Core Viewpoint - The company is a quality private coal enterprise rooted in coal trading and has expanded into Indonesian coal mining, with a focus on improving profitability and optimizing its balance sheet. Group 1: Company Overview - The company started in 1996 with coal trading and was listed on the Hong Kong Stock Exchange in 2009, subsequently acquiring domestic coal mines to expand its industry chain [1] - The company has terminated its operations in Shanxi, which had been a burden due to continuous losses and is expected to record a gain of approximately 196 million yuan from the sale of these assets [1] Group 2: Financial Performance - In the first half of 2025, the company reported a net loss attributable to shareholders of 126 million yuan, primarily due to losses from the terminated Shanxi coal business amounting to 150 million yuan [1] - The company's debt ratio is expected to improve significantly from 95.9% in 2024 to 59.6%, indicating a gradual recovery of its balance sheet [1] Group 3: Indonesian Business Development - The Indonesian business has shown profitability with earnings of 24 million yuan in the first half of 2025, an increase of 67 million yuan year-on-year, indicating enhanced profitability [2] - The company holds mining rights in five major Indonesian mining areas, with the SDE mine area having a planned capacity of 30 million tons [2] - The SDE mine area has rich reserves of approximately 900 million tons, with production expected to reach 12-13 million tons in 2026 and 17-18 million tons in 2027 [2] Group 4: Cost and Tax Advantages - The production cost at the SDE mine is low, and the establishment of a biomass power plant is expected to further reduce production costs per ton of coal [2] - The company benefits from a lower royalty tax rate for its mining rights, with the SDE mine's tax rate expected to be between 6.0% and 9.5%, which is significantly lower than other mining rights [3] Group 5: Strategic Initiatives - The company is adopting an innovative cooperation model of "light asset resource development + strategic equity operation" by selling a 30% stake in the SDE mine to Zhejiang Energy Group, which will help in capital recovery [3] - Future plans include optimizing capital efficiency and enhancing cyclical resilience through a strategic path of exploration, infrastructure creation, and collaboration with strategic investors [3] Group 6: Investment Outlook - The company is expected to see significant growth in net profit from 131 million yuan in 2025 to 1.196 billion yuan in 2027, with corresponding EPS of 0.05, 0.25, and 0.47 yuan per share [3]