China Coal Energy Company Limited

to debriefing on the company's performance of the first quarter of 2024. I sincerely thank you for your long-term concern, support, and care of China Coal Energy. And the presidents at today's meeting are Mr. Zhao Longzhe, the Executive Director and President of the company, Mr. Zhang Chenjie, Independent Executive Director, and Mr. Chai Xiaolin, the Chief Financial Officer, as well as reasonable persons and of the Company Securities Affairs Department, Planning and Department Department, Finance Department, and Coal Department, Coal Chemical Department, and Electric Power and New Energy Division, and the Marketing Office. Now, I would like to introduce you with the company's performance of Q1 2024. Unless otherwise specified, the following data are calculated according to China County Centers for Business Enterprises. Overview of first quarter performance. In the first quarter, faced with a market situation of the weak supply and demand of the coal and coal chemical products and a downward price fluctuation, the company scientifically organized production and the sales strength and the sales measurement to improve the quality and efficiency in depth and achieve the smooth starting production operations. The main production and operation data, the coal production and sales volume due to factors such as increase in the time for enterprise to stop production and overhaul during the Chinese New Year compared to last year, geological reasons, and gradual tightening of the low government supervision, the company's commercial coal output was 32.73 million tons, down 570,000 tons year-on-year, down 1.7%. The sales volume of commercial coal was 3.87 million tons a year-on-year, decrease of 10.9 million tons, or 14.6% among them. The sales volume of self-produced coal was 32.31 million tons, down 0.8% year-on-year. The sales volume of buyout trade coal was 29.73 million tons, down 24.4% year-on-year. The sales volume of agent Coal was 1.83 million tons, down 36.7 year-on-year. The selling price of coal products, the average selling price of self-produced commercial coal is 598 yuan per ton, a year-on-year decrease of 73 yuan ton by 10.9%. The average selling price of bio-trade coal was 611 yuan per ton, a year-on-year decrease of 124 yuan ton, down 16.9%. The cost of the coal products in the first quarter, the company's analytics organized the production strength and production continually, intensified the reform of income distribution, and continuously improved the salary level of the first line production team. And the unit sales cost of the company's self-produced commercial coal was $290.97 per ton increase of 18.42 yen per ton increase of 6.8% compared with the unit sales cost of self-produced commercial coal in 2023. It is 307 yen per ton decrease of 16.03 yen per ton. The main reasons are as follows. And the first, the company strength and production continuity and the self-operated scraping amount of open pit mines and self-operated deriving footage of the wells and the mines increased year-on-year, which increased material cost and labor cost per ton of coal. Secondly, the year-on-year decrease in the expense to use the company's special funds and the decrease in the production-related ceramic mining expenditures and have increased other costs, such as the balance cost of special funds for a ton of coal. Production and sales volume of major coal chemical products polyolefin production was 392,000 tons, up 3.7% year-on-year. Sales volume was 373,000 tons, up 2.0% year-on-year. Urea output was 475,000 tons, down 0.8% year-on-year. The sales volume was 551,000 tons, down 14.6% year-on-year. Methanol output was 412,000 tons, down 17.4% year-on-year. The sales volume was 396 tons, The output of ammonium nitride was 130,000 tons. And the price of the maple chemical products, the sales price of polyphene is 6,849.48 yuan per ton, down 208 yuan per ton. down 2.9%. The sales price of urea was 2,233 yuan per ton, a year-on-year decrease of 181 yuan per ton, down 17.7%. The sales price of methanol was 1,675 yuan per ton, a year-on-year decrease of 157 yuan per ton, down 8.6%. And I'm going to share with you about the cost of the main chemical products. The union sales cost of self-produced cochemical products decreased a year-on-year, and due to the decreasing purchase price of the raw coal, fuel coal, and raw methanol. And the unit sales cost of polling products was 5,899 yuan per town, a year-on-year decrease of 363 yuan per town, down 5.8%. Unit sale price of URI was 1,561 yuan per town, a year-on-year decrease of 276 yuan per town, a decrease of 15%. Unique sales cost of Magna was 1,741 yuan per ton year-on-year, a decrease of 389 yuan per ton, down 18.3%. The unique sales price of ammonium nitride is 1,515 yuan per ton, up 261 yuan per ton year-on-year, up 20.8%. And Equipment Business, the output value of coal mine equipment was 2.9 billion yuan, down 44.9% year-on-year. The Financial Business Financial Company graphed windows, scientifically managed lean funds, created efficacy, and increased profits by 278 million yuan, an increase of 77 million ton over the same period of last year. And the main financial indicators, in the first quarter, the company achieved an operating income of 45.4 billion yuan, down 23.3% a year, an increase of 8.64 billion yuan from the fourth quarter of 2023. The total profit was 8.7 billion yuan, up 3.55 billion yuan from the fourth quarter of 2023. And the net profit attributable to the shareholders of listed companies was 5 billion yuan. The basic earnings per share was 0.3%, a year-to-year decrease of 31.5%. The main profit increase and decrease factors, the profit increase factors are, firstly, the tax and the surcharge