisition of Ningxia Power Mining Co., Ltd. in 2022, which is expected to expand coal production capacity and drive profit growth[5] - The company continues to promote the construction of a safe, efficient, and green mine at Dafanpu Coal Mine, with the intelligent mining face passing acceptance in the first half of 2023[4] - The company expects coal supply to continue growing in the second half of 2023, but at a limited rate, with demand expected to remain resilient as the economy gradually recovers[5] - The company's Dafangpu Coal Mine in Inner Mongolia has maintained its "Class A Mine" status for 8 consecutive years and passed the national first-level safety production standardization and intelligent mining face acceptance[10] - The company has developed an ecological industry chain integrating agricultural planting and livestock breeding in the mine reclamation area, supporting sustainable development[10] - The company plans to expand its coking coal business with an additional 2.1 million tons of annual capacity by 2027, driven by the Ningxia coal mine projects[11] - The company's pig farming subsidiary, Inner Mongolia Liangyun Livestock Development Co., Ltd., is expected to reach full production capacity by the end of 2025, with 7,200 breeding sows and an annual output of 170,000 pigs[11] - Capital expenditure for coal mine development and production activities amounted to approximately RMB 119.1 million for the six months ended June 30, 2023[44] - Total production costs for the six months ended June 30, 2023 were RMB 704.74 million, including mining costs of RMB 193.61 million and transportation costs of RMB 333.15 million[45] - The company's main business remains the extraction and sale of coal products, with no significant changes during the period[57] - The company is considering diversifying its business by actively seeking potential mining projects or entering new non-mining businesses to expand its existing operations[59] Financial Position and Cash Flow - The company proposed an interim dividend of 3.0 HK cents per share, with a total expected distribution of HK$252.9 million, compared to HK$505.8 million in the same period last year[23] - Net cash generated from operating activities was RMB 36.8 million for the six months ended June 30, 2023, a significant decrease from RMB 1,584.5 million in the same period last year[24][25] - Bank cash decreased to RMB 348.0 million as of June 30, 2023, from RMB 551.9 million as of December 31, 2022, primarily due to a reduction of RMB 204.1 million[26] - The net debt ratio increased to 15.0% as of June 30, 2023, compared to 5.0% as of December 31, 2022[27] - Capital expenditures for the six months ended June 30, 2023, amounted to approximately RMB 354.8 million, primarily used for proposed acquisitions and equipment purchases for the Dafanpu Coal Mine[30] - The company has capital commitments of approximately RMB 1,175.6 million as of June 30, 2023, mainly for acquisitions, construction, and mining equipment[30] - The company estimates future compensation payments of approximately RMB 21.4 million for relocation of households affected by mining activities[31] - Bank loans of RMB 1,434.4 million as of June 30, 2023, were guaranteed by Mr. Zhang Li and Mr. Zhang Liang, and/or secured by pledged deposits of RMB 800.0 million and mining rights of the Dafanpu Coal Mine[28][32] - Total non-current assets as of June 30, 2023 increased to RMB 8,184.68 million from RMB 7,880.43 million as of December 31, 2022[49] - Total current liabilities as of June 30, 2023 increased to RMB 2,751.74 million from RMB 1,815.42 million as of December 31, 2022[49] - Total equity attributable to shareholders as of June 30, 2023 was RMB 6,357.57 million, compared to RMB 6,328.79 million as of December 31, 2022[51] - Total equity as of June 30, 2023, was RMB 6,344,406 thousand, compared to RMB 6,316,790 thousand at the beginning of the year[52] - Operating cash flow for the six months ended June 30, 2023, was RMB 36,848 thousand, a significant decrease from RMB 1,584,465 thousand in the same period last year[55] - Investment activities used a net cash flow of RMB 394,566 thousand, primarily due to payments for property, plant, and equipment, and loans to related parties[55] - Financing activities generated a net cash inflow of RMB 153,600 thousand, mainly from new bank loans of RMB 734,370 thousand[55] - Cash and cash equivalents decreased by RMB 204,118 thousand to RMB 348,015 thousand as of June 30, 2023[55] - The company declared dividends of RMB 543,217 thousand during the period[52] - Retained earnings as of June 30, 2023, were RMB 3,624,717 thousand, slightly down from RMB 3,648,565 thousand at the beginning of the year[52] - The company allocated RMB 69,968 thousand to maintenance and production funds during the period[52] - The company's current liabilities net amount was RMB 943,206,000 as of June 30, 2023, with estimated total acquisition costs exceeding RMB 3 billion and additional capital expenditures of approximately RMB 1.2 billion to be paid in the foreseeable future[59] - The company's ability to fund acquisitions and capital expenditures depends on future operating cash inflows, bank loan financing influenced by government macro-control policies, and coal market price fluctuations[59] - Total assets increased to RMB 9,993,213 thousand as of June 30, 2023, compared to RMB 9,492,641 thousand as of December 31, 2022[66] - Total liabilities rose to RMB 3,648,807 thousand as of June 30, 2023, up from RMB 3,175,851 thousand as of December 31, 2022[66] - Property, plant, and equipment increased to RMB 1,809,418 thousand as of June 30, 2023, up from RMB 1,716,365 thousand as of January 1, 2023[76] - The company's right-of-use assets decreased from RMB 116,873 thousand as of January 1, 2023, to RMB 42,454 thousand as of June 30, 2023, due to disposals and amortization[77] - Intangible assets slightly decreased from RMB 3,210,599 thousand as of January 1, 2023, to RMB 3,201,954 thousand as of June 30, 2023, with minimal additions and amortization[78] - The company has prepaid RMB 2,679,986 thousand for proposed acquisitions from related parties, including RMB 1,080,256 thousand for the acquisition of Guizhou Power Energy Co., Ltd[79] - The company prepaid RMB 803,000 thousand for property acquisitions from Shi Di Group, with the total consideration for these properties being RMB 809,480,000[80] - A prepayment of RMB 564,625 thousand was made for property acquisitions from Hainan Hangxiao Real Estate Development Co., Ltd[81] - The company prepaid USD 33,178,763 (RMB 232,105 thousand) for the acquisition of 73% equity in Xingyao Enterprise Co., Ltd[82] - Loans granted to related parties increased from RMB 158,408 thousand as of December 31, 2022, to RMB 298,810 thousand as of June 30, 2023[83] - Trust wealth management investment with Northern International Trust decreased from RMB 206,195 thousand to RMB 190,899 thousand from December 31, 2022, to June 30, 2023[84] - Trust wealth management investment with Beijing International Trust increased from RMB 75,323 thousand to RMB 80,842 thousand from December 31, 2022, to June 30, 2023[85] - Coal product inventory increased from RMB 56,746 thousand to RMB 64,615 thousand from December 31, 2022, to June 30, 2023[86] - Trade receivables decreased significantly from RMB 5,227 thousand to RMB 848 thousand from December 31, 2022, to June 30, 2023[87] - Cash and bank balances decreased from RMB 551,866 thousand to RMB 348,015 thousand from December 31, 2022, to June 30, 2023[89] - Restricted deposits increased from RMB 75,903 thousand to RMB 120,540 thousand from December 31, 2022, to June 30, 2023[90] - Dividends payable increased to RMB 543,217 thousand as of June 30, 2023, from zero as of December 31, 2022[91] - Payable for materials and construction increased from RMB 120,703 thousand to RMB 160,943 thousand from December 31, 2022, to June 30, 2023[92] - Bank loans increased to RMB 1,467,370 thousand as of June 30, 2023, compared to RMB 883,000 thousand as of December 31, 2022, with significant secured loans due in 2024[93][94] - Lease liabilities decreased to RMB 4,724 thousand as of June 30, 2023, from RMB 95,440 thousand as of December 31, 2022, reflecting reduced short-term obligations[95] - Long-term payables related to mining rights increased slightly to RMB 669,953 thousand as of June 30, 2023, from RMB 665,196 thousand as of December 31, 2022[96] - The company proposed an interim dividend of 3.0 HK cents per share, totaling approximately RMB 233,169 thousand, a decrease from RMB 432,555 thousand in the same period last year[97] - Capital commitments for mining machinery and property acquisitions decreased to RMB 1,175,567 thousand as of June 30, 2023, from RMB 1,480,506 thousand as of December 31, 2022[98] - Estimated future compensation for land relocation related to mining activities is approximately RMB 21,427 thousand, with negotiations ongoing[99] - Transactions with related parties, including loading services from Xiaojia, amounted