China Coal Energy Company Limited

Hello, everyone. Thank you very much for coming to the interim meeting of the – so now let me give you a disclaimer. We are going to present to the investors, and please take precaution, and there will be a Q&A session after this meeting. Thank you. Distinguished investors and analysts, good afternoon, everyone. My name is John Chin, Secretary of the Board of Directors of China Coal. Welcome to this briefing, and sincerely, thank you for your long-term care and support for the company. Now, I would like to talk to you about China Coal's performance in first half 2024, the completion of key tasks, and the main work arrangements for the second half of the year. The following figures I'm going to quote are calculated in accordance with the Chinese business accounting standard announced unless otherwise stated. In the first half, China Coal resolutely implemented the decisions by the CPC Central Committee and the State Council, focused on high-quality development, practiced the philosophy of efficiency improvement for existing business and transition for new business, and steadily pushed forward our operations. According to Chinese Business Accounting Standard, operating revenue was 92.98 RMB billion down by 15% year-over-year. Operating cost was 68.79 billion RMB down by 16.7% year-over-year. Overall selling price of self-produced commercial coal was 584 R&B per ton down 6.4%. The unit cost of self-produced commercial coal was 292.9 per ton. R&B 2.7% up. And total profit was 16.72 billion R&B down 17%. Net profit attributable to this coal shareholders was R&B 9.79 billion R&B down 17.3% year-over-year. Basic earnings per share was 74 cents down, 16.9% year-over-year. According to IFRS, revenue was 92.98 billion RMB, a year-over-year decrease of 15%. TOX was 71.63 billion RMB, a year-over-year decrease of 16.1%. The unit cost of self-produced commercial coal was 332.3 per ton, a year-over-year increase of 2.4%. pre-tax profit was 17.98 billion RMB, yielding a decrease of 15.1%, and profit attributable to shareholders was 10.7 billion RMB. year-over-year decrease of 16%. Basic earnings per share was 81 cents, down 15.6% year-over-year. We scientifically organized the production and sales and orderly unlocked advanced coal production capacity. In the first half of the year, the company continued to unlock high-quality production capacity, increased the supply of high-quality coal, and ensured the supply of coal energy. We leveraged the increasing capacity of high-quality capacity mines, such as Dahai Ze, Coal Mine and the East Open Pit Coal Mine while maintained and strengthened the production succession of other mines in an effort to stabilize output. ROC coal productivity was 34.7 tons per worker, which is leading in the industry. As of the end of the track record period, the company had cumulatively had 13 coal mines pass the intelligent acceptance and has built 66 intelligent coal mining phases and 43 intelligent tunneling phases. and coal mine safety and security and high efficiency production capacity continue to improve. In the first half, the company completed the production of 66.5 million tons of commercial coal, basically flat year-over-year. In the first half, the company thoroughly implemented the national decision to secure energy supply, strengthened production and the sales synergies, enhanced the management of medium and long-term contracts for thermal coal, and made every effort to maintain supply and stabilize prices. The company stepped up its business development, actively adjusted marketing strategy, optimized resource flow and investments, accurately understood market trends to effectively respond to the downward pressure of the market and stabilized and increased sales. In the first half of the year, the sale of commercial coal was 133 million tons, a year-over-year decrease of 8.9%. The sales of self-produced commercial coal was 66.19 million tons, a year-over-year increase of 2.1%. In terms of our Coal Chemicals business, we achieved safe, stable, long-term air capacity and optimal. We had the output of main coal chemicals was 2.927 million tons, a year-over-year decrease of 2.5%. And the sales of main major coal chemicals was 3 million tons, down 4% year-over-year. We strengthened link management and took multiple measures to optimize costs. In the first half, the company incurred operating costs of 68.79 billion yuan, a year-over-year decrease of 13.8 billion yuan, down 16.7%. And each enterprise continues to strengthen production and operating management, self-reduced commercial coal unit cost of sales with 292 yuan per ton, an increase of 7.71 yuan per ton, but 14.13 yuan per ton less than the average level of 2023 parts. A polyolefin unit cost of sales was 5,866 yuan per ton, a year-over-year decrease of 218 yuan per ton. The company continued to optimize its debt structure. Total interest paying debt was 69.15 billion yuan, a net decrease of 3.55 billion yuan from the beginning of the year. Financial expenses decreased by 298 million RMB year-over-year. The overall cost of funds was 3.11%, down 14 basis points from the beginning of the year. We strengthened marketing management and the prices of our main products tracked the main market fluctuations. In the first half of the year, the average selling price of self-produced commercial coal was 584 RMB per ton, a year-over-year decrease of 40 RMB per ton and 6.4% negative. The sales price of the thermal coal was 511 RMB per ton, a year-over-year decrease of 37 RMB per ton, or 6.8% down. The sales price of coking coal was 1,371 per ton, a year-over-year decrease of 41 RMB per ton, down by 2.9%. And the sales price of proprietary coal trading was 603 RMB per ton, a year-over-year decrease of 89 RMB per ton, down 12.9%. Polyphenol sales price was 6,955 per ton, increased by 52 RMB