China Coal Energy Company Limited

Under Chinese accounting standards, H1 operating revenue was CNY 73.13 billion; profit was CNY 12.46 billion, up 4.4% YoY; net profit attributable to shareholders was CNY 8.14 billion, up 5.8%; and basic EPS was CNY 0.61, up CNY 0.2. Operating cash flow was CNY 9.86 billion, up CNY 2.19 billion, or 28.6% YoY. Under IFRS, revenue was CNY 73.13 billion; profit before tax was CNY 12.42 billion, up 7.1%; profit attributable to shareholders was CNY 8.19 billion, up 11.8%; and basic EPS was CNY 0.62, up 12.7%. Management said H2 chemicals volume growth will be limited, with the main incremental contribution from Yulin Phase 2, which is expected to enter start-up in November and begin output in December, while the full 900,000-tonne polyolefin capacity contribution is expected next year. The company also reiterated its interim dividend of CNY 2.44 billion, or CNY 0.184 per share.

Management framed the first half as resilient operating performance amid lower coal output, tighter safety inspection, and more difficult mine geology. The tone was confident but measured: the company said it will stick to the annual production plan, improve quality and efficiency, and keep pushing its coal-power-chemical-new energy integrated strategy. It also highlighted a long-term push into key projects, including Yulin Phase 2, Ejin Horo, and renewable energy investments.

The CFO emphasized that higher costs were largely driven by lower production, higher depreciation/amortization, labor restructuring, and increased dedicated fund spending. Self-produced commercial coal unit sales cost rose to CNY 285.69/tonne, up CNY 22.72/tonne or 8.6%, while polyolefin unit sales cost fell to CNY 5,674/tonne, down CNY 757/tonne or 11.8% due to last year’s maintenance comparison. He also said H2 costs are controllable, but did not promise that full-year costs must be flat or lower than last year because profitability takes priority. On taxes, management said the first-half tax work was basically completed, though additional items could still emerge depending on state tax authority requirements.

Analysts focused on three main issues: the impact of tighter coal safety inspections on production, the first-half tax and late-fee charges, and the outlook for chemicals and new projects. Management said the industry-wide Shanxi incident tightened oversight and reduced production, while China Coal’s own H1 production was down 8% year over year to 61.95 million tonnes; it hopes to catch up in H2, but said final results depend on execution under the stricter safety regime. On taxes, management said the higher nonoperating expenses and taxes/surcharges reflected special tax work and differences between prior practice and current tax bureau requirements. For chemicals, management said H2 growth is limited, but the new Yulin Phase 2 project should improve product differentiation and profitability, with next year benefiting from added polyolefin capacity.