to RMB 37,604 thousand for the six months ended June 30, 2023, down from RMB 52,897 thousand in the same period last year[101][102] - Receivables from related parties increased to RMB 2,978,796 thousand as of June 30, 2023, from RMB 2,699,300 thousand as of December 31, 2022, primarily due to loans and prepayments for acquisitions[103] - The company entered into a loan agreement with Guizhou Power for RMB 57,000,000 with a term of two years, and the interest rate was increased to 2.5% above the one-year Loan Market Quotation Rate (LPR) after an extension to December 31, 2023[104] - A loan agreement of RMB 200,000,000 was signed with Guizhou Power on June 28, 2022, with an interest rate of 1.5% above the one-year LPR, and RMB 145,723,000 of the principal was drawn as of June 30, 2023[104] - The company signed a loan agreement with Xingyao for RMB 200,000,000 on November 4, 2022, with an interest rate of 1.5% above the one-year LPR, and RMB 81,167,000 of the principal was drawn as of June 30, 2023[105] - As of June 30, 2023, the company had outstanding loan principal of RMB 283,890,000 and interest receivable of RMB 14,920,000, with interest income of RMB 5,890,000 for the six months ended June 30, 2023[105] - The company's financial guarantees totaled RMB 700,000,000 as of June 30, 2023, with RMB 33,000,000 guaranteed by Mr. Ju Wenzhong[108] - The fair value of trust wealth management investments was RMB 206,195,000 as of June 30, 2023, classified as Level 3 in the fair value hierarchy[110] - The company recognized a gain of RMB 15,296,000 due to changes in the fair value of trust wealth management investments for the six months ended June 30, 2023[111] - The board proposed an interim dividend after the reporting period, with further details disclosed in Note 23[114] - The acquisition of Xingyao was approved by independent shareholders at an extraordinary general meeting on July 28, 2023[114] - The company has fully complied with the Corporate Governance Code as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2023[115] - The company's audit committee, chaired by Ms. Lau Pui Lin, reviewed and supervised the financial reporting process and internal control system, and reviewed the interim results for the six months ended June 30, 2023[116] - As of June 30, 2023, the company and its subsidiaries did not purchase, sell, or redeem any of the company's listed securities[116] - Mr. Zhang Li holds a beneficial interest of 943,314,000 ordinary shares, representing approximately 11.19% of the company's total issued ordinary shares[121] - Ms. Liao Dongfen holds a beneficial interest of 2,800,000 ordinary shares, representing approximately 0.03% of the company's total issued ordinary shares[121] - Mr. Zhang Liang, through King Lok Holdings Limited, holds a beneficial interest of 5,307,450,000 ordinary shares, representing approximately 62.96% of the company's total issued ordinary shares[121] - The company did not enter into any arrangements during the six months ended June 30, 2023, that would allow directors or senior executives to benefit from acquiring shares or debentures of the company or any other corporate body[119] - The total number of shares that may be issued under the 2023 Share Option Scheme, 2023 Share Award Scheme, and other plans of the company shall not exceed 843,000,000 shares, equivalent to 10% of the total issued shares as of the adoption date[124] - The total number of shares that may be issued to service providers under the 2023 Share Option Scheme, 2023 Share Award Scheme, and other plans of the company shall not exceed 84,300,000 shares, equivalent to 1% of the total issued shares as of the adoption date[124] - As of June 30, 2023, the company has not granted any share options or share awards under the 2023 Share Option Scheme and 2023 Share Award Scheme[124] - No directors or their close associates had any interests in businesses competing with the group as of June 30, 2023[125] Market and Economic Conditions - China's GDP in the first half of 2023 reached approximately RMB 59.3 trillion, a year-on-year increase of 5.5%[6] - The total profit of industrial enterprises above designated size in China decreased by 16.8% year-on-year to RMB

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,492.2 million, a decrease of 50.4% compared to RMB 3,010.0 million in the same period of 2022[2]. - Gross profit for the same period was RMB 816.9 million, down 61.0% from RMB 2,095.3 million year-on-year[2]. - The net profit attributable to shareholders was RMB 570.2 million, representing a decline of 58.2% from RMB 1,365.3 million in the previous year[2]. - Basic and diluted earnings per share decreased to RMB 6.76 from RMB 16.20[5]. - The gross profit margin fell to 54.7%, down 14.9 percentage points from 69.6% in the prior year[2]. - Total comprehensive income for the period was RMB 570.8 million, compared to RMB 1,352.8 million in the same period last year[4]. - The group reported a net loss of RMB 15,545,000 for the six months ended June 30, 2023, compared to a net income of RMB 9,212,000 for the same period in 2022[21]. - The group's net profit for the six months ended June 30, 2023, was approximately RMB 569.1 million, a decrease of 58.2% year-on-year, while EBITDA was approximately RMB 728.5 million, down 63.7%[54]. - The total income tax expense for the six months ended June 30, 2023, was RMB 64.286 million, a substantial decrease from RMB 572.724 million for the same period in 2022[61]. Assets and Liabilities - Non-current assets increased to RMB 8,184.7 million as of June 30, 2023, from RMB 7,880.4 million at the end of December 2022[6]. - Current liabilities rose to RMB 2,751.7 million, up from RMB 1,815.4 million at the end of December 2022[6]. - The company reported a net asset value of RMB 6,344.4 million as of June 30, 2023, compared to RMB 6,316.8 million at the end of December 2022[7]. - Total liabilities increased to RMB 3,648,807,000 as of June 30, 2023, from RMB 3,175,851,000 as of December 31, 2022, reflecting a rise of 14.9%[18]. - The group’s total assets reached RMB 9,993,213,000 as of June 30, 2023, compared to RMB 9,492,641,000 as of December 31, 2022, indicating an increase of 5.3%[18]. Business Operations - The company continues to engage in the mining and sale of coal products, with no significant changes in its main business during the period[8]. - The group is actively seeking potential mining project targets and diversifying into new business areas to expand its operations[10]. - The group plans to commence production at its Ningxia coal mines in 2025, which is expected to add an annual capacity of 2.1 million tons of coking coal, enhancing operational diversity[53]. - The group faced challenges in coal production due to geological conditions, but production and sales began to recover to normal levels by May 2023[50]. - The average selling price of the group's 5,000 kcal low-sulfur environmental power coal was approximately RMB 866 per ton, representing a year-on-year decline of about 6.3%[50]. - The sales volume of the group's 5,000 kcal coal decreased by approximately 48.1% compared to the same period last year[50]. Financing and Investments - The group plans to finance acquisitions and capital expenditures through bank loans and other financial institutions, subject to future operating cash flows and market conditions[10]. - Financing costs surged to RMB 37,515,000 for the six months ended June 30, 2023, compared to RMB 10,945,000 in the same period of 2022, marking an increase of 242.5%[23]. - The company has entered into a framework agreement for property acquisition with Hainan Hangxiao, with a total consideration of RMB 1,000,939,000, of which RMB 564,625,000 has been prepaid[32]. - The company has prepaid RMB 1,080.256 million for the acquisition of a 75% stake in Changlin, with conditions that must be met before completion[71]. - The total loans granted to related parties as of June 30, 2023, were RMB 298,810,000, up from RMB 158,408,000 at the end of December 2022, indicating an increase of about 88.5%[34]. Shareholder Information - The board proposed an interim dividend of HKD 0.03 per share, with an estimated total payout of approximately RMB 233,169,000[46]. - The board's proposal for an interim dividend is subject to shareholder approval at a special meeting held on July 28, 2023[47]. - The company proposed an interim dividend of HKD 0.03 per share, with a total expected payout of HKD 252.9 million, down from HKD 505.8 million for the six months ended June 30, 2022[65]. Compliance and Governance - The company has adhered to the corporate governance code as stipulated by the Hong Kong Stock Exchange during the reporting period[79]. - The company's audit committee consists of two independent non-executive directors and one non-executive director, ensuring compliance with financial reporting and internal control standards[82]. - The company has established a new share incentive plan to provide employees with opportunities to acquire equity interests in the company[78].

