China Coal Energy Company Limited

Hello everyone. Welcome to China Coal Energy first quarter results announcement. Welcome to all participants. The meeting begins now. After the presentation, there will be a Q&A session. Now please join me to work on the management. Thank you. Dear investors and analysts, good afternoon. I am Jiang Qin, board secretary of China Coal Energy. Welcome to our results presentation. Attending today's meetings are Deputy Secretary of the Party Committee, Executive Director and President, Mr. Gao Shigang, Mr. Jingfeng Ru, Independent and Executive Director, Mr. Chai Chiaoling, Chief Financial Officer, as well as the head and staff from the Securities Affairs Department, Planning and Development Department, Corporate Finance Department, Coal Business Department and Chemical Business Department, Power Business Department and Marketing Management Office. We sincerely thank you all for your long-term care and support for the company. Now, I will brief you on China Coal Energy's operating results for the first quarter in the 26th and the main work arrangements for the second quarter. Unless otherwise specified, the following data are calculated on the Chinese accounting standards. In Q1, the company resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council, deeply pursued the development philosophy of improving efficiency from existing assets and transforming through incremental growth, and fully advanced the various measures to stabilize production and sales. This by challenging such a change in geological conditions in some mines, we strengthen production sales coordination, enhance refined management, ensuring smooth and stable operations. Under Chinese accounting standards, the company achieved operating revenue of $34,189 million, total profit of $5,641 million, net profit attributable to shareholders of $3,844 million, and basic earnings per share is 0.29%. The main features of the company's operation and production Q1 are as follows. Firstly, with the full efforts to stabilize production and sales with scientific approach. The company worked hard to overcome challenges such as changing geological conditions and increased difficulty in production, achieving commercial coal production of 30.17 million tonnes, a decrease of 3.18 million tonnes year-on-year. We stepped up efforts to stabilize sales and ensure supply, with commercial coal sales of 36.02 million tonnes, of which self-produced commercial coal sales were 33. 29.7 million tons, down 2.98 million tons year-on-year. For the coal chemical business, we coordinate say production and plant operation, completing output of major coal chemical products of 1.554 million tons, including 373,000 tons of polyolefins, 537,000 tons of urea, and 524,000 tons of methanol, roughly flat year-on-year. Sales volume was 1.703 million tons, up 4.8% year-on-year. 2. Tipling Quality Improvement and Cost Initiative The company dynamically optimised production and cost control for logistics and sales. Unit selling cost of self-operated commercial coal was 278.76 tonne, up 3.3% year-on-year, mainly due to higher labour costs from converting outsourced production teams to in-house operations with higher social security. A lower production sales volume led to higher unit material costs and depreciation and amortization costs. Other costs decreased year-on-year due to increased conversion of outsourcing to in-house operation and reduced outsourced stripping volume in open pit mines. Benefiting from lower purchase prices of feed coal and fuel coal, the coal chemical business saw unit selling cost of polyolefins at $5,545 per tonne, down 4%, urea unit selling cost at $1,318 per tonne, down 1.8%, methanol unit selling cost at $1,354 per tonne, down 4.2%, major product prices stabilized with coal prices up slightly young year, The company's comprehensive selling price of self-produced commercial coal was 496 ton, up by 4 RMB per ton year-on-year. Among that, thermal coal price was 465 per ton, up 11 per ton, and cooking coal price was 991 per ton, up by 69 per ton. Coal chemical products prices continue to show diverging trends. Although polyolefin prices rose in March, the average selling price of polyolefins in January to March was 6,274 per tonne, down 8.8% year-on-year due to a significant decline in January to February. Urea price was 1,793 per tonne, up 5.3%. Ammonium nitrate price was 1,813 per tonne, down 2.6%. Fourth, Resilient operating performance and continued optimization of financial structure. Against a backdrop of lower coal production and rigid cost increases, the company adopted multiple measures to offset cost pressures and achieve the total profit of $5,641 million. Down 9.2%. Key factors include profit increasing factors including an increase in investment income of $169 million, a profit increase of $158 million from the power business, and a profit increase of $119 million from higher coal prices, and a profit increase of $108 million from reduced taxes and surcharges. Profit reducing factors included a profit decrease of 661 million from lower self-produced commercial coal sales volume, a profit decrease of 254 million from higher unit selling cost of self-produced commercial coal, a profit decrease of 67 million from financial business, a profit decrease of 52 million from coal chemical business, and a profit decrease of 31 million from higher period expenses. The company continues to strengthen link management and maintain good levels of ROE, overall labor productivity, and operating cash-to-sales ratio. Second, key work arrangement for Q2. Since the beginning of this year, China's macro policies have been coordinated and intensified. Major project construction has accelerated. Investment growth has turned positive. The domestic demand market has steadily recovered. Export growth has exceeded expectations, and positive factors in economic cooperation have continued to increase. Q2 is a critical transitional period. The company will further strengthen production organization, refine measures to tap potential, and increase efficiency, ensure that all operating indicators achieve all the milestone targets. Firstly, we will continue to strengthen production sales coordination to go all out to promote output and quality. Second, deepen lead management and cost control, tapping the potential for cost reduction. Thirdly, steadily advance key project construction, accelerate implementation and effectiveness of the two integrations. Fourthly, continuously improve corporate governance and information disclosure quality, deepen communication with investors, and maintain good image in the capital market. Going forward, the company would adhere to the bottom line of safe development and unswervingly pursue high-quality development. Thank you all. Now we're opening the floor for questions. Hello, everyone. For attendees, if you wanted to raise questions, please press the asterisk key on the phone and then press number one. And for attendees joining us online, please click the raise the hand button. Again, if you need to ask questions and joining through phone call, please press the asterisk key on the phone pad and then press number one. Now, investors with the tail number 9692, please don't forget to Share us your name and institution. Okay. Tank Coal Management. I am Song Chu, an analyst from Changsha Securities. I have two questions. Firstly, in Q1, for the thermal mines and also for the cooking coal, prices have increased. So what is the reason behind that? And what is the continuity of that? for these two products. Is it going to be consistent? Okay. We'll try to address the answers one by one. We'll ask Mr. Li from our marketing office to address these two questions. Thank you for your question. In 2026, China Co-Group and also China Coal Energy. Our overall sales structure and marketing system remains consistent with 2025. But the pricing has registered some changes. So from January to March, the price has increased from less than 700 to 780. And by the end of March, I think it's around 750. And the long-term agreement prices is about 8 RMB lower than Q1 last year. And for the stock market price, last year it was a turning down, but this year it is a turning up. So the spot market price is like a 13 RMB higher than same period last year. And in 2026, there were some changes in the sales structure in terms of the launching agreement sales and also the product structure, the product mix has also changed. So because we have a lower sales proportion from our launching agreements and also the launching agreement pricing, is different from last year by the difference of 8 RMB and for the small market the price is 13 RMB higher so that's why the overall pricing is better and also in the 2026 again because of the lower launching agreements volume and higher small market pricing normally in a Q1 the market was not very good and the price Coal Chemicals Single Corridor The quarterly pricing has turned down, but for methanol and also for polyolefins, actually the overall prices have increased a lot. So what's your take on the magnitude of profitability increase for March? So any guidance on the profitability? Profitability Improvement and also are there any guidance for the annual profitability improvement for the chemicals? Can you help us to break it down? Sorry, let me repeat your question. You mean that our expectations of the profitability generated by the coal chemical business, is that the question? Yes, I mean like a quarter-on-quarter basis, how much will it be improved? Okay, let me address this question. So, In the previous presentation, it's been mentioned that in March, the coal chemical price has come down, mostly because the coal chemical price was at a low level from January to February. But for well-known reasons, in March, the coal chemical price has increased because of the new market landscape. So that's why the company's coal chemical product prices have increased. However, in average, the overall pricing from January to March was not as high as expected. And later on, I could ask the finance people to break down the possibility for the coal chemicals for Q1 and also for March. And regarding the future outlook, especially from Coal Energy Company Limited Coal Energy Company Limited And regarding how the cochemical price would trend, I could also ask a colleague from marketing office to share more about it. Okay, so I would ask our colleague from the marketing office to share his views about the pricing trend for cochemical. Okay, thank you for the question. In the 2025 annual results announcement, we have made some comments regarding the supply and demand landscape and dynamics in 26. The overall impression is that the supply and demand for coal chemical in China, there's oversupply. and also the energy pricing would have a short-lived impact or unsustainable impact on the coal chemical business. So there are different opinions regarding international conflict. Some say that it would end within three months. Some say within six months. Some say that will go beyond six months. So all of these will affect the crude oil price. So if the conflict will last for over three months and the crude oil price maintain like over 80, then that means the energy pricing system would be relatively strong and that will also affect them. The demand for the coal chemical products. So from March to April, the coal chemical pricing has increased by up to 40%. And this week, it has gone down by a few hundred. So down by 3% to 5%, which is aligned with market expectation.

