Summary of Shanxi Coal International Conference Call Company Overview - **Company**: Shanxi Coal International - **Date**: October 2025 Key Points Industry and Sales Performance - October sales were impacted by the off-peak season, leading to a significant decline in thermal coal sales, while metallurgical coal sales remained stable, ensuring no issues for annual sales [2][3] - Overall prices saw a slight increase compared to September, with good cost control expected to keep annual costs below 300 RMB/ton, a decrease of 5%-10% year-on-year [2][3] - Inventory has been decreasing since the peak in July 2025, currently around 1.56 million tons, with manageable year-end inventory pressure expected to remain between 200,000 to 300,000 tons [2][5] Pricing Mechanism - The company employs a pricing mechanism based on a benchmark price plus a floating price, with some products reaching price ceilings and executing long-term contracts [2][6] - For 2026, there may be adjustments to long-term contract pricing to align more closely with market conditions, potentially moving to a benchmark price rather than a range [2][7] Production and Supply - Production in October 2025 was around 2.6 million tons, with a full-year production target of 30-35 million tons, which is expected to be met [3][4] - The company has announced the purchase of over 2 million tons of capacity indicators to supplement procedures for the Changchun Xin and Hanjiawa mining areas, which will not affect existing capacity [2][10] - The complexity of capacity increase procedures in Shanxi province may impact future supply if not completed by year-end [2][11] Market Regulations and Taxation - There are rumors that the National Development and Reform Commission (NDRC) may guide state-owned enterprises to control coal prices below 850 RMB/ton, but the company has not received any formal guidance yet [2][12] - The company faced high tax burdens in Q3 due to increased resource taxes and local tax authority demands for back payments, but pressure is expected to ease in Q4 [2][13][14] Future Price Outlook - The coal supply-demand relationship is expected to improve in 2026, but the intensity of supply-side reforms may weaken [2][15] - Coal prices are projected to fluctuate between 700 to 800 RMB/ton, with potential risks of price drops during the off-peak season [2][16] Specific Coal Types - The price trends for coking coal and premium coking coal have diverged, with premium coking coal prices rising significantly while coking coal prices have remained relatively stable [2][18] Supply Assurance - The company aims for a total sales target of 25-26 million tons in 2025, with a supply assurance target of 16-17 million tons, of which approximately 13-14 million tons have been completed [2][17] General Market Sentiment - The recent supply assurance meetings are primarily aimed at addressing winter heating demands, with no strict requirements set for achieving the 1.3 billion ton target, indicating limited marginal impact on overall production plans [2][19]

Core Viewpoint - The company is focusing on the integration of coal power and renewable energy, aiming to enhance its operational efficiency and profitability while promoting green development and high-quality growth [1][2][3] Group 1: Company Overview - Huadian Energy operates 12 wholly-owned and controlled thermal power generation enterprises and one coal enterprise, with a total installed capacity of 6.412 million kilowatts and a total heating area of 143 million square meters [1] - The company is the largest thermal power generation enterprise in Heilongjiang Province, primarily producing electricity and heat, with its thermal power plants located in major cities [1] - Huadian Energy also engages in coal production and sales, with its coal enterprise located in Shanxi Province, focusing on high-quality thermal coal and coking coal [1] Group 2: Environmental and Safety Initiatives - The company emphasizes environmental protection and transformation in coal energy, implementing a clear development path for environmental governance and clean utilization of coal [2] - Safety is a cornerstone of the company's operations, with strict adherence to safety production responsibilities and the application of advanced technologies for real-time monitoring of over 200 key indicators [2] Group 3: Investment and Project Development - On November 8, the company announced plans to invest 12.043 billion yuan in the construction of two 660,000-kilowatt thermal power generation units and a 1.4 million-kilowatt wind power project [2] - This investment is a significant milestone in the company's energy structure transformation, expected to enhance the capacity and proportion of clean energy [2][3] - The "coal power + renewable energy" integrated operation model aims to optimize the company's power generation structure and improve overall operational efficiency [3] Group 4: Strategic Growth and Capacity Enhancement - The investment project will replace six smaller units with two advanced 660,000-kilowatt units, significantly improving energy efficiency and reducing emissions [3] - The acquisition of capacity replacement indicators by the company's subsidiary is in line with national policies, enhancing the company's capacity reserves and supply capabilities [3]