per ton and up by 0.8% year-over-year. The polyethylene sales price was 7,287 RMB per ton, an increase of 131 RMB per ton, up 1.8%. The polypropylene sales price was 6,600 RMB per ton. Year-over-year decrease of 40 RMB per ton, 0.6%. Urea sales price was 2,167 RMB per ton. Year-over-year decrease of 317 RMB per ton, down 12.8%. Methanol sales, 1,773 RMB per ton. R&B per ton, an increase of 3 R&B per ton up 0.2% year-over-year. Ammonium nitrate sales price was 2,178 per ton, a year-over-year decrease of 236 R&B per ton down 9.8%. Now let's talk about the profit drivers. The main coal chemical enterprises increased profit by 553 million yuan. Increasing sales of self-produced commercial coal brought 462 million yuan in profits. Financial costs decreased by 298 million yuan. The financial business brought in 88 million yuan of profits. Our finance company realized the profits of 709 million yuan. an increase of 88 million yuan a year thanks to shrewd fund management. The major reducing factors are self-reduced commercial coal prices fell by 2.66 billion yuan Investment income decreased by 767 million yuan. The increase in unit cost of sales of self-produced commercial coal reduced profits by 677 million yuan. The provision of asset impairment grew by 248 million yuan. The power generation and heating business reduced profits by 193 million yuan. The admin expenses grew by 179 million yuan. And in 2024, our main capex was 16 billion yuan, 5.3 billion was spent so far. We have the anti-bow project is about to deliver dual commissioning. The construction of the 100 megawatts agricultural photo PV complementary project in Pingshua and the subsequent 260 megawatt PV project is accelerating. The 2 times 660 megawatts integrated coal power project is being promoted with high quality. So actually using coal chemical phase two is under construction and took 100,000 ton liquid sunshine demonstration project is being implemented at a faster pace. Phase one of Shanghai energy, new energy demonstration pace base. A 263 megawatts project has been put into operation and achieved sound economics. And phase two has entered the accelerated construction phase. The construction of a China coal Huajing Li Bi mine with an annual capacity of 4 million tons of anther site is going smoothly. It is scheduled to put into production next year. And now let me talk to you about the dividend payouts. The company's cash dividend so far has totaled more than 30 billion RMB. The company started distributing cash dividends of RMB 5,860,214,700 RMB. And the company also distributed special dividend of 1.5 billion RMB to shareholders, amounting to $1,174,000. .3 cents per share and the formation dividends are expected to be fully paid out by August 26, 2024. And the special dividends will also be paid out by October 2024. Now, let me talk to you about the second half plan. We will deeply study and publicize and implement the spirit of the third plenary session of the 20th century committee of the party. We will be focusing on high quality development. First, we will focus on the requirements of deepening reform and upgrading. continue to enhance core functions and competitiveness, resolutely accomplish the tasks of reform deepening and upgrading, especially the latest reform tasks proposed by the third plenary session. Second, we will focus on the goal of building a world-class energy enterprise, accelerate the construction of key projects in the development plan, enhance the ability of energy supply and accelerate our green and low carbon transition. Third, we will adhere to the world-class standards, deepen the quality and efficiency improvement, strengthen lean management, and completely the annual production goals. Fourth, we will continue to improve our R&D and accelerate the development of new quality productivity. Five, we will continue to improve the internal control management system and the risk prevention control system to address risk and achieve safety environment production, energy conservation, and emission reduction. Lastly, we will enhance information disclosure, strengthen investor communications, and maintain a positive image in the capital market. We will continue to work on returning the maximum returns to the shareholders and investors. Thank you so much for everyone. So that included my presentation. Let's see if you have any questions.

We're more than happy to answer your questions.

Thank you very much for sharing. Now let's go into the Q&A session. So for those of you who are dialing on phone, please press star, then the number one. If you joined online, then you can use the raise hand function or the chat function of the online portal. Again, if you have a question on the phone, you can press star then the number one. For the web participants, you can use the chat room or use the raise hand function. Phone number ending in 0600. Please go ahead and introduce yourself and your affiliation. Hello. I'm from Kaia Securities. Thank you very much, Mr. Jiang, for your presentation. I have a few questions for you. Firstly, regarding dividend payouts, we saw that starting May this year, there was a special dividend payout. And we can feel that you are giving back more to the small and medium shareholders. And this time around, it's 30%. of total profit. So for the whole year, it's about 15% of the total profit, which is the dividend amount. So there will be another less than 30% dividend payout, right? So for your annual payout, could it be, so for the whole year, could it be about 45% of the profit for the dividends? Will you continue to increase the proportion of the dividends, or do you have such plans? Because in the industry, for some companies, they have promised no less than 60% of the profits for the dividends. What's your take on that, and do you have any plans? Thank you very much for your question.