That is why we... Expect the pricing to be kept at an elevated level. That's the trend Having said that we do not expect a high pricing level to be sustained for very long so higher Pricing it's a trend, but it won't be extremely high and About the profit margin for the coal chemical business in March, I will give the floor to Ms. Xu. Total margin is about 300 million RMB for coal chemical, for urea, polyolefin, each accounting for 100 million RMB. You're telling me the gross margin, is that correct? Okay, thank you. Well, so much for my questions. I wish China coal to achieve even better performance. The participants with the phone number ending in 0600, please name yourself and your institution. Thank you. Can you hear us? Please raise your question, thank you. Okay. While we're waiting for this participant, let's skip the floor to another one. The investor with a phone number ending in 9808, please name yourself. Thank you for this opportunity. First, I want to say congratulations to China Coal Energy for your excellent performance. I have two questions. So it's more of a follow-up question. Previously, you've said that in Q1, in our thermal coal and You had higher sales in the more premium variety. And in the annual report, if I remember correctly, in 2025, your calorific value in 2025 is up by 200. And in Q1, the thermal coal's pricing in general is going down. So do you expect even more improvement in your quality of coal or high calorific coal? Do you give it higher weight? Do you expect that to happen? Question number two. Since we have the coal chemical business, and many other players, they also do this, and they need to have some maintenance and repair sessions. And for now, the margin of coal chemical business is buoyant. And In the coming quarters, do you expect some maintenance or impairing sessions that could drag down the scheduling and manufacturing for some products?

That's my question.