Core Viewpoint - Huadian Energy is focusing on the integration of coal and renewable energy to enhance operational efficiency and promote green development, with significant investments planned for new projects [1][2][3] Group 1: Company Overview - Huadian Energy operates 12 thermal power generation enterprises and one coal enterprise, with a total installed capacity of 6.412 million kilowatts and a heating supply area of 143 million square meters [1] - The company is the largest thermal power generation enterprise in Heilongjiang Province, primarily engaged in the production and sale of electricity and heat [1] - The coal production and sales operations are based in Shanxi Province, focusing on high-quality thermal coal and coking coal, serving multiple regions including Shandong, Anhui, and others [1] Group 2: Environmental and Safety Initiatives - The company emphasizes environmental protection and the transformation of coal energy, implementing a clear development path for environmental governance and clean utilization of coal [2] - Safety is a cornerstone of the company's operations, with strict adherence to safety production responsibilities and the use of advanced technologies for real-time monitoring of over 200 key indicators [2] Group 3: Investment and Project Development - Huadian Energy plans to invest 12.043 billion yuan in the construction of two 660,000-kilowatt thermal power generation units and a 1.4 million-kilowatt wind power project [2] - The investment is seen as a significant milestone in the company's energy structure transformation, expected to enhance the capacity and proportion of clean energy [2][3] - The "coal and renewable energy" integrated operation model aims to optimize the power generation structure and improve overall operational efficiency and profitability [3] Group 4: Strategic Initiatives - The investment project will replace six smaller units with two advanced units, significantly improving energy efficiency and reducing emissions [3] - The acquisition of capacity replacement indicators by the subsidiary Jin Xing Company aligns with national policies, enhancing the company's capacity reserves and supply capabilities [3]

Group 1: Coal Business Overview - The company operates 11 coal production mines with an approved annual capacity of 23.14 million tons, including a reserve capacity of 1.8 million tons/year [2][3] - Main coal products include coking coal and thermal coal, with specific mines producing low-sulfur, low-ash, high-calorific value coking coal [3] - Internal coal consumption for power and chemical plants is projected to be nearly 12 million tons/year, subject to changes based on coal quality and source structure [3] Group 2: Power Generation Business - The company’s main operating power plant, Baiyin Thermal Power, has two 350MW supercritical coal-fired units, achieving low coal consumption and significant profitability in the first half of the year due to falling coal prices [4] - The New District Thermal Power project includes two 350MW units with a designed annual output of 3.302 billion kWh and is currently in preparation for startup [4][5] - The Qinyang Coal Power project plans to build two 660MW ultra-supercritical units with a designed annual output of 7 billion kWh, currently under construction [5] Group 3: Chemical Business - The Liu Chemical project is in trial operation, producing ammonia, urea, and other chemicals, with production volumes adjustable based on market demand [6] - The controlling shareholder's subsidiary, Jinchang Chemical, is in trial operation with similar processes, and the company plans to address potential competition issues post-completion [6] Group 4: Profit Distribution - The company has implemented a stable profit distribution policy, with 18 cash dividends totaling 3.2 billion yuan (including 150 million yuan in share buybacks) over the past 17 years [7] - Future plans include maintaining a robust dividend policy to provide consistent cash returns to investors [7] Group 5: Financing Situation - The company has established strong relationships with local banks for traditional credit financing, benefiting from favorable lending policies and low interest rates [8] - Current projects are funded through self-raised capital, bank loans, and strategic investors, with specific projects utilizing raised funds [8] Group 6: Market Value Management - The company’s stock price has been below the net asset value per share for 10 consecutive months, prompting a focus on market value management strategies to enhance company valuation [9]

Core Viewpoint - Yongtai Energy has clarified that its current coal products are high-quality coking coal and blending coal, primarily used in the steel smelting industry, rather than thermal coal for power plants [1] Group 1 - The company is focused on producing high-quality coking coal and blending coal [1] - The coal products are specifically utilized in the steel smelting sector [1] - The shale gas project exploration and development is progressing according to national requirements and technical specifications [1]

