Report Summary 1. Investment Rating The document does not mention the investment rating of the industry. 2. Core Views - **LPG**: In the short term, geopolitical disturbances are strong, and the fundamental driving force is downward. In the short term, the market focuses on the geopolitical situation in Iran, with strong emotional support. In the medium to long term, as the supply reduction gradually returns and the demand - side PDH is in deep loss, the driving force is downward [3][4]. - **Propylene**: The upward driving force has weakened, and attention should be paid to cost - side disturbances. Next week, with the expected return of fluctuating PDH devices, the tight - balance pattern of propylene may improve, and its trend is more driven by the cost and supply sides [7][8]. 3. Summary by Directory LPG Part - **Price & Spread** - The US dollar cost of LPG maintains a strong and volatile trend, and domestic civil prices rise steadily. The freight rate has increased, the spot premium has declined, and the US Gulf - Far East arbitrage window remains open [12]. - The lowest deliverable product is East China civil LPG [15]. - **Supply** - The total domestic LPG commodity volume is 543,000 tons (+1.9%), including 232,000 tons of civil gas (+1.6%) and 169,000 tons of ether - after carbon four (+2.9%). The propane import volume has decreased by 43,000 tons compared with the previous period [63][74]. - The total US LPG shipment volume is stable month - on - month, the Canadian shipment volume is stable, and the Middle East LPG shipment volume has increased month - on - month [42][45]. - **Demand & Inventory** - The PDH operating rate has further declined slightly, and the MTBE operating rate is flat month - on - month. The LPG refinery inventory is at a neutral level compared with the same period in 2025, and there is regional differentiation in the civil gas refinery inventory. The LPG terminal imported cargo inventory continues to decrease [81][83][93][107]. - **Balance Sheet** - In the first quarter, propane is expected to remain seasonally strong. In the second quarter, the supply will return to normal, and the tight supply - demand pattern is expected to ease [119]. Propylene Part - **Price & Spread** - Geopolitical risks have intensified, costs have increased, and propylene's own supply - demand is in a tight - balance state, rising and then stabilizing. The PDH profit has weakened after a brief recovery [122]. - International/US - dollar prices have increased month - on - month, and the import window remains closed. Domestic prices were strong at the beginning of the week and gradually stabilized in the middle of the week [126][132]. - **Balance Sheet** - The overall operating rate of propylene upstream is 70.5% (-0.9%). The oil - based operating rate has increased, while the PDH and MTO operating rates have declined. Downstream varieties have more load - reduction than load - increase [142]. - The supply and demand of propylene in the national and Shandong regions are analyzed in detail, including the production, import, export, and consumption of each month from 2025 to 2026 [146][163][166]. - **Supply** - The overall operating rate of propylene upstream is 70.5% (-0.9%). The refinery/main - operating rate has further increased to 80%, the ethylene cracking operating rate is 85.1% (+3.0%), the PDH capacity utilization rate is 60.7% (-1.5%), and the MTO capacity utilization rate is 80.9% (-3.4%) [173][184][194][199]. - Some PDH and MTO devices have undergone maintenance and restart operations [198][203]. - **Demand** - The PP capacity utilization rate is 74.8% (-1.3%), the PP powder capacity utilization rate is 32.1% (+1.3%), the PO capacity utilization rate is 73.3% (+0.3%), the acrylonitrile capacity utilization rate is 69.0% (-6.2%), the acrylic acid capacity utilization rate is 84.2% (+2.6%), the n - butanol capacity utilization rate is 86.1% (-1.4%), the octanol capacity utilization rate is 91.0% (-5.0%), the phenol - acetone capacity utilization rate is 88.0% (-0.5%), and the ECH capacity utilization rate is 54.3% (-3.7%) [215][234][246][259][264][277][282][287][297]. - Some devices in each downstream industry have undergone start - stop and load - adjustment operations [219][238][250][263][276][281][286][292]. - **Downstream Inventory** - PP production enterprise inventory, PP powder inventory, and other downstream inventories have changed to varying degrees [301][303][304].

