Investment Rating - The report maintains a "Recommended" rating for the company [4][7]. Core Views - The company's coal production and sales have shown a significant recovery on a quarter-on-quarter basis, despite a decline in coal prices [4]. - The company has a strong cash position with a net cash of 12.13 billion and a debt-to-asset ratio of 26.24%, indicating financial stability [3]. - The company is initiating the injection of mining rights assets from its controlling shareholder, which is expected to enhance production capacity [4]. Financial Performance Summary - For the first half of 2025, the company reported revenue of 5.965 billion, a year-on-year decrease of 19.2%, and a net profit of 876 million, down 39.0% [1]. - In Q2 2025, the company achieved revenue of 3.541 billion, with a quarter-on-quarter decrease of 4.8% but an increase of 46.1% year-on-year; net profit was 364 million, down 44.5% quarter-on-quarter and 29.0% year-on-year [1][2]. - Coal production for H1 2025 was 17.2191 million tons, up 1.7% year-on-year, while coal sales were 13.2949 million tons, down 8.0% year-on-year [2]. - The average selling price of coal was 421.74 yuan per ton, a decrease of 14.8% year-on-year [2]. Production and Sales Summary - In Q2 2025, the company produced 9.3565 million tons of raw coal, an increase of 10.4% quarter-on-quarter and 19.0% year-on-year; sales of commercial coal were 8.0332 million tons, up 7.1% quarter-on-quarter and 52.7% year-on-year [3]. - The average selling price in Q2 2025 was 418.89 yuan per ton, with a slight decrease of 1.7% quarter-on-quarter [3]. Future Earnings Forecast - The projected net profits for 2025, 2026, and 2027 are 1.689 billion, 2.209 billion, and 2.487 billion respectively, with corresponding EPS of 1.01, 1.32, and 1.49 yuan [4][6]. - The report anticipates a PE ratio of 13, 10, and 9 for the years 2025, 2026, and 2027 respectively, based on the closing price on August 27, 2025 [4].

Core Viewpoint - The company is expected to see a gradual recovery in production and sales starting from Q1 2025, with a narrowing decline in year-on-year performance for 2024 and 2025 [1][2]. Financial Performance - In 2024, the company reported an operating revenue of 35.85 billion yuan, a decrease of 16.89% year-on-year, and a net profit attributable to shareholders of 2.45 billion yuan, down 69.08% year-on-year [2]. - For Q1 2025, total operating revenue was 6.968 billion yuan, a decline of 19.53% year-on-year, with a net profit of 657 million yuan, down 48.95% year-on-year [2]. - The company forecasts EPS for 2025-2027 to be 0.93, 1.06, and 1.18 yuan respectively, with a target price of 13.51 yuan based on a comparable company PE of 14.49x for 2025 [2]. Production and Sales - In 2024, the company's raw coal production was 57.57 million tons, a decrease of 4.7% year-on-year, and merchandise coal sales were 52.25 million tons, down 5.0% year-on-year [2]. - For Q1 2025, raw coal production was 13.57 million tons, an increase of 2.49% year-on-year, and merchandise coal sales were 11.87 million tons, up 0.51% year-on-year, indicating a recovery in sales [3]. Cost and Pricing - In 2024, the average selling price of coal was 645.6 yuan per ton, down 11.24% year-on-year, while the cost was 391 yuan per ton, up 12% year-on-year, resulting in a gross profit of 255 yuan per ton, down 32.9% year-on-year [3]. - For Q1 2025, the average selling price of coal was 543 yuan per ton, down 21.26% year-on-year, and the cost was 340 yuan per ton, down 10% year-on-year, leading to a gross profit of 140 yuan per ton, down 55% year-on-year [3]. Resource and Capacity - The company has secured exploration rights for the Shama block in 2024, adding over 800 million tons of coal resources, which supports future development [3]. - The company operates 18 production mines with an advanced capacity of 49.7 million tons per year, with an average single mine scale of 3 million tons per year, indicating a leading level of intensive production [3][4]. - Planned and under-construction mines, such as Xinyu Coal Industry and Yuanfeng Mining, are expected to add a combined capacity of approximately 8.5 million tons per year [4].