Financial Performance - For the year ended December 31, 2022, the company's revenue reached approximately RMB 6,155.8 million, representing a year-on-year growth of 10.3%[8] - The net profit attributable to shareholders for the same period was approximately RMB 2,664.5 million, reflecting a year-on-year increase of 7.9%[8] - The gross profit margin for the year was 65.4%, significantly higher than the industry average[8] - The company's EBITDA was approximately RMB 3,820.2 million, an increase of 7.4% year-on-year[33] - The net profit reached approximately RMB 2,656.3 million, reflecting a year-on-year growth of 7.6%[33] - The group recorded a consolidated net profit of RMB 2,656.3 million for the year ended December 31, 2022, compared to RMB 2,467.6 million for the year ended December 31, 2021, with a net profit margin of 43.2%[62] - The company's revenue increased from RMB 5,580.7 million in 2021 to RMB 6,155.8 million in 2022, representing a growth of approximately 10.3%[54] Acquisitions and Expansion - The company successfully acquired 100% equity of Ningxia Power Mining Co., which added an annual production capacity of 2.1 million tons of coking coal[9] - The company completed significant acquisitions in Ningxia, acquiring 49% and 51% stakes in Ningxia Power, becoming the sole developer and operator of two coal mines[35] - The group completed the acquisition of 95% and 5% equity interests in Wuhai Fuliang, respectively, in 2022[84] - The group entered into agreements to acquire 100% equity in Ningxia Power for a total consideration of RMB 1,642,032,000, completed in 2022[85] - The company plans to accelerate strategic acquisitions in 2023 to optimize its product mix and expand diversified subsidiary businesses[50] Market and Pricing - The average selling price of commodity coal increased by approximately 23.3% compared to the previous year[8] - The average selling price of 5,000 kcal low-sulfur environmental protection thermal coal was approximately RMB 1,002.6 per ton, representing a year-on-year increase of about 23.3%[32] - The company aims to maintain a high level of coal prices in 2023, despite a slight expected decline, due to increased demand and supply policies[48] - The company has implemented various measures to mitigate the downward pressure on coal prices, including cost reduction and market expansion strategies[37] Operational Efficiency and Safety - The company has focused on enhancing production efficiency and cost control through automation platform construction[8] - The company has implemented refined management practices to strengthen safety production systems and cost management across all operational stages[8] - The company maintained a strong focus on safety, achieving zero major injuries throughout the year[33] - The company has established a comprehensive safety management system that includes a multi-level health and safety management structure, ensuring effective oversight and execution of safety protocols[125] - The company has not experienced any major safety incidents or work-related fatalities in the past three years, with a total of 57 workdays lost due to injuries in 2022[129] Environmental, Social, and Governance (ESG) - The company emphasized the importance of environmental protection and sustainable development, maintaining its status as a national-level green mine[10] - The company has been publishing its Environmental, Social, and Governance (ESG) report since 2016, with the latest report being the seventh edition[100] - The company established an ESG working group responsible for implementing ESG strategies and reporting progress to the board[101] - The company has identified 18 ESG issues through stakeholder engagement, focusing on areas such as safety production, ecological protection, and sustainable profitability[110] - The company has prioritized energy conservation and resource efficiency as part of its operational strategy, aligning with environmental sustainability goals[111] Employee and Community Engagement - The company has established a performance evaluation system, completing the regularization assessment for 38 management positions, 53 professional technical positions, and 186 worker positions[165] - The company has implemented a comprehensive compensation policy, ensuring that salaries are not lower than local minimum wage requirements and are competitive within the industry[159] - The company donated approximately RMB 64.67 million to support local medical and educational initiatives in 2022[170] - The company has organized various community activities, including donations to support impoverished villagers and cultural events, totaling over RMB 100,000[169] - The company has engaged in community communication and signed contracts to support local economic development, including a RMB 80,000 contract for soil transportation[169] Future Outlook - Looking ahead to 2023, the company anticipates a balanced supply and demand in the coal industry, with potential price adjustments but stable growth for quality coal enterprises[10] - The company plans to leverage its strong profitability and capital advantages to actively expand quality projects while maintaining steady development[10] - The company aims to achieve carbon neutrality by 2030, aligning with global sustainability trends[184]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 6,155.8 million, an increase of 10.3% from RMB 5,580.7 million in 2021[2] - Gross profit for the same period was RMB 4,023.5 million, reflecting an 11.6% increase from RMB 3,604.2 million in the previous year[2] - Net profit attributable to shareholders was RMB 2,664.5 million, up 7.9% from RMB 2,468.6 million in 2021[2] - Basic and diluted earnings per share increased to RMB 31.61 from RMB 29.28, representing an 8.0% growth[2] - The company’s total comprehensive income for the year was RMB 2,643.98 million, compared to RMB 2,476.57 million in 2021[5] - The pre-tax profit for 2022 was RMB 3,634,027,000, compared to RMB 3,422,296,000 in 2021, marking an increase of approximately 6.2%[20] - The company's net profit for 2022 was approximately RMB 2.656 billion, representing a year-on-year growth of 7.6%[43] - The company's gross profit margin stood at approximately 65.4%, maintaining a level above the industry average[43] Dividends - The company proposed a final dividend of HKD 7.0 cents per share, compared to HKD 6.5 cents in the previous year[2] - The proposed final dividend for 2022 is set at HKD 0.07 per share, an increase from HKD 0.065 per share in 2021, totaling RMB 527,119,000[21] Assets and Liabilities - Non-current assets totaled RMB 7,880.4 million, significantly up from RMB 2,823.2 million in 2021[6] - Current liabilities increased to RMB 1,815.4 million from RMB 1,391.3 million in the previous year[6] - Total assets less current liabilities amounted to RMB 7,677.2 million, compared to RMB 4,650.9 million in 2021[6] - The group's total liabilities as of December 31, 2022, were RMB 3,175,851,000, reflecting a stable financial position[14] - The total liabilities as of December 31, 2022, were RMB 518,906,000, an increase from RMB 329,560,000 in 2021, indicating a significant rise in financial obligations[30] Cash Flow and Financing - The net cash used in investing activities for the year ended December 31, 2022, was RMB 4,275.5 million, primarily due to purchases of property, plant, and equipment[57] - The net cash used in financing activities for the year ended December 31, 2022, was RMB 649.9 million, primarily due to a net increase in bank loans of RMB 594.6 million and dividend payments of RMB 899.2 million[58] - The group's bank loans totaled RMB 850,000,000 as of December 31, 2022, with RMB 300,000,000 due within one year[33] - Financing costs rose significantly to RMB 49,893,000 in 2022 from RMB 11,959,000 in 2021, reflecting a substantial increase in interest expenses[18] Acquisitions and Investments - The company made prepayments totaling RMB 1,080,256,000 for the acquisition of Guizhou Power Energy Co., Ltd. and RMB 696,000,000 for the acquisition of Real Estate Group Limited, with total prepayments for related party transactions amounting to RMB 2,540,892,000 in 2022, up from RMB 735,700,000 in 2021[23] - The acquisition of Ningxia Power on June 3, 2022, was completed for a total consideration of RMB 1,642,032,000, resulting in the group holding 100% equity[36] - The acquisition of Wuhai Fulian was completed in 2022 for a total consideration of RMB 185,700,000, with identifiable assets primarily being a property under construction[38] - The company has also agreed to acquire 73% of Xingyao Enterprise Limited for a total consideration of approximately USD 91,413,179 (equivalent to RMB 636,656,000), with completion expected in 2023[25] Operational Highlights - The average selling price of the company's low-sulfur environmental protection thermal coal was approximately RMB 1,002.6 per ton, up 23.3% year-on-year[43] - The average selling price of the company's 5,000 kcal coal products increased by about 23.3% year-on-year for the year ended December 31, 2022[47] - The coal production for the first quarter of 2023 is expected to decline temporarily