Core Viewpoint - Gansu Energy Chemical is making significant strides in integrating its coal, electricity, and chemical industries through strategic acquisitions and investments, aiming for enhanced operational efficiency and market competitiveness [1][2][3]. Group 1: Acquisition and Investment - Gansu Energy Chemical plans to acquire 100% equity of Gansu Energy Chemical Coal Transportation Co., Ltd. from its controlling shareholder for 102 million yuan, marking a key step in its industry chain integration [1][2]. - The company will invest 1.329 billion yuan in the renovation project of its subsidiary, aiming to alleviate resource depletion pressures and ensure stable production [2][3]. Group 2: Business Operations and Future Plans - The company operates two mining areas with a total approved annual production capacity of 16.24 million tons and has three ongoing projects with a combined capacity of 6.9 million tons [3]. - Gansu Energy Chemical has set ambitious targets for 2025, including coal production of 17.05 million tons and electricity generation of 3.974 billion kWh, with a total investment of 6.266 billion yuan [3][4]. Group 3: Market Challenges and Strategic Response - In the first half of 2025, Gansu Energy Chemical faced significant market challenges, reporting a revenue decline of 33.91% year-on-year and a net loss of 182 million yuan due to high coal inventory levels and weak demand [4]. - The company plans to implement measures such as optimizing coal sales structure and enhancing management to mitigate the impact of falling coal prices [4].

Group 1: Coal Business Overview - The company operates 11 coal production mines with a certified annual capacity of 23.14 million tons, including a reserve capacity of 1.8 million tons/year [2][3] - Main coal products include coking coal and thermal coal, with a focus on low-sulfur, low-ash, and high-calorific value qualities [3] - Internal coal consumption for power and chemical plants is projected to be nearly 12 million tons/year, subject to changes based on coal quality and sourcing [3] Group 2: Power Generation Business - The company’s main operating power plant, Baiyin Thermal Power, has two 350MW supercritical coal-fired units, achieving low coal consumption rates and high utilization hours [4][5] - New projects include a 2×350MW thermal power plant in Lanzhou New Area, with an expected annual output of 3.302 billion kWh and a heating capacity of 13.6241 million GJ [5] - The Qinyang Coal Power Project plans to establish two 660MW ultra-supercritical units, with an annual generation capacity of 7 billion kWh [5] Group 3: Chemical Business Development - The company is developing a clean and efficient gasification project, with the first phase in trial operation and the second phase under construction [6] - Products from the chemical project include ammonia, urea, methanol, and other derivatives, with production adjusted based on market demand [6] Group 4: Financial Performance and Strategies - The company reported losses in Q2 due to cyclical and seasonal declines in coal prices and sales [7][8] - Strategies to mitigate losses include increasing sales efforts, optimizing product quality, and accelerating project construction [8] - The company has implemented a stable profit distribution policy, with cumulative cash dividends amounting to 3.2 billion yuan over 17 distributions since restructuring [8] Group 5: Future Outlook and Initiatives - The company aims to enhance operational efficiency through cost control and intelligent mining practices [8] - Future projects include the development of coal cleaning facilities and the integration of coal utilization projects to improve product quality [8] - The company is committed to maintaining a proactive dividend policy to ensure stable returns for investors [8]

