China Coal Energy Company Limited

and investors. I am Guo Wei and welcome you to participate in this semi-annual performance briefing of the company in 2023. I sincerely thank you for this long-term concern, support, and care for the company. We have with us CFO Chai Chaolin. We also have with us Security Affairs Department Strategic Planning Department, Finance Department, Coal Business Department, Coal Chemical Industry Department, Electric Power and New Energy Department, Coal Sales Center, Chemical Product Sales Center. Now I'm going to introduce this brief introduction of the company's performance in H1. For the H1 this year, the company fully implemented the development idea of improving our stock capacity, improve this efficiency, and then to have this restructuring of this overall growth. and then we have already got this overall high quality development maintaining a stable trend. So the first one is the coal production. We have already got output of commercial coal was 67.12 million tons, increase of 7.89 million tons by 13.3%. The sales volume of commercial coal was 147 million tons, increase of 13.17 million tons by 9.9%. Among them, the sales volume of self-produced coal was 64.85 million tons, a year-on-year increase of 10.6%. And we have this Buy All Trade Coal sales reached 76.2 million tons, up by 10.5% YOY. The sales volume of Asian coal was 5.61 million tons, down by 4.6%. And then for the selling price, the average selling price of self-produced one is 624 yuan per ton, down by 128 yuan. And the thermal coal is 548 yuan per ton, down by 13.8%. And the average selling price of coal king coal is 1,412 yuan per ton, down by 23.1%. The average selling price of buyout trade coal was 692 yuan per ton, down by 16.9%. And then the next one is about our production and sales of our major coal chemical products. The output of Poliolescent was 762,000 tons up by 1.3% YOY. Sales volume of 749,000 tons up by 3.0%. And Urea output was 986,000. sales volume was 1.199 million tons, up by 5.0%. So methanol output was 965,000 tons, down by 0.5%. And then the output of ammonium nitrate was 290,000 tons, YY increase of 32.4%. So all the selling price of main coal chemical products, the sales Coal Energy Company Limited Coal Energy Company Limited Coal Energy Company Limited Coal Energy Company Limited Coal Energy Company Limited Neonitride was 2,414%. The cost of main coal chemical products, the unit sales cost of polyolecine was 6,055 yuan per ton, while a decrease of 10.6%. The unit sales cost of urea was 1,680 yuan, and the unit sales cost of methanol was 1,973 yuan. And then equipment business, the output value of coal mine equipment was 4.91 billion yuan, up by 14.8%. Financial business operating income after deducting inter-segment transactions was 928 million, an increase of 12 million yuan or 1.3 by 1. Other businesses, we have operating income after deducting inter-segment transactions, including electricity, aluminum, processing equipment, et cetera. It's altogether worth 356 billion yuan, up by 2.9%. So for the main financial indicators in the first half of the year, the company achieved an operating income of 109.357 billion yuan, and the total profit was 20.138 billion yuan, and the net profit attributable to shareholders of listed companies was 11.8 billion yuan. The basic earning per share was 0.89 yuan and the YOY decrease of 0.12 yuan. And then for each one this year, we have 109.357 billion yuan. So it's down by 7.4%. The CAGR growth is 8.5%. So the total profit was 20.138 billion yuan, as I said before. And this market condition is not very good, and we still strive to make the positive ones. So the CAGR increase is also still quite high. So the basic earning per share was 0.89 yuan, while a decrease of 0.12 yuan. So the weighted average return on equity was 8.63%. And we also have like this weighted average return on equity was 8.63% down by 2.38%. The asset liability ratio was 49.9% down by 1.6%. And we also can see that all together we have this profit increasing factors like the sales volume of self-produced commercial coal increased by 2.706 billion yuan. And then the major risks are the first one is We have this unit sales cost of self-produced commercial coal decreased and the profit increased by 1.404 billion yuan. Our overall price of self-produced commercial coal decreased by 8.289 billion yuan. And we have the investment income decreased by 1.212 billion yuan. and we all together have this self-produced commercial closer price decline with this reduced profit of 8.289 billion. Investment income decreased by 1.212 billion yuan. So we can also see that the cash flow in H1 of this year, the net cash flow from the company's operating activity was 17.035 billion yuan and a YOY decrease of 3.087 billion yuan and then the YOY decrease of 2.007 yuan and we have already formed different kinds of management methods to deal with that. And then... So for H2 this year we will still carry on this overall development of this high quality development and then to also strengthen our overall construction to have this like overall like annual work and then to strengthen this project development. and