Investment Rating - The report maintains a "Recommended" rating for Shanxi Coking Coal (000983.SZ) based on expected internal and external growth, as well as a high cash dividend ratio [4]. Core Views - The company's revenue for the first three quarters of 2025 was CNY 27.175 billion, a year-on-year decrease of 17.88%, while the net profit attributable to shareholders was CNY 1.434 billion, down 49.62% year-on-year [1]. - In Q3 2025, the company achieved a revenue of CNY 9.122 billion, a year-on-year decline of 20.84%, but a quarter-on-quarter increase of 1.04%. The net profit for the same period was CNY 420 million, down 52.24% year-on-year but up 26.3% quarter-on-quarter [1][2]. - The company’s gross profit margin in Q3 2025 was 31.74%, showing a year-on-year decrease of 1.55 percentage points but an increase of 2.53 percentage points quarter-on-quarter [1]. Summary by Sections Financial Performance - Q3 2025 total expenses were CNY 1.494 billion, a quarter-on-quarter decrease of 2.03% and a year-on-year decrease of 10.17%. Management expenses were CNY 757 million, down 24.67% year-on-year and 14.29% quarter-on-quarter. Financial expenses increased by 144.4% year-on-year to CNY 310 million [2]. - The report forecasts net profits for 2025-2027 to be CNY 2.029 billion, CNY 2.750 billion, and CNY 3.012 billion respectively, with corresponding EPS of CNY 0.36, CNY 0.48, and CNY 0.53 [4]. Market Outlook - The report indicates that coking coal prices have rebounded since August 2025, with the average price in October rising by CNY 290 per ton compared to July. This price increase is expected to improve the company's performance in Q4 2025 due to tightened supply from stricter safety and environmental inspections [2]. - The company has obtained a mineral resource exploration license for the Lvliang Xing County block, which has coal reserves of 95.2775 million tons and bauxite reserves of 5.56123 million tons. This development is expected to enhance the company's sustainable growth and competitive advantage in the coal industry [3].

Summary of Shaanxi Coal Industry Conference Call Industry Overview - Shaanxi Province has abundant coal resources with proven reserves of 29.1 billion tons, accounting for 14.06% of the national total, ranking fourth in China [2][6] - The majority of reserves are located in the northern Shaanxi region, which holds over 80% of the total reserves [2][14] - The coal types primarily include low metamorphic long flame coal and non-caking coal, which together make up over 65% of the reserves [2][6] Key Points and Arguments - The recovery rate of coal resources in Shaanxi is below national standards, with the recovery rates in Yulin City being 58.51% for thick coal seams, 62.79% for medium seams, and 68.23% for thin seams [2][14] - There is significant potential for improvement in recovery rates, especially in small coal mines where rates can be below 20% [2][14] - As of early 2024, Shaanxi has 367 coal mines with a total production capacity of 821 million tons per year, with Yulin City contributing 76.23% of this capacity [2][7] - The development strategy for Shaanxi's coal resources focuses on stabilizing production in Weibei, actively developing Binchang, and prioritizing northern Shaanxi [2][13] Mining Conditions and Characteristics - The main mining areas are in northern Shaanxi and the Guanzhong region, with northern Shaanxi having better mining conditions [4][10] - Historical consolidation of coal mines has improved mining efficiency, but further improvements are needed to meet national recovery standards [4][15] - The geological conditions in the Huanglong Jurassic region are more complex, with some areas having high gas content, making mining more challenging [5] Production and Capacity - The province's coal production in 2023 reached 252 million tons, with Shaanxi Coal and Chemical Group being the dominant player, accounting for 32.1% of the total production [2][9] - There are 22 large-scale mines with a production capacity of 336 million tons per year, indicating a concentration of production in larger operations [2][7] Quality and Supply - Shaanxi's coal quality is characterized by low ash and sulfur content, with high calorific value, making it suitable for environmental applications [8] - The province serves as a significant supply source for 24 cities across East and South China, demonstrating strong supply capabilities [8] Policy and Strategic Planning - The provincial government has outlined strategic plans to focus on the development of northern Shaanxi coal mines, while older mining areas in Guanzhong are expected to see a gradual reduction in production capacity [2][13] Additional Insights - The overall development difficulty of coal resources in Shaanxi is low, aided by favorable transportation conditions that allow for multi-directional transport [10] - The concentration of coal enterprises in the province is high, with major players like the National Energy Group holding significant production capacities [9]