due to adverse underground mining conditions, but is projected to recover by April 2023[40] - The company successfully expanded its operations in Ningxia by acquiring 49% and 51% stakes in two coal mines, with production expected to commence in the first half of 2025[44] Corporate Governance - The company believes that good corporate governance can create value for shareholders and has adhered to the corporate governance code during the year ended December 31, 2022[75] - The audit committee consists of two independent non-executive directors and one non-executive director, and they reviewed the annual performance and audited financial statements for the year ended December 31, 2022[76] - All directors confirmed compliance with the standards set forth in the company's code of conduct for securities transactions for the year ended December 31, 2022[74] Market Outlook - The global economic growth is projected to slow down from 4.1% in 2022 to 1.7% in 2023, impacting market conditions[45] - The company anticipates a gradual recovery in the Chinese economy in 2023, supported by government strategies to expand domestic demand[45] Compliance and Reporting - The independent auditor's report confirmed that the consolidated financial statements reflect the group's financial position as of December 31, 2022, in accordance with the Hong Kong Financial Reporting Standards[78] - The annual performance announcement and the 2022 annual report will be published on the Stock Exchange and the company's website[81]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 6,155.8 million, an increase of 10.3% from RMB 5,580.7 million in 2021[2] - Gross profit for the same period was RMB 4,023.5 million, reflecting an 11.6% increase from RMB 3,604.2 million in the previous year[2] - The net profit attributable to shareholders was RMB 2,664.5 million, up 7.9% from RMB 2,468.6 million in 2021[2] - Basic and diluted earnings per share increased to RMB 31.61 from RMB 29.28, representing an 8.0% growth[2] - The company’s total comprehensive income for the year was RMB 2,643.98 million, compared to RMB 2,476.57 million in 2021[5] - The group reported a pre-tax profit of RMB 3,634,027,000 for 2022, compared to RMB 3,422,296,000 in 2021, reflecting an increase of approximately 6.2%[20] - The company's net profit for 2022 was approximately RMB 2.656 billion, representing a year-on-year growth of 7.6%[43] - The group's net profit for the year ended December 31, 2022, was RMB 2,656.3 million, with a net profit margin of 43.2%, remaining relatively stable compared to the previous year's net profit of RMB 2,467.6 million[55] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 7.0 cents per share, compared to HKD 6.5 cents in the previous year[2] - The proposed final dividend for 2022 is set at HKD 0.07 per share, up from HKD 0.065 per share in 2021, indicating a growth in shareholder returns[21] Assets and Liabilities - Non-current assets totaled RMB 7,880.4 million, significantly up from RMB 2,823.2 million in 2021[6] - Current liabilities increased to RMB 1,815.4 million from RMB 1,391.3 million in the previous year[6] - Total assets less current liabilities amounted to RMB 7,677.2 million, compared to RMB 4,650.9 million in 2021[6] - The group’s total liabilities as of December 31, 2022, were RMB 3,175,851,000, indicating a stable financial position[14] Cash Flow and Investments - The net cash used in investing activities for the year ended December 31, 2022, was RMB 4,275.5 million, primarily due to purchases of properties, plants, and equipment, as well as cash outflows for acquisitions[57] - The net cash used in financing activities for the year ended December 31, 2022, was RMB 649.9 million, primarily due to a net increase in bank loans of RMB 594.6 million and dividend payments of RMB 899.2 million[58] - As of December 31, 2022, the group's bank cash was RMB 551.9 million, a decrease of RMB 1,831.2 million from RMB 2,387.2 million as of December 31, 2021[59] Acquisitions and Future Plans - The company plans to diversify its existing business by actively seeking potential mining project targets or exploring new business areas outside of mining[9] - The company has made advance payments for acquisitions totaling RMB 2,540,892,000 in 2022, compared to RMB 735,700,000 in 2021, indicating a significant increase in investment activities[23] - The company has entered into a purchase agreement to acquire 75% of a coal mining company for a total consideration of RMB 1,100,000,000, with advance payments of RMB 530,256,000 made in 2022[24] - The company plans to acquire specific properties from related parties for a total consideration of RMB 809,480,000, with advance payments of RMB 670,000,000 made[24] Operational Performance - The company’s coal production has been significantly affected by events mentioned in the notes, leading to a notable decline in operating cash inflows for the first quarter of 2023[9] - The coal production for the first quarter of 2023 is expected to decline temporarily due to adverse underground mining conditions, but is projected to recover to planned levels by April 2023[40] - The average selling price of the company's low-sulfur environmental protection thermal coal was approximately RMB 1,002.6 per ton, up about 23.3% year-on-year[43] Financial Ratios and Margins - The company reported a gross margin of 65.4%, an increase of 0.8 percentage points from 64.6% in the previous year[2] - The company's gross profit margin was approximately 65.4%, maintaining a level above the industry average[43] Corporate Governance and Compliance - The company believes that good corporate governance can create value for shareholders and has adhered to the corporate governance code during the year ended December 31, 2022[75] - The independent auditor's report confirmed that the consolidated financial statements reflect the group's financial position and performance accurately as of December 31, 2022[78] Market Conditions and Economic Outlook - The global economic growth is projected to slow down from 4.1% in 2022 to 1.7% in 2023, impacting market conditions[45] - The company anticipates that the Chinese economy will improve in 2023 due to recovering demand and government policies aimed at stabilizing the macroeconomic environment[45]

Financial Performance - For the first half of 2022, Kinetic Development Group reported revenue of approximately RMB 3,010.0 million, representing a year-on-year increase of 31.7%[14] - The net profit attributable to shareholders for the same period was approximately RMB 1,365.3 million, reflecting a year-on-year growth of 48.0%[14] - The company's EBITDA for the first half of 2022 was approximately RMB 2,008.3 million, reflecting a year-on-year increase of about 48.8%[18] - The company's total revenue for the first half of 2022 was approximately RMB 3,010 million, an increase of 31.7% compared to the same period last year[18] - The company's net profit attributable to shareholders reached approximately RMB 1,365.3 million, representing a year-on-year growth of about 48.0%[18] - Revenue for the six months ended June 30, 2022, was RMB 3,009,958 thousand, representing a 31.6% increase from RMB 2,285,840 thousand in the same period of 2021[55] - Gross profit for the same period was RMB 2,095,335 thousand, up 62.0% from RMB 1,295,232 thousand year-over-year[55] - Operating profit increased to RMB 1,935,420 thousand, a rise of 51.9% compared to RMB 1,273,516 thousand in the previous year[55] - Basic and diluted earnings per share for the period were RMB 16.20, compared to RMB 10.94 in the same period last year[56] Market Conditions - The outlook for the second half of 2022 indicates a continued supply shortage in the coal industry, with coal prices expected to remain high[15] - The domestic coal market is experiencing tight supply and demand, with prices initially surging before stabilizing at high levels[14] - The coal production in China for the first half of 2022 was approximately 2.19 billion tons, with a year-on-year growth of about 11.0%[16] - The total profit of large-scale coal mining and washing enterprises in China increased by about 119.8% year-on-year, reaching approximately RMB 852.82 billion[16] Acquisitions and Investments - Kinetic Development Group's acquisition of 100% equity in Ningxia Sunshine Mining Company is expected to add an annual production capacity of 2.1 million tons of coking coal[15] - The company completed the acquisition of 100% equity in Ningxia Sunshine Mining, enhancing its focus on coking coal business[20] - The company plans to complete the acquisition of Ningxia Sunshine by September 15, 2022, to replicate operational advantages and expand its business footprint[21] - The total consideration for the acquisition of Ningxia Sunshine Mining Co., Ltd. amounted to RMB 1,642,032 thousand, including the repayment of shareholder loans[119] - The identifiable assets acquired from the acquisition included intangible assets valued at RMB 2,700,732 thousand and property, plant, and equipment valued at RMB 203,210 thousand[120] Operational Efficiency and Strategy - Kinetic Development Group is focusing on enhancing operational