then to perfectly realize all the different ones and then to further enhance this energy security supply guarantee capacity and promote this green and low carbon transformation development. The second is to thoroughly implement development requirements for this deepening and upgrading the reform of state-owned enterprises, promote the reform to be deeper and more practical with a higher level. And we also have like a continuously development of that. The third is adhere to this world-class benchmarking company and continue to further promote the lean management, vigorously carry out quality improvement and efficiency improvement, focus on improving this quality of this operating and development. And then the fourth one is continue to improve the innovation management system to accelerate the construction of innovative competence and then to also accelerate the construction of intelligent management and the control platform integrating production, operation and management and drive transformation and development with innovation. The fifth, we will continue to adhere to this system concept and bottom line thinking, better coordinate and develop this safety and security and also to have this better carbon emission reduction and to have this overall development of this green development. The sixth one is we actively promote Coal Energy Company Limited Coal Energy Company Limited Coal Energy Company Limited Thank you for your questions. Thank you. So thank you so much for this sharing from the leadership. So now we will have this interaction session. So hello, everybody. For the participants on this online session, you first press star and then 1. For the online participants, you could type your questions or you could press the button of raise your hand to do this voice. So if you want to propose a question from the telephone line, you first press star and then number one. And then for online participants, you could like type your questions or you could directly press the raise your hand button there and then to speak for your question. So now let's have 6402 to propose the question. So first tell us where are you from. Hello, and all the leaders, good afternoon. I am Mission Security's Wang Xingshan, so I have three different questions to ask the company. The first one is about our CapEx, because for entire H1, I see that CapEx is actually quite low. I would like to know what is the reason, and then we also can see that for the entire year, we have this overall adjustment of the CapEx. We have that, so for CapEx. Okay. So for this, I would like to have our colleague to answer that. Thank you so much for the question. So compared with 2022, we significantly improved the capex. and then we have about 24% of the realization. So we also can see the reason why number one is we strictly like stick to this examination and then we also can see that for the time it will be. like a longer so for this investment we see this in turn of the return it will be taking a longer period of time next reason is when we do this restructuring and that it has something to do with this overall cycle of this macroeconomic condition so these are the two reasons why we have the lower capex realization rates thank you okay So please carry on. And then we also can see that for this annual plan, we don't have any adjustment for that. Thank you so much. Thank you so much. Yes, I still have two more questions. Hello, can you hear me? I still have two more questions. I would like to ask them together. The second question is, I would like to know why And then the third question is about this Shanxi Yolaoyao, this deep integration, and we have about like $90 billion of this benefit, and we still have about $80 million of that. However, for this deep processing, we have about 70% of this investment. It's about $14 billion. We still hope to use this loan to solve that. I want to know what's your consideration. Thank you. That's the two questions I have. Thank you so much. Okay, so who wants to answer that? It's about this Yulin City Processing Project. Okay, so I would like to answer this question about the third question. And you can also see it's about this capital gain and about our loan. I would like to have our colleague to answer that. I would have Mr. Chai to answer that. And later I also would like to add up for this project for us, you can also see for our investments, and we have played a very good role for that and generally speaking for this overall development for this whole structure and because now we have about $90 billion to be down to $30 billion and we also can see that a part of that is we have Coal Energy Company Limited for this about $20 billion of this loan that is about to expire. So we also would like to say that so the second thing is for this overall CapEx and for all the different projects for this final investment we could guarantee all those projects could be launched. And then the next thing is for We need to have at least 30% of all the projects for that. So for this CapEx, we will just hold it a little bit. We will hold that for the different banks. They will follow us to give us the loans. So for this overall