Report Information - Report Type: Coke and Coking Coal Daily Review [1] - Date: July 18, 2025 [2] - Research Team: Black Metal Research Team [3] - Researchers: Zhai Hepan, Nie Jiayi, Feng Zeren [3] 1. Market Review and Future Outlook 1.1 Spot Market Dynamics and Technical Analysis - On July 17, the main coke and coking coal futures contracts 2509 rebounded significantly after two days of decline. The J2509 contract closed at 1,519 yuan/ton, up 1.00%, and the JM2509 contract closed at 918.5 yuan/ton, up 1.55% [5]. - The daily KDJ indicators of the coke 2509 contract showed a divergent trend, with the J and K values turning up, but the D value continuing to decline slightly. The daily KDJ indicator of the coking coal 2509 contract changed from a dead cross to a golden cross. The daily MACD red bars of both contracts continued to narrow, but the decline rate slowed down significantly [8]. 1.2 Future Outlook - Coke: Last week, the coke output of independent coking plants dropped to the lowest since early April, and the coke output of steel mills dropped to the lowest since mid - March. Port coke inventories rebounded from the lowest since early March, steel mill coke inventories hovered at a slightly higher level after hitting the lowest since mid - December last year, and coking plant inventories dropped to the lowest since mid - January. The profit per ton of coke has been in the red for 8 consecutive weeks, and the loss widened for 3 consecutive weeks last week. On July 17, the first round of coke spot price increase was implemented [9]. - Coking Coal: From January to May, the year - on - year decline in imports widened significantly by 4.0 percentage points to - 7.3%. In the past 5 weeks, the raw coal and clean coal inventories of coal washing plants have dropped significantly, with declines of 11.1% and 23.8% respectively. The inventories of independent coking plants have increased significantly for 3 consecutive weeks to the level of mid - May, and port inventories have increased for 2 consecutive weeks to the level of late April. However, steel mill inventories declined slightly last week. With stable steel mill purchases, coking plants actively replenished stocks, and coking coal spot prices rebounded [9]. - Overall: Since early July, coke and coking coal futures have rebounded significantly driven by the anti - involution market. It is expected that the prices of coal and coke may continue to rise in the first half of July. One can try to buy for hedging or investment on dips but should take profits in time before the end of July to avoid the negative impact of the obvious correction in August - September on the positions [9]. 2. Industry News - The State Council Executive Meeting, chaired by Premier Li Qiang, focused on strengthening key policies for the domestic large - cycle. The meeting emphasized finding key points, implementing consumption - boosting actions, and releasing domestic demand potential [10]. - An all - around domestic demand expansion research and consultation symposium was held in Beijing on July 16. Wang Huning stressed the importance of expanding domestic demand for long - term economic health and meeting people's needs [10]. - In the first half of 2025, the total social energy consumption increased by 3.9% year - on - year, 0.3 percentage points faster than in Q1. The energy consumption structure continued to optimize, with the proportion of non - fossil energy rising by 1.7 percentage points [11]. - From June 30 to July 6, the average coal price in Shanxi Province was 790.58 yuan/ton, up 0.3% month - on - month. The price of thermal coal fluctuated upward, coking coal prices stabilized, and anthracite prices mainly declined. It is expected that coal prices may be weak in the short term [11]. - In early July, the key steel enterprises produced 20.97 million tons of crude steel, with an average daily output of 2.097 million tons, down 1.5% from the previous period. The daily output of pig iron and steel products also declined [11]. - In H1 2025, the top 10 coal enterprises produced 1.18 billion tons of raw coal, an increase of 40.26 million tons year - on - year, accounting for 49.2% of the output of enterprises above designated size [11]. - New Steel Co., Ltd. expects to turn a profit in H1 2025, with a net profit of 89 million - 112 million yuan [11]. - Liugang Co., Ltd. expects a net profit of about 340 million - 400 million yuan in H1 2025, a significant increase year - on - year [11]. - Maanshan Iron & Steel Co., Ltd. expects to reduce losses in H1 2025, with a net loss of about 75 million yuan [12]. - Bayi Iron & Steel Co., Ltd. expects to record a loss in H1 2025 due to weak supply - demand and low steel prices [12]. - Jiugang Hongxing Iron & Steel Co., Ltd. expects to reduce losses in H1 2025 [12]. - Chongqing Iron & Steel Co., Ltd. expects to reduce losses in H1 2025 [12]. - On July 14, the daily power generation of China Energy Investment Group reached 4.07 billion kWh, 8 days earlier than last year's peak - summer period. The photovoltaic power generation reached a record high of 302 million kWh [12]. - Xinji Energy aims to build a comprehensive energy supply system and enhance its long - term investment value [12]. - Shaanxi Coal Industry Group achieved stable production and operation in H1 2025, with revenue of 227.5 billion yuan, profit of 18.04 billion yuan, and investment of 16.03 billion yuan, up 52.3% year - on - year [13]. - Ruimaotong expects a significant decline in net profit in H1 2025 due to a loose coal market [13]. - Gansu Energy Chemical Industry Co., Ltd. expects to turn from profit to loss in H1 2025 due to weak coal demand and falling prices [13]. - On July 16, the national maximum power load exceeded 1.5 billion kilowatts for the first time, indicating strong power demand driven by high temperatures and economic growth [13]. - From January to May, the steel industry in Hebei Province ran smoothly, with a 14% increase in the added value of the advanced steel industry. The industry's profit accounted for 30.39% of the national total with 21.51% of the output [14]. - In H1 2025, the newly approved coal - fired power projects increased by 152% year - on - year. It is likely that the annual approval will exceed 60GW. The profitability of thermal power is recovering, and the valuation of power equipment manufacturers is expected to rebound [14]. - India achieved its target of 205 million tons/year of crude steel production capacity in the 2024 - 2025 fiscal year and is moving towards the 300 million tons/year target by 2030 - 2031. However, the industry faces challenges such as high import dependence on coking coal and high logistics costs [14]. 3. Data Overview - The report provides various data charts, including the spot price index of metallurgical coke, the spot price of coking coal, production and inventory data of coking plants and steel mills, and the basis between spot and futures prices [16][18][22]