efficiency through digitalization and equipment upgrades[14] - The company aims to maintain high-quality growth and will actively pursue the acquisition of quality projects to enhance shareholder value[15] - The company is exploring the development of ecological agriculture alongside its core coal business to further improve overall efficiency[15] Financial Position and Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2022, was RMB 1,584.5 million, an increase from RMB 1,357.7 million in the same period of 2021, reflecting a growth of approximately 16.7%[34] - The net cash used in investing activities amounted to RMB (2,498.5) million, compared to RMB (1,459.7) million in the previous year, indicating a significant increase in investment outflows[32] - The company reported a net cash decrease of RMB (947.9) million for the six months ended June 30, 2022, compared to RMB (355.4) million in the same period of 2021, representing a deterioration in cash flow management[33] - As of June 30, 2022, the company's cash and cash equivalents were RMB 1,438.7 million, a decrease from RMB 2,387.2 million at the beginning of the year[33] - The company incurred capital expenditures of approximately RMB 1,124.3 million during the six months ended June 30, 2022, primarily for proposed acquisitions and equipment purchases[38] Expenses and Liabilities - The company's financing costs rose from approximately RMB 3.8 million for the six months ended June 30, 2021, to approximately RMB 10.9 million for the same period in 2022, an increase of 185.8%[27] - The company’s sales expenses increased from approximately RMB 4.5 million to approximately RMB 12.3 million, a rise of 171.3% due to higher sales staff salaries and marketing costs[25] - The company’s administrative expenses increased from approximately RMB 80.1 million to approximately RMB 123.1 million, reflecting a 53.5% increase primarily due to rising wage costs[26] - The total liabilities rose from RMB 329,560,000 to RMB 994,753,000, indicating an increase of about 201.5%[90] Employee and Management - The group employed approximately 1,183 full-time employees in Mainland China and Hong Kong as of June 30, 2022, with total employee costs amounting to RMB 177.6 million for the six months ended June 30, 2022[46] - The group reported a total employee cost of RMB 177,624,000 for the six months ended June 30, 2022, up from RMB 130,609,000 in the previous year, reflecting increased labor expenses[74] - The remuneration for key management personnel increased to RMB 15,277,000 for the six months ended June 30, 2022, compared to RMB 12,868,000 for the same period in 2021, reflecting a growth of approximately 18%[111] Dividends and Shareholder Information - The interim dividend proposed by the board is HKD 0.06 per share, with a total expected payout of approximately HKD 505.8 million[31] - The proposed interim dividend is HKD 0.06 per share, with an estimated total payout of approximately RMB 432,555,000[98] - As of June 30, 2022, the total number of ordinary shares issued was 8,430,000,000[127] - The beneficial ownership of directors included Mr. Gu Wen Zhong with 3,241,659 shares (0.04%) and Ms. Xue Hui with 3,860,055 shares (0.05%)[127] Governance and Compliance - The company adhered to the corporate governance code as stipulated by the Hong Kong Stock Exchange during the reporting period[123] - No other directors or their close associates have any interests in businesses that compete directly or indirectly with the group as of June 30, 2022[132]

Financial Performance - For the year ended December 31, 2021, the company's revenue reached approximately RMB 5,580.7 million, representing an 88.4% year-on-year increase[11]. - The profit attributable to shareholders was approximately RMB 2,468.6 million, reflecting a 203% year-on-year growth[11]. - The gross profit margin for the reporting period was 64.6%, significantly higher than the industry average[11]. - The company achieved a 15.8% increase in coal sales volume compared to the same period last year[12]. - The company's EBITDA reached approximately RMB 3,557.3 million, reflecting a year-on-year increase of 162.1%[40]. - The company's net profit attributable to shareholders was approximately RMB 2,468.6 million, a year-on-year growth of 203.0%[40]. - The gross profit for 2021 was RMB 3,604,158 thousand, compared to RMB 1,282,217 thousand in 2020, indicating a substantial improvement in profitability[53]. - The company's net profit attributable to shareholders for the year ended December 31, 2021, was approximately RMB 2,468.6 million, significantly up from approximately RMB 814.8 million for the previous year, resulting in a net profit margin increase from 27.5% to 44.2%[64]. - The company's total sales costs for 2021 were RMB 1,976,544 thousand, with transportation costs being the largest component at RMB 1,223,587 thousand[51]. Capital Expenditures and Investments - Capital expenditures for the year amounted to RMB 1,022.9 million[22]. - The total capital expenditure for the year was approximately RMB 1,022.9 million, primarily related to acquisitions and equipment purchases[48]. - The company entered into an agreement to acquire 100% equity of Wuhai Fuliang Real Estate Development Co., Ltd. for a total consideration of RMB 185.7 million[85]. - An agreement was signed to acquire 75% equity of Changlin Real Estate Development Co., Ltd. for a total consideration of RMB 1,100.0 million, expected to enhance mining rights in Guizhou[85]. Operational Efficiency and Safety - The company has implemented an automated platform in coal production, enhancing production efficiency and cost control[12]. - The company reported zero fatalities or serious injuries at the Dafenpu coal mine in 2021, reflecting its commitment to safety management[46]. - The group conducted 97 internal inspections and identified 1,292 safety hazards, achieving a 100% rectification rate for identified issues[126]. - The group has not experienced any work-related fatalities or major safety incidents in the past three years, with a total of 56 workdays lost due to injuries in 2021[126]. - The group enhanced its safety management level through a month-long safety production campaign, which included various safety awareness activities[131]. Environmental and Social Responsibility - The company is focusing on the development of green mining and ecological agriculture, with successful certifications for its mining operations[14]. - The company has been recognized as a national-level green mine and has developed an ecological industrial chain in reclaimed mining areas[42]. - The company has established an ESG working group to manage and report on environmental, social, and governance matters[95]. - The company has integrated ESG-related risks into its risk management and internal control systems[95]. - The company has achieved zero wastewater discharge by reusing all treated domestic wastewater in production processes[113]. - The company planted over 70,533 trees and 153,000 shrubs, achieving a greening rate of 98% in the mining area, contributing to ecological restoration efforts[150]. Employee Development and Welfare - The employee turnover rate for full-time staff in 2021 was 15.01%, totaling 145 individuals, with the majority of turnover occurring among employees in mainland China[156]. - The company maintained a 100% labor contract signing rate for its 1,168 employees as of December 31, 2021[156]. - The company organized 43 training sessions for professional and managerial staff and 457 training sessions for coal miners, achieving a 100% training coverage rate[162]. - The company provided free meals to underground employees and ensured they received hot meals during shifts in 2021[167]. - The company constructed a staff residence with an area of over 7,000 square meters, including a sports hall and 81 dormitories, enhancing living conditions for employees[168]. Community Engagement and Economic Contribution - The company donated a total of RMB 10 million to the "Zhuang Miao Plan" and "Star Plan" projects in Guizhou Province to support rural education initiatives[169]. - The company supported local economic development by employing 198 local residents, accounting for 26% of its total workforce[171]. - The company signed a garbage collection contract with the Sanbao Yaozi Village Committee, contributing approximately RMB 280,000 to the village's collective economy[170]. - The company actively engaged in community development and communication to minimize potential negative impacts on local communities[170]. Governance and Compliance - The company emphasizes compliance with laws such as the Anti-Money Laundering Law and the Anti-Unfair Competition Law, reinforcing its commitment to integrity[107]. - The establishment of a dedicated complaint and reporting system enhances transparency and accountability within the organization[109]. - The company has established anti-corruption policies and training programs for employees, ensuring compliance with relevant laws[177]. - The company has not identified any instances of child or forced labor in its operations, demonstrating compliance with labor standards[176].