investment plan, we have this overall plan. And then we can also see for China Co., we have this very orderly management plan. of our profits. So for this capital plan is like that because we hope to hold more cash flow. So for every year we also have this existing money to have this report and declaration and then to also like manage our cash flow and then this is the way for you. Thank you. I hope I have answered your question. Okay, now I would like to answer the second question. I would like to know that for this data, where did you get it? For this semi-annual, can you hear me? Yes, I can hear you. For this semi-annual report, the previous question is very clearly answered. Thank you. So for this, I have checked this semi-annual report. It's certain information about the subsidiary financial conditions. Okay. so for H1 last year for the subsidiaries and we also can see that it's about like a 2023 and then this is about 31.15 so okay got it Thank you so much. The first one is for H1 for this output of the coal. Indeed, this is actually quite good compared with other different companies. We have this very significant increase. We have already seen that for H1, we also have some new investments. And for... I would like to know, like, what is this capacity for H2? And will it actually have more contributions for H2 or maybe for next year? And for the coals, so maybe for like Dahai Tong, and we also have some increase of that. and then we also could have some other like potential capacity that could be added and then whether we could just put it in production. This is about the capacity and the production. The second question is I would also like to know that for H1 this year and for next year for kinetic coal and for electricity coal, what is your prospect into the future? Thank you. Okay, for the first question, I will first have with us our coal business leader to answer that. For H1 this year, for this coal capacity, basically this is according to our plan. It's slightly higher than our plan, so we have about $67 million. Basically, it satisfies our timeline and our plan according to the timeline and for H2. and we have two important key points. The first one is about this potential increase and whether we could release some potential production because we are based on some other different technologies and then we put it in this protected list. And we are also using several elements of that. So for this increment, it will not be like clearly shown in H2 this year. So for the third one, it's about like a Da Hai Zhe. So for the future supply of Da Hai Zhe next year, I think we still certainly have some potential increase as a company. So for next year, the main contribution of this new capacity is coming from the hydro. Thank you so much for this steam coal. Okay, can you hear me? And for the next question, can you please repeat that? For the second question, I would like to ask you to look forward to this H2 for this steam coal and coal king coal price prospect. Okay, thank you. So you can also see for this price. We indeed look forward to that as one of the focuses. However, the market is always developing in an unexpected, surprising way. So I would like to share with you from this demand and supply end analysis, from this supply end. So for each one's production, it's about 2.3, and then we already increased by 7.4%. And then it is up by 93%. So we also can see that from what you have already said, this is like the guarantee of this production is being done orderly manner. And then this is also having this significant decline of this coal price internationally. And we have this zero-terrace policy with this very cheap imported one. So we can see that this import will definitely highly exceed that to have this great increase So altogether, for our imported coal and our capacity, I would like to say this is a very sufficient supply. And from the demand perspective, we could feel that for the demand, this is quite weak growth. And this is for this pandemic. After the pandemic, we have this very big demand. is a reverse expectation with this kind of supply-demand relationship. For H1, I think this is about going down for the price. So it's actually like $722, and then for this in-stock, it's about $1042. So the price compared with last year, we still have quite a significant decline. And speaking of this demand of supply-demand, We can also see that these are not very matchy and this is the reason why we have that, to have this price decrease. So it's a little half of this year. We have to demand on this industrial projects to be launched. And then with this macroeconomic recovery, so we still have some uncertainties. And then I will not have a very clear expectation for that. It depends on like how big the economic development will have that. So we still have like a basic judgment. It's about like a fluctuation among that, but it won't have like a big increase. It won't have like a big decline as well for the price of that. We think this is actually in the fluctuation range. So from this Freight Coal King Coal, I think this is actually the supply is quite sufficient and the demand is actually not as