decreased by 191 million yuan, mainly affected by the decrease in sales volume, self-produced coal, and decrease in the first sales price. and the major coal chemical enterprises increased their profits by 139 million yuan, mainly affected by the decline in purchasing prices of the raw coal, fuel coal, and the dry methanol. The financial expenses increased by 90 million yuan, mainly affected by the company's continuous optimization of the data structure And number four, the financial business increased its profit by 77 million yuan, mainly in the first quarter. Financial companies rushed the window, scientifically managed the lean funds, created efficiency, and increased profits. And the profit reduction factors, The price of self-produced commercial coal decreased by 2.369 billion yuan, mainly affected by changes in the coal price. Industrial income decreased by 140 million yuan. Coal and coal chemical enterprises mainly participating in the stock market suffered a significant point of profit due to falling prices. the union sale cost of self-produced commercial coal increased and the profit decreased by 5,000,000 yuan. The main reason is that the company scientifically organized production. And number four, the profit of power generation and the heating business decreased by 171,000,000 yuan. It is mainly the education and mediation and the maintenance of the power plant units and the maintenance of DC lines and affect the power generation. And second, I'm going to share with you about the sentiment quarter of the key work arrangement. The company should strengthen confidence, work hard, continue to maintain a stable situation, save production, focus on improving production and marketing capabilities, and effectively strengthen cost control to ensure the main business indicators in the first half of the year are successfully achieved, laying a solid foundation for completing the annual business objectives. So that's why we needed to firmly adhere to the safety bottom line to ensure the sustained and stable production. The effort to stabilize the production increases sales and increases efficiency to ensure the completion of budget targets. Number three, we are going to continue to reduce the cost and tap potential.

And then I also hope that we could work really hard And with all those continuous development to give the feedback to all the different shareholders, that's all for me. So now we will come to the QA session. I sincerely welcome you to propose more questions. Thank you. Thank you all the distinguished leaders. And now we would invite all the co-participated analysts to do the first round of the questions. So can you hear me? All the leaders? Yes. I am from Mingshan Securities, Chotan, and I would really like to thank all the management team and all the leaders. Thank you so much for this hard work. So for the overall business, it's very, very satisfying. And I also would like to ask several questions. The first one is about our productivity. I have already seen that for Q1, the entire productivity is the same like Q2. The same period last year, but for the single month for March, it is declining for Shanxi Province because of this stringent requirement about The regulation, so the overall reduction of the productivity in Shanxi has been noticed. I want to say that has it been influenced negatively by this safety supervision and regulation, and it's already been like one month after that. What is the current status quo of the productivity? So the second thing is for this Dahai Zhuo, and from this $17 million to $20 million, so how is the whole process being proceeded? and for all those ANCAS that collaborated, the situation hasn't been changed. What is the annual productivity? What is the overall look for that? Thank you. And then for the productivity, I will invite Mr. Li Zhaofeng from the coal department to answer you the question. So for Q1, we have gotten to this influence of this coal strategy and the co-regulation for this re-assumption of the work has already led to the overall negative influence, but for this March, for this safety supervision. And we have already got this certain influence. And for this safety risk is quite high. So from supervision perspective, regulatory perspective, and I think that we are doing quite a lot of work to try to compensate that. This is about the overall productivity. And then for Da Hai Zhe, from this $17 million to $20 million is basically being finished. And now with about this $20 million, we also have already got this overall development. We also have and all the two different mines have already got about 5 million tons. And now we are actively dealing with all the procedures and we are actively trying to deal with that. So that's all. So please carry on the questions. Okay, thank you, leaders. I also would like to propose the second question. It's about the Yulin for this deep processing phase. So what is the construction schedule and the schedule for production? Thank you. So for your question, you want to ask about this Yulin coal chemical phase two construction, right? So we will have this Coal Chemical Department, Mr. Chang, to answer that. So for Yulin, for Phase 2, and for the project, the overall construction period is about 30 months. So the overall investment is about 23.8 billion yuan. So the current project, has already finished the entire decision for investment. For the basic design and for the preparation work are still being done. So it includes like a basic design. And for WP, for the key devices have also been finished. And for all those high-end work has already been done. So that's all. Thank you. Okay, thank you. Thank you, the leader. That's all for me. Thank you. Okay. So for the rest of the