[Company Information](index=2&type=section&id=Company%20Information) This report provides fundamental company details for Power Mining Energy Co., Ltd. (Stock Code: 1277), including board members, principal place of business, auditor, and main banking relationship - This report provides basic company information for Power Mining Energy Co., Ltd. (Stock Code: 1277), including details on board members, principal place of business, registered office, auditor (**KPMG**), and main banking relationship (**Ping An Bank**) [6](index=6&type=chunk) [Chairman's Report](index=5&type=section&id=Chairman's%20Report) Despite the complex environment of COVID-19 in 2020, the company achieved robust development with increased revenue but a slight decrease in profit attributable to shareholders [Chairman's Report](index=5&type=section&id=Chairman's%20Report) Despite the complex environment of COVID-19 in 2020, the company achieved robust development with increased revenue but a slight decrease in profit attributable to shareholders, while maintaining a significantly higher gross profit margin than the industry average 2020 Annual Key Financial Performance | Indicator | 2020 | Year-on-year Change | | :--- | :--- | :--- | | Revenue | RMB 2,961.4 million | ▲ 8.2% | | Profit attributable to shareholders | RMB 814.8 million | ▼ 2.2% | | Gross profit margin | 43.3% | - | | Commercial coal sales volume | - | ▲ 7.4% | - In 2020, the company implemented multiple operational strategies to enhance efficiency, including: **production automation**, **refined management** across procurement, production, and inventory, and **flexible sales strategies** to consolidate and expand market presence [8](index=8&type=chunk) - For 2021, the company anticipates a tight supply-demand balance in the domestic coal market with a slight increase in average coal prices, planning to expand capacity through quality projects and strategic M&A [9](index=9&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational and financial performance, market conditions, and risk management strategies in 2020 [Market Review](index=11&type=section&id=Market%20Review) In 2020, China's economy recovered, but the coal market experienced supply-demand imbalances and a decline in overall industry profitability - China's GDP in 2020 was approximately **RMB 101.6 trillion**, growing by **2.3% year-on-year** [21](index=21&type=chunk) - The average transaction price for 5,000 kcal coal at Qinhuangdao was **RMB 503 per ton**, a **1.2% year-on-year decrease** [21](index=21&type=chunk) - The coal mining and washing industry's total profit was approximately **RMB 222.7 billion**, a **21.1% year-on-year decrease** [21](index=21&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) The Group achieved high-quality development in 2020 through flexible sales strategies and refined cost control, despite market volatility 2020 Annual Business Review Key Indicators | Indicator | 2020 | Year-on-year Change | | :--- | :--- | :--- | | Total Revenue | Approx. RMB 2,961.4 million | ▲ 8.2% | | Gross Profit Margin | Approx. 43.3% | ▲ 4.3 percentage points | | Comprehensive Net Profit | Approx. RMB 814.8 million | ▼ 2.2% | | EBITDA | Approx. RMB 1,357.0 million | ▲ 16.3% | - The company's Dafenpu Coal Mine was among the first to resume operations in Inner Mongolia and has consistently received national safety and green mine recognitions [23](index=23&type=chunk) [Major Risks and Uncertainties](index=13&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E9%9D%A2%E8%87%A8%E7%9A%84%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E6%98%8E%E6%9C%97%E5%9B%A0%E7%B4%A0%E3%80%81%E5%BD%B1%E9%9F%BF%E5%8F%8A%E6%87%89%E5%B0%8D%E6%8E%AA%E6%96%BD) The company addresses operational concentration, coal price volatility, and production safety risks through stable operations, flexible market strategies, and robust safety management - Major risks include **single mine concentration risk** (Dafenpu Coal Mine), **coal price volatility**, and **production safety risks** inherent in the high-risk coal mining industry [25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Mitigation measures involve ensuring **stable operations**, implementing **flexible marketing strategies** and leveraging the "Power 2" brand, and maintaining a **zero serious injury or fatality rate** in 2020 through strengthened safety management [25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Exploration, Development and Mining Activities](index=13&type=section&id=%E5%8B%98%E6%8E%A2%E3%80%81%E9%96%8B%E7%99%BC%E5%8F%8A%E9%96%8B%E9%87%87%E6%B4%BB%E5%8B%95) As of end-2020, Dafenpu Coal Mine held estimated coal resources of 389.77 million tons and total coal reserves of 183.72 million tons, with capital expenditure primarily on equipment and mine construction Coal Resources as of December 31, 2020 (Million Tons) | Coal Seam | Proved | Indicated | Inferred | Total | | :--- | :--- | :--- | :--- | :--- | | 5 | 9.73 | 14.62 | 0.56 | 24.91 | | 6U | 9.64 | 20.45 | 0.47 | 30.56 | | 6 | 135.42 | 176.14 | 0.65 | 312.21 | | 8 | — | — | 4.05 | 4.05 | | 9 | — | 5.13 | 12.91 | 18.04 | | **Total** | **154.79** | **216.34** | **18.64** | **389.77** | Coal Reserves as of December 31, 2020 (Million Tons) | Coal Seam | Proved Coal Reserves | Probable Coal Reserves | Total Coal Reserves | | :--- | :--- | :--- | :--- | | 6U +6 | 83.13 | 100.59 | 183.72 | | **Total** | **83.13** | **100.59** | **183.72** | - Capital expenditure for the year ended December 31, 2020, was approximately **RMB 40.6 million**, primarily for development and mining activities at Dafenpu Coal Mine [30](index=30&type=chunk) [Future Outlook](index=15&type=section&id=Future%20Outlook) The company anticipates a strong recovery in China's economy and a tight supply-demand balance in the coal market in 2021, planning to pursue refined operations and strategic M&A for capacity expansion - The coal market is expected to maintain a **tight supply-demand balance** in 2021, with a slight increase in the **average coal price** [33](index=33&type=chunk) - The company will continue to implement **refined operational strategies** focusing on safety, efficiency, environmental protection, and technological innovation [33](index=33&type=chunk) - The company plans to seize new market opportunities and pursue **strategic mergers and acquisitions** to expand production capacity [33](index=33&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) This section details the company's 2020 financial performance, including increased revenue and gross profit margin, a slight net profit decrease due to higher income tax, and improved liquidity [Operating Results](index=16&type=section&id=Operating%20Results) In 2020, revenue increased by 8.2% to RMB 2.96 billion due to higher sales volume, but net profit attributable to shareholders slightly decreased by 2.2% to RMB 815 million due to a significant rise in income tax expense 2020 Annual Consolidated Statement of Profit or Loss Summary (RMB Thousand) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 2,961,404 | 2,736,109 | | Gross Profit | 1,282,217 | 1,067,828 | | Operating Profit | 1,218,091 | 1,022,510 | | Profit before tax | 1,228,156 | 1,019,795 | | **Profit for the year attributable to shareholders** | **814,796** | **833,303** | - Revenue growth was primarily driven by a **7.4% year-on-year increase in sales volume**, while the average selling price per ton of 5,000 kcal coal products remained stable [36](index=36&type=chunk) - Income tax expense significantly increased, with the **effective tax rate rising from 18.3% in 2019 to 33.7% in 2020**, due to changes in subsidiary tax preferential policies and provisions for withholding tax for prior years [42](index=42&type=chunk)[43](index=43&type=chunk) - The Board recommended a **final dividend of HKD 0.04 per share** [43](index=43&type=chunk) [Cash Flow](index=19&type=section&id=Consolidated%20Cash%20Flow) In 2020, net cash from operating