high as we expected. So for this Coal King Coal, we still use like this low stock condition. So for this low stock status quo, so from this Freight perspective to a certain period of time, it has reflected this overall negative view about the market. So for H1 of this year, and I think it has already got about 800 to 1,000 RMB for the unit price. It's actually quite a big slump. And for H2 this year, our preliminary judgment is we could have this certain rebound. However, for this positive market trend, it's actually quite hard to be got rebound. And then for this later of the time, we would like to see what is the support of that. If it has this certain lifting of these restrictions, we will definitely have some positive trends. However, for our preliminary judgment, it's actually like a quite low momentum of the growth. That's all for me. Thank you so much for your question. Okay, thank you. Thank you, all the leaders. Thank you so much for your answers. Now, Mr. Wang, do you have some more questions? No more. Thank you. Thank you. Okay. Thank you so much for the answers from the leadership. And now we will have this word question. The first one is congratulate you on all this disclosed, like this second one only next to Shenhua. So for this dividend, the information is actually closely related to this stock one. The China Coal for this liability sheet is all, like, being very good. So we have about this debt has lowered to about $18 billion. So for Shenhuang, Sanmei, and Yanquang. So for the dividends are all like being maintained at 60%. So I think if we could improve this dividend ratio, you could actually have better evaluation for our stock price. So do you have this kind of consideration to follow suit? So welcome all the leaders for your questions. And thank you so much. Because for this first We will definitely have this very good consideration. We will take it seriously. So for the dividend issuance, we have the benchmark like Mr. Chai has also mentioned. We also are like having some constitutional parts of a different cash flow we have. So currently speaking, I think we will not have this very big change of that. And therefore, this annual... We will have like a yearly dividend plan for 2023 for this kind of situation. We will wait until next year's March for this annual report when it is released. We will have that. Okay, thank you. Thank you so much. We will just disclose that next year with this next annual report. So next question from this online is for this. the different coal industry for this income. So that they mean like for the different distributions of the different areas of Chinese assets, it will all be offsetted. So indeed, for this income of this chemical coal, and when we consolidated, yes, it has been offsetted. So we can also see for the CN, it's about... 4.832 billion. So for this coal and coal chemical, they have been offsetted. For the rest, yes, it's between them. And the other part is about this construction, about this coal plant establishment, you have about 1.7 billion. Okay, got it. Thank you so much for the questions and answer. So the next question is, We have already seen that you are doing this thermal electricity bidding and tendering. So how do you consider about this integrated of coal electricity, the thermal electricity for the listed company? How do you plan to have this thermal coal electricity project? So we can also see that as he has said, for this group of thermal integrated tendering and the bidding, and we also have like several different considerations. and then they concentrated on this cooperation within our own group. So we also have already seen that for this sales team, for this thermal electricity, for this area of the business, it's not like our major business. Maybe in the future we will consider some other like partners, cooperating, with some other organizations to see the final situation of this implementation and this prerequisite of this implementation and investment to comprehensively consider this future development based on all the things we have. Okay, thank you so much for your answer. The next question is, with the calculation, we could have this two Qs sales price is about $520 million. So for Q1 is about 576, because for this thermal cost, 80% are all about long-term price. However, this is with very big fluctuation. Can you tell me, like, when you have this significant decrease of the price of this thermal cost, why is that? Can you tell me why is that? Because 80% of that is coming from this long-term agreement price. So why is it having this such big decline of the price?

We've already got the question, but we are discussing who to answer that.

Let's see that whether investors want to speak directly to our managers. So if you want to propose a question, so for all those telephone participants, please first press star. And then for online participants, you can directly press that and then to tap the word. And then you can also like have another speech. Question directly made by you if you raise your hand one. Okay, so now let's see whether you could directly answer the question or you would first connect to this telephone.