Investment Rating - The investment rating for Yanzhou Coal Mining Company is "Buy" [3] Core Views - The acquisition of a 51% stake in Northwest Mining Company for CNY 14.066 billion is a strategic move to enhance growth and resource base [3][4] - Northwest Mining has rich coal resource reserves with a total approved capacity of 61.05 million tons per year, and it operates in key regions such as Shaanxi, Gansu, Shanxi, and southern Inner Mongolia [3] - The company is expected to see a rebound in profitability in 2024, excluding non-recurring losses, with an adjusted net profit of approximately CNY 2.4 billion, indicating growth compared to 2023 [3] - The acquisition is projected to increase Yanzhou Coal's revenue and net profit by approximately 12.37% and 7.68% respectively in 2024 [4] - The deal is characterized by low cash outflow and attractive valuation metrics, with a price-to-earnings ratio of 7.69, which is lower than Yanzhou Coal's A-share PE of 8.8 [6] Financial Summary - For 2023, total revenue is reported at CNY 150.1 billion, with a projected decline to CNY 139.1 billion in 2024, followed by a slight recovery in subsequent years [5] - The net profit attributable to the parent company is expected to decrease from CNY 20.1 billion in 2023 to CNY 14.4 billion in 2024, with a gradual recovery thereafter [5] - The gross margin is forecasted to decline from 40.6% in 2023 to 35.8% in 2024, stabilizing around 34% in the following years [5] - The company aims to achieve a coal production target of 300 million tons, with the acquisition being a crucial step towards this goal [4][6]

Investment Rating - The investment rating for Yanzhou Coal Mining Company is "Buy" [3] Core Views - The acquisition of a 51% stake in Northwest Mining Company for 14.066 billion yuan is a strategic move to enhance growth and resource reserves [3][4] - Northwest Mining has rich coal resource reserves with a total approved capacity of 61.05 million tons per year, and it operates in key regions such as Shaanxi, Gansu, Shanxi, and southern Inner Mongolia [3] - The company is expected to see a growth in profitability in 2024, excluding non-recurring losses, with an adjusted net profit of approximately 2.4 billion yuan [3] - The acquisition is projected to increase Yanzhou Coal's revenue and net profit by approximately 12.37% and 7.68% respectively in 2024 [4] Financial Summary - In 2023, total revenue was 150.1 billion yuan, with a projected decline to 139.1 billion yuan in 2024, followed by a slight recovery in subsequent years [5] - The net profit attributable to the parent company is expected to decrease from 20.1 billion yuan in 2023 to 14.4 billion yuan in 2024, with a gradual recovery thereafter [5] - The gross margin is projected to decline from 40.6% in 2023 to 35.8% in 2024, reflecting the impact of market conditions [5] - The company is expected to maintain a low P/E ratio of 9.59 in 2025, indicating potential undervaluation [5][6] Strategic Focus - Yanzhou Coal will continue to focus on its coal business and accelerate the implementation of its goal to reach 300 million tons of raw coal production [6] - The acquisition is seen as a key step towards achieving this production target and enhancing the company's profitability [4][6] - The company plans to actively seek high-quality coal resources in strategic energy bases such as Shaanxi, Inner Mongolia, and Xinjiang, while also exploring overseas acquisition opportunities [6]