activities significantly increased to RMB 1.20 billion, while net cash used in investing activities rose, leading to a higher year-end cash balance 2020 Annual Consolidated Cash Flow Summary (RMB Thousand) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,195,970 | 862,316 | | Net cash used in investing activities | (540,805) | (147,376) | | Net cash used in financing activities | (275,197) | (490,743) | | **Cash and cash equivalents at end of year** | **877,745** | **497,192** | [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) The company maintains a healthy financial position, with its net debt ratio significantly improving from -6.6% to -31.9% and reduced bank loans - The Group's **net debt ratio improved from -6.6% at December 31, 2019, to -31.9% at December 31, 2020** [49](index=49&type=chunk) - Bank loans decreased to **RMB 210.4 million** at December 31, 2020, from RMB 357.7 million in 2019 [50](index=50&type=chunk) [Financial Risk Management](index=21&type=section&id=Financial%20Risk%20Management) The company manages interest rate, foreign currency, and liquidity risks through monitoring and forecasting, with capital expenditures and commitments detailed - The Group's **interest rate risk primarily arises from floating-rate bank loans** [52](index=52&type=chunk) - Capital expenditure for the year ended December 31, 2020, was approximately **RMB 40.6 million**, with capital commitments of approximately **RMB 6.1 million** [53](index=53&type=chunk) [Human Resources and Remuneration Policies](index=22&type=section&id=Human%20Resources%20and%20Remuneration%20Policies) As of end-2020, the Group employed 756 full-time staff with total annual employee costs of RMB 180.5 million, and remuneration policies are performance-based - As of December 31, 2020, the Group employed approximately **756 full-time employees** in mainland China and Hong Kong [55](index=55&type=chunk) - Total employee costs (including directors' emoluments) for the year ended December 31, 2020, amounted to **RMB 180.5 million** [55](index=55&type=chunk) [Environmental, Social and Governance Report](index=23&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the company's commitment and practices in environmental protection, social responsibility, and corporate governance [1. Responsible Governance](index=26&type=section&id=1.%20Responsible%20Governance) The Group has established a board-led ESG management structure, engaging stakeholders and prioritizing key issues like safety, ecological protection, and compliance - The Board assumes full responsibility for the Group's ESG strategy and reporting, supported by an established ESG working group [59](index=59&type=chunk) - Through materiality assessment, **seven issues** including "production safety," "ecological protection," and "compliant and legal operations" were identified as highly material [65](index=65&type=chunk) [2. Compliant Operations](index=29&type=section&id=2.%20Compliant%20Operations) The company upholds integrity and compliance, with no corruption lawsuits in 2020, and focuses on technological innovation, product quality, and responsible supply chain management - In 2020, the Group had **no lawsuits related to corruption** [68](index=68&type=chunk) - The company's "Power 2" clean coal product has a **sulfur content below 0.6%**, with **zero product quality complaints or recalls** in the year [70](index=70&type=chunk) - A supplier management system is in place, incorporating health, safety, environmental, and social responsibility performance into assessment criteria, with **222 trading suppliers in 2020** [72](index=72&type=chunk) [3. Safety Production](index=33&type=section&id=3.%20Safety%20Production) Safety is paramount, with RMB 22.07 million invested in safety and occupational health in 2020, achieving zero major accidents and 100% hazard rectification - In 2020, the Group invested **RMB 22.07 million** in production safety and occupational health [73](index=73&type=chunk) - A total of **141 safety inspections** were conducted, identifying **1,457 hazards with a 100% rectification rate** [76](index=76&type=chunk) - In 2020, the Group experienced **no major safety accidents or work-related fatalities** [76](index=76&type=chunk) - Employee occupational health examination rate reached **100%** [79](index=79&type=chunk) [4. Green and Environmental Protection](index=36&type=section&id=4.%20Green%20and%20Environmental%20Protection) The company adheres to green mining principles, achieving significant energy savings, 100% wastewater recycling, proper solid waste disposal, and extensive ecological restoration - The Dafenpu Coal Mine was among the **first coal mines included in the 2019 National Green Mine selection list** [79](index=79&type=chunk) - In 2020, **6,330,228 kWh of electricity was saved** through various energy-saving initiatives [80](index=80&type=chunk) - In 2020, both production and domestic wastewater recycling rates reached **100%**, achieving **zero wastewater discharge** [84](index=84&type=chunk) - Approximately **114 mu of gangue dump was reclaimed and greened**, with **16,500 trees planted** in 2020 [90](index=90&type=chunk) [5. Harmonious Development](index=40&type=section&id=5.%20Harmonious%20Development) The company prioritizes employee welfare, ensuring 100% labor contract signing and training coverage, while actively contributing to community development and local employment - As of December 31, 2020, the company and coal mine employed **756 staff**, with a **100% labor contract signing rate** [95](index=95&type=chunk) - In 2020, **34 training sessions** were organized, achieving **100% training coverage** and over **97% overall employee satisfaction** [105](index=105&type=chunk) - In 2020, the company donated **RMB 10,000 to the Jungar Banner Red Cross Society** and **RMB 300,000 to the Inner Mongolia Ordos Poverty Alleviation Foundation** for environmental remediation [108](index=108&type=chunk) [Directors and Senior Management](index=49&type=section&id=Directors%20and%20Senior%20Management) This section provides biographical details of the company's board members and senior management, highlighting their extensive experience in the industry [Biographies of Directors and Senior Management](index=49&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) This section details the backgrounds and professional experiences of the company's board members and senior management, including key executive appointments - Mr. Zhang Li, 68, is the Group's founder, Chairman, and Executive Director, also co-founder and co-chairman of Guangzhou R&F Properties Co., Ltd [116](index=116&type=chunk) - Mr. Zhang Liang, 39, is an Executive Director and Mr. Zhang Li's son; his wholly-owned King Lok Holdings Limited holds approximately **62.96% of the company's issued share capital** [116](index=116&type=chunk)[140](index=140&type=chunk) - Mr. Ju Wenzhong, 52, appointed Executive Director and CEO on May 28, 2020, is fully responsible for the Group's production and sales leadership [116](index=116&type=chunk) [Directors' Report](index=55&type=section&id=Directors'%20Report) This report outlines the company's principal activities, performance, and dividend distribution for 2020, along with details on major customers, suppliers, directors' interests, and corporate governance [Directors' Report](index=55&type=section&id=Directors'%20Report) This report summarizes the company's 2020 business, performance, and dividend distribution, including key customer/supplier concentrations, directors' interests, related party transactions, and governance practices - The Board recommended a **final dividend of HKD 0.04 per share**, totaling approximately **HKD 337.2 million** [128](index=128&type=chunk) 2020 Annual Major Customer and Supplier Concentration | Category | Percentage | | :--- | :--- | | Largest customer | 13.2% | | Top five customers combined | 41.0% | | Largest supplier | 7.1% | | Top five suppliers