山煤国际20250522

Summary of Shanmei International Conference Call Company Overview - Company: Shanmei International - Industry: Coal Mining Key Points and Arguments Pricing Strategy - In May 2025, Shanmei International adjusted its thermal coal pricing strategy from a ceiling price to a base price plus a floating price, with the base price referencing the monthly price from the National Coal Trading Center and the floating price slightly above the spot price. The plan is to adjust prices monthly to respond to downward pressure on spot prices [2][4][23] Cost Management - The company experienced a significant reduction in costs in Q1 2025 but has not set a clear target for the entire year. Cost reduction efforts will focus on benchmarking management, optimization of mining decisions, and on-site control, although reducing labor costs will be challenging due to normal salary increases [2][7] Production and Sales - Shanmei International's raw coal production has remained stable at approximately 3 million tons per month in 2025, consistent with Q1 levels. The expected supply of thermal coal is 17 million tons, with pit sales around 10 million tons and port sales about 7 million tons. The annual sales volume of coking coal is projected to be around 8.5 million tons [2][10][9] Pricing Trends - The price of metallurgical coal has been on a downward trend since Q4 2024, with an average price of around 1,000 yuan/ton in Q4 2024 dropping to over 800 yuan/ton in Q1 2025. Data for Q2 2025 is not fully available, but the overall trend remains downward [2][12] Losses in Specific Mines - The Hongyuan and Xinxing mines are currently experiencing losses due to complex geological conditions, high gas levels, and pilot mining of protective layers. These mines are unlikely to turn profitable in the short term, but there is potential for improvement if production capacity can be accelerated in the next one to two years [2][15] Resource Expansion Strategy - The Hequ open-pit mine is expected to have about ten years of remaining mining life. The company considers resource expansion a key strategy and actively participates in provincial exploration rights auctions, prioritizing resources close to existing mining areas [3][17] Market Conditions - The company noted that despite a significant year-on-year decline in coal prices, the auction prices for exploration rights remain high, indicating strong demand for scarce resources. This suggests that overall acquisition costs may not decrease significantly [20] Dividend Plans - The company has a dividend commitment period from 2024 to 2026, but discussions on new return plans are premature, with a new dividend scheme expected to be implemented next year [22] Market Response - The price adjustment in May was a proactive measure to address market downturns, and other companies in the province are also adjusting their prices in response to similar market conditions [23] Additional Important Information - Safety production costs are set at 6.5 yuan/ton, with varying costs for different types of mines [8] - The transportation cost for pit sales is approximately 200 yuan/ton, which is borne by the buyer [11] - The company is currently focused on resource acquisition within Shanxi province, with no specific plans for expansion outside the region [21]