participants from different security companies, do you have any questions? Hello. Hello. I'm Lin Gongsheng from Southwest Security. Thank you so much for the time to do this on-site sharing. I have a little question here. Can you hear me? Yes, I can. Please carry on. And I have a question. We can see for Q1, for this commercial coal, the cost is having a significant impact. increase. It's about 18.42 yuan. So the major reason, except for this reduction of the sales, is also because of this self-construction of all those developments and all the different subsidies for this team work. So I have a question that for the entire the increase of the amount, is this actually because of the reason of this mine or for this yearly process? What kind of guidance for that is about the cost? Okay, thank you. So I will invite another member of the leader to answer you that. So for Q1 last year, we are having this overall low cost for the last year for all the different aspects of the work. And for this year, it is having this negative influence of this overall high cost. And we are also doing the overall work. We also have already got like less production, so for the overall cost this year for Q1. We are also doing every aspect, every effort to control the cost. Okay, thank you. That's all for my answer. Okay, thank you. That's all. Okay, thank you. And I think we also have some other different participants online. Do you have any more questions? Hello. I'm from Guosheng Securities, Zhang Yiming. I would like to use this opportunity to ask a question about the future capital expenditure, the CapEx plan. because we all know that for our group, because we have already got this coal chemical and coal energy integrated operation, so maybe for us it's more shouldering the arrangement about this coal chemical, especially the arrangement of taking an example of Yulin Phase II. So maybe for coal chemical, how big is the capex and how do we balance the capex in chemical industry and about the payback of all the shareholders and about the dividends. So here I would like to say that for the investment in this coal chemical industry, and we can already see that this is also about this long schedule and the long period, and for the rest of the projects for the entire CAPEX, how big the size would be and how can we balance what for example, like the increase of this dividend. And there are two different questions. Let's first answer the question. It's about this coal chemical capex. And for our annual report, we have already disclosed it's about $16 billion. And it's about... 4.87 billion yuan, compared with 2023, the actual realization, we have a very big increase. It's mainly because for Yulin Phase 2 project, for this CAPEX. And so we also have this actual construction. So we have already got this entire investment level introduced by Mr. Chang. So in the future, this will mainly center on this ruling phase two to do this CAPEX about this coal chemical industry. This is about the first one. And of course, about this basic procedure, we will arrange that. one by one and about the dividend issuing. So for this annual report release, we have written down this explanation to all the investors. We will have our CFO about the dividend to do the further explanation to all of you, okay? So for the dividend, for this annual release, we have written down that for this company dividend is sticking to this stable operation of the company, generally speaking. We have already mentioned. For example, in the past few years, we have already been very generous sending out the dividends. And we also could further improve like for all the different ones. And then we also can say that for the past few years, we are still doing the dividend issuing We also have seen that for the whole process and for the entire development, this is about this high-quality feedback, high-quality payback. So generally speaking, we will maintain the dividends and maintain the stable operation. And with our further investment, to further guard in line with this basic level and then to have a better servicing of all our shareholders and investors. Okay, thank you. And I have another question. It is also proposed by the first investor, so for Pingshou Mine, and it's about the 19 million productivity It's about the overall capacity. So we are very looking forward and caring about the following of this Pingshou mine. And maybe it's about this Shanxi safety requirement for Pingshou for this future three to five years of this prospect. What is the prospect of that for Pingshou? We still have Mr. Li Shaofeng from this coal department of our Pingshou mine. And now we have like a quite a big arrangement for that, currently. For the overall 2023, prospectively I have already answered for the current capacity is about 30 million and then to be even reduced to 25 million because of this safety problem for this annual presentation. And we also expect that if this procedure could be done and we could also restore it to about one to two years, it will be recovered to this ordinary productivity level. And so it's about 10 million tons now for this overall scale productivity. is about 90 million tons. So now it's about this investors caring about this continuation of the resources. Currently, we have this, indeed, we are faced with this problem, but in the next five years, and the productivity could be maintained this very balanced and stable way, and after we're dealing with all the different procedures, the productivity will still have like a slight increase. This is the overall situation. Thank you. Okay. Thank you. Thank you. That's all. Okay. So thank you all the distinguished leaders. We will have a security to do the question proposing.

So thank you. I'm .