combined | 23.2% | - On June 22, 2020, the company provided a **RMB 57.0 million loan** to Guizhou Power Energy Co., Ltd., indirectly held by Chairman Mr. Zhang Li, constituting a connected transaction [137](index=137&type=chunk) - No share options were granted under the company's share option scheme for the year ended December 31, 2020 [145](index=145&type=chunk)[152](index=152&type=chunk) [Corporate Governance Report](index=67&type=section&id=Corporate%20Governance%20Report) This report details the company's adherence to corporate governance standards, board structure, committee functions, risk management, and shareholder communication [Corporate Governance Report](index=67&type=section&id=Corporate%20Governance%20Report) The company maintained high corporate governance standards in 2020, complying with listing rules, with a clear board structure, distinct roles for Chairman and CEO, and effective internal controls - The Board believes the company complied with the Corporate Governance Code for the year ended December 31, 2020 [170](index=170&type=chunk) - The Board comprises **seven members**, including **three independent non-executive directors**, meeting the listing rule requirement of at least one-third independent non-executive directors [173](index=173&type=chunk) - The roles of the Chairman (Mr. Zhang Li) and Chief Executive Officer (Mr. Ju Wenzhong) are held by **separate individuals** with clear responsibilities [182](index=182&type=chunk) - The Board, through its internal audit department, reviewed the Group's risk management and internal control systems, deeming them **effective and adequately resourced** for accounting, internal audit, and financial reporting functions [202](index=202&type=chunk)[206](index=206&type=chunk) [Independent Auditor's Report](index=80&type=section&id=Independent%20Auditor's%20Report) This report presents KPMG's unqualified opinion on the company's 2020 consolidated financial statements, highlighting revenue recognition as a key audit matter [Independent Auditor's Report](index=80&type=section&id=Independent%20Auditor's%20Report) KPMG issued an unqualified audit opinion on Power Mining Energy Co., Ltd.'s consolidated financial statements for the year ended December 31, 2020, identifying revenue recognition as a key audit matter - The auditor, KPMG, issued an **unqualified audit opinion** on the consolidated financial statements [211](index=211&type=chunk) - **Revenue recognition** was identified as a key audit matter due to its significance as a key performance indicator and the inherent risk of management manipulating the timing of revenue recognition [212](index=212&type=chunk) [Consolidated Financial Statements](index=85&type=section&id=Consolidated%20Financial%20Statements) This section presents the full set of consolidated financial statements for 2020, including the income statement, balance sheet, statement of changes in equity, and cash flow statement [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=85&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2020, the company reported RMB 2.96 billion in revenue and RMB 815 million in profit attributable to shareholders, a slight decrease due to higher income tax Consolidated Statement of Profit or Loss Summary (For the year ended December 31) | Indicator (RMB Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 2,961,404 | 2,736,109 | | Gross Profit | 1,282,217 | 1,067,828 | | Operating Profit | 1,218,091 | 1,022,510 | | Profit before tax | 1,228,156 | 1,019,795 | | **Profit for the year attributable to shareholders** | **814,796** | **833,303** | | Basic earnings per share (RMB cents) | 9.67 | 9.88 | [Consolidated Statement of Financial Position](index=86&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, total assets were RMB 3.67 billion, with total equity increasing to RMB 2.76 billion and a significant improvement in net current assets Consolidated Statement of Financial Position Summary (As of December 31) | Indicator (RMB Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Total non-current assets | 1,964,612 | 2,125,816 | | Total current assets | 1,708,038 | 979,954 | | **Total assets** | **3,672,650** | **3,105,770** | | Total current liabilities | 854,650 | 796,047 | | Total non-current liabilities | 58,280 | 50,860 | | **Total liabilities** | **912,930** | **846,907** | | **Total equity** | **2,759,720** | **2,258,863** | [Consolidated Statement of Changes in Equity](index=88&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity increased from RMB 2.26 billion to RMB 2.76 billion in 2020, driven by profit for the year and exchange differences, partially offset by dividends paid - Total equity increased from **RMB 2,258,863 thousand at end-2019 to RMB 2,759,720 thousand at end-2020** [225](index=225&type=chunk) - Equity changes were primarily influenced by **profit for the year (+RMB 814,796 thousand)**, **other comprehensive income from exchange differences (+RMB 25,457 thousand)**, and **dividends paid (-RMB 339,396 thousand)** [225](index=225&type=chunk) [Consolidated Statement of Cash Flows](index=89&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2020, the Group generated strong net cash from operating activities of RMB 1.20 billion, leading to a significant increase in year-end cash and cash equivalents Consolidated Statement of Cash Flows Summary (For the year ended December 31) | Indicator (RMB Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,195,970 | 862,316 | | Net cash used in investing activities | (540,805) | (147,376) | | Net cash used in financing activities | (275,197) | (490,743) | | Net increase in cash and cash equivalents | 379,968 | 224,197 | | **Cash and cash equivalents at end of year** | **877,745** | **497,192** | [Notes to the Consolidated Financial Statements](index=91&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, key judgments, and supplementary disclosures for financial statement items, including segment information, customer concentration, tax changes, and related party transactions - The Group operates in **one single operating segment**: the mining and sale of coal products in China [283](index=283&type=chunk) - Revenue from the **single largest customer (Customer A) was RMB 390,433 thousand**, accounting for **13.2% of total revenue** [285](index=285&type=chunk) - The significant increase in income tax expense was mainly due to **changes in preferential tax policies for Chinese subsidiaries** and a **10% withholding tax provision for dividend distribution** (RMB 79,080 thousand for current year, RMB 21,000 thousand for prior years) [302](index=302&type=chunk)[303](index=303&type=chunk) - In 2020, the Group provided a **loan of RMB 57,000 thousand** to Guizhou Power Energy Co., Ltd., controlled by Chairman Mr. Zhang Li [355](index=355&type=chunk) [Financial Summary](index=142&type=section&id=Financial%20Summary) This section presents a five-year summary of key financial data from 2016 to 2020, illustrating the Group's consistent growth in revenue and net assets [Five-Year Financial Summary](index=142&type=section&id=Five-Year%20Financial%20Summary) This section provides a five-year overview of the Group's key financial performance and position from 2016 to 2020, demonstrating sustained growth Five-Year Performance Summary (RMB Thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,961,404 | 2,736,109 | 2,443,435 | 1,749,538 | 1,051,457 | | Profit before tax | 1,228,156 | 1,019,795 | 1,051,044 | 707,480 | 193,088 | | Profit for the year | 814,796 | 833,303 | 806,971 | 540,048 | 138,106 | Five-Year Assets and Liabilities Summary (RMB Thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 1,964,612 | 2,125,816 | 2,037,392 | 1,995,535 | 2,008,542 | | Total current assets | 1,708,038 | 979,954 | 717,610 | 676,356 | 211,894 | | Total current liabilities | 854,650 | 796,047 | 831,991 | 1,235,117 | 804,405 | | Net assets | 2,759,720 | 2,258,863 | 1,776,000 | 1,308,421 | 983,791 |