Core Viewpoint - HuaiBei Mining reported a significant decline in both revenue and net profit for the first half of 2025, indicating challenges in the coal and chemical industries [1][2]. Revenue and Profit Summary - For H1 2025, the company achieved a revenue of 20.612 billion yuan, a year-on-year decrease of 45% [1]. - The net profit attributable to shareholders was 1.032 billion yuan, down 65% year-on-year [1]. - The weighted average return on equity was 2.4%, a decrease of 4.9 percentage points year-on-year [1]. Quarterly Performance - In Q2 2025, the company reported a revenue of 10.05 billion yuan, a quarter-on-quarter decline of 5% [2]. - The net profit for Q2 was 340 million yuan, down 51% quarter-on-quarter [2]. Coal Business Analysis - In H1 2025, both production and sales of coal decreased year-on-year, with production at 8.91 million tons (down 14%) and sales at 6.48 million tons (down 19%) [3]. - The unit price of coal was 835 yuan/ton, a decrease of 25% year-on-year [3]. - The cost per ton of coal was 469 yuan, down 13% year-on-year, resulting in a gross profit of 366 yuan per ton, a decline of 36% year-on-year [3]. - In Q2 2025, coal production was 4.6 million tons (up 7% quarter-on-quarter), and sales were 3.5 million tons (up 18% quarter-on-quarter) [3]. - The unit price of coal in Q2 was 748 yuan/ton, down 20% quarter-on-quarter, with a cost of 426 yuan/ton (down 18% quarter-on-quarter) and a gross profit of 322 yuan/ton (down 23% quarter-on-quarter) [3]. Coal Chemical Business Overview - In H1 2025, the coal chemical segment saw declines in sales and prices for coke and methanol, while ethanol production increased significantly [4]. - Coke production was 1.71 million tons (up 1% year-on-year), with sales at 1.68 million tons (down 1%) and a unit price of 1418 yuan/ton (down 33% year-on-year) [4]. - Methanol production was 310,000 tons (up 91%), with sales at 120,000 tons (down 2%) and a unit price of 2133 yuan/ton (down 2%) [4]. - Ethanol production reached 230,000 tons (up 203%), with sales at 220,000 tons (up 246%) and a unit price of 4896 yuan/ton (down 9% year-on-year) [4]. - In Q2 2025, coke production was 970,000 tons (up 30%), with sales at 980,000 tons (up 40%) and a unit price of 1361 yuan/ton (down 9% quarter-on-quarter) [4]. - Methanol production was 190,000 tons (up 58%), with sales at 70,000 tons (up 68%) and a unit price of 2070 yuan/ton (down 7% quarter-on-quarter) [4]. - Ethanol production was 130,000 tons (up 39%), with sales at 130,000 tons (up 41%) and a unit price of 4979 yuan/ton (up 4% quarter-on-quarter) [4]. Profit Forecast and Valuation - The company is projected to achieve revenues of 62.7 billion yuan, 67.2 billion yuan, and 70 billion yuan for 2025-2027, with year-on-year changes of -5%, +7%, and +4% respectively [5]. - The net profit attributable to shareholders is expected to be 3 billion yuan, 3.7 billion yuan, and 4.1 billion yuan for the same period, with year-on-year changes of -39%, +23%, and +11% respectively [5]. - Earnings per share (EPS) are forecasted to be 1.10 yuan, 1.36 yuan, and 1.51 yuan, corresponding to price-to-earnings (PE) ratios of 11, 9, and 8 times [5]. - The company anticipates stable operations in coal business due to long-term pricing agreements, with growth potential in coal, chemical, and power generation sectors [5].

Core Viewpoint - The company's performance has declined due to falling self-produced coal prices, but it shows potential for high dividends and growth, maintaining a "buy" rating [1] Group 1: Financial Performance - In Q1 2025, the company achieved operating revenue of 38.39 billion yuan, a year-on-year decrease of 15.4% and a quarter-on-quarter decrease of 21.6% [1] - The net profit attributable to shareholders was 3.98 billion yuan, down 20% year-on-year and 15.5% quarter-on-quarter [1] - The non-recurring net profit attributable to shareholders was 3.94 billion yuan, a year-on-year decrease of 19.4% and a quarter-on-quarter decrease of 15.7% [1] - The company maintains profit forecasts for 2025-2027, expecting net profits of 17.05 billion, 18.47 billion, and 19.07 billion yuan, with year-on-year changes of -11.8%, +8.3%, and +3.3% respectively [1] Group 2: Coal Business Performance - In Q1 2025, the company produced and sold 33.35 million and 64.14 million tons of commodity coal, representing year-on-year increases of 1.9% and 0.4%, but quarter-on-quarter decreases of 5.4% and 19.1% [2] - The average selling price of coal in Q1 2025 was 487.2 yuan per ton, down 17% year-on-year and 9.8% quarter-on-quarter [2] - The comprehensive cost of coal was 371 yuan per ton, a year-on-year decrease of 13.4% and a quarter-on-quarter decrease of 9.4% [2] - The gross profit per ton of coal was 116.2 yuan, down 26.7% year-on-year and 11.2% quarter-on-quarter [2] Group 3: Coal Chemical Business Performance - In Q1 2025, the production of polyolefins, urea, methanol, and ammonium nitrate was 37.8, 52.8, 51.4, and 13.9 million tons, with year-on-year changes of -3.6%, +11.2%, +24.8%, and +6.9% respectively [2] - The selling prices for polyolefins, urea, methanol, and ammonium nitrate were 6,876, 1,702, 1,794, and 1,861 yuan per ton, with year-on-year changes of +0.4%, -23.9%, +7.1%, and -17.3% respectively [2] - The gross profit per ton for polyolefins, urea, methanol, and ammonium nitrate was 1,101, 360, 380, and 386 yuan per ton, with year-on-year changes of +16%, -46.7%, +675.8%, and -47.6% respectively [2] Group 4: Growth Potential and Dividend Policy - The company has two coal mines under construction, with expected production capacities of 4 million tons/year and 2.4 million tons/year, respectively, set to begin trial production by the end of 2025 [3] - The company plans to invest 23.888 billion yuan in a coal deep processing project, with a construction scale of 900,000 tons/year of polyolefins, and has already completed significant investment [3] - The cash dividend amount for 2024 is expected to be 6.35 billion yuan, with a dividend payout ratio of 32.87%, indicating potential for increased dividends in the future [3]