Earnings Call: H2 2025

Mar 27, 2026

Summary

Record coal output and higher chemical production contrasted with lower 2025 revenue and net income. 2026 plans emphasize cost reduction, CNY 19.8bn CapEx and expansion, while coal and chemical markets are expected to improve selectively.

We'll now invite our chairman to start the presentation. Ladies and gentlemen, new and old friends, good morning. On behalf of Yankuang Energy, I would like to extend a warm welcome to all investors and friends attending this meeting, and express my heartfelt gratitude for your long-term care and support for the group. In 2025, facing severe challenges such as a complex economic situation, the accelerated construction of a new energy system, and cyclical fluctuations in the coal industry, the group overcame difficulties and responded calmly. We persisted in increasing production and expanding output to consolidate foundation, implemented lean management to reduce costs and control expenses, and accelerated project construction to build momentum and powered efficiency through capital operation. As a result, the group achieved leapfrog growth in production capacity and resource reserves, firmly stabilizing our basic production and operation in a complex situation. Overall, we showed a good trend of steady improvement in operation and management and continuous enhancement of development potential. The following is a detailed report in four parts. One, our 2025 operations, then performance overview. According to International Financial Reporting Standards, the key operating indicators are as follows. Salable coal production reached 182 million tons, setting a new historical high. This was driven by the high yield and efficiency of the Shanxi Inner Mongolia base and the Australian base, as well as the acquisition of Xibei Mining, resulting in a net increase of 14 million tons compared to 2024. Chemical production reached 9.77 million tons, up 760,000 tons or 8.46% year-on-year. Three, sales revenue, CNY 133.34 billion, a decrease of CNY 7.8 billion year-on-year. Net income, CNY 8.52 billion, down CNY 6.07 billion year-on-year. Total assets, CNY 451.97 billion. Shareholders' equity, CNY 71.3 billion. Return on net assets, 11.96%. Six, cash balance at the end of the period was CNY 26.68 billion, which can fully guarantee the needs of subsequent project investment, shareholder returns, and CapEx. Seven, annual dividend declared of CNY 0.5 per share, CNY 0.5 per share. Adhering to the philosophy of shareholders first, value sharing. Following the interim dividend of CNY 0.18 per share, the company plans to implement a final dividend of CNY 0.32 per share, bringing the total dividend payout for the year to CNY 5.02 billion. Strengthening and optimizing five key industries, resulting in a steady improvement in development quality and efficiency. Our group actively integrates into the construction of the national modern industry system, with five major industries advancing in tandem and complementing each other's strengths, thus consolidating the industrial foundation for high-quality development. One, mining. Optimize layout, expand volume, and stabilize efficiency. The strategy of stabilizing production within the province, expanding production outside the province, optimizing overseas production was further implemented. Production at Shandong and Xinjiang bases remained stable, and the Wanfu Coal Mine reaching full capacity immediately upon commencement of production, and Wucaiwan No. 4 open-pit mine officially commenced trial operation. The Shaanxi Inner Mongolia base reached full production capacity and efficiency with marketable or salable coal output 46.66 million tons, up 3.54 million tons year-on-year, contributing 56% of profit and becoming the most crucial area for production growth and profit growth. M&A of Xibei Mining yielded significant results, contributing 33.81 million tons of salable coal output. Australian production base continued to optimize operation with marketable or salable coal production reaching 44.02 million tons, up 1.72 million tons year-on-year, setting a new record. Two, breakthroughs in key projects will remain steadfast in our established plans, accelerate implementation of landmark and leading major projects, and solidify foundation for continued development. Key projects in Inner Mongolia are being implemented at accelerated pace. The civil engineering work for the Youfanghao Coal Mine is basically complete. Liusangedan Coal Mine and Huolinhe No. 1 Coal Mine obtained mining licenses for annual production of 10 million tons and 7 million tons respectively. Galutu Coal Mine plans to increase annual production capacity to 8 million tons. Xinghe Molybdenum's Caosiyao Molybdenum Mine was issued an electronic mining license certificate for annual production scale of 16.5 million tons. Key projects in Shaanxi-Gansu region are progressing smoothly. Yangjiaping Coal Mine has commenced construction successfully. Mafuchuan Coal Mine and Maojiachuan Coal Mine have both obtained mining licenses and preliminary design approvals for annual output of 5 million tons. Three, scientific and technological innovation demonstration and leadership. The innovative and promoted dense filling new type of forward moving, fully mechanized mining method was included in the new edition of the coal mine safety regulations, opening up a new path for green and efficient mining. Intelligent construction accelerated with Pangu Mine large-scale model being applied in multiple scenarios and the Fuxi Chemical large-scale model being put into operation in several chemical enterprises. We successfully hosted the National Coal Mine Rockburst Prevention and Control Experience Exchange Conference and the 13th National Mine Rescue Skills Competition, setting industry benchmark in major disaster prevention and emergency rescue. Two, high-end chemical new materials industry. Simultaneous increase in quantity and efficiency, extension and completion of the industrial chain, stable production, high efficiency, and synergistic profit growth. We have formed a product matrix of more than 20 categories of coal chemical products, including methanol, acetic acid, ethylene glycol, polyoxymethylene, caprolactam, and coal to oil, with a total production capacity of over 11 million tons. We have high degree of industry influence and brand power and continue to lead the track of clean, low carbon and efficient utilization of coal. In 2025, the chemical sector will operate with stable, long-term, full capacity and high quality performance, with key projects increasing production and efficiency, achieving synergistic profits growth. Among these achievements, the sector will produce 4.54 million tons of methanol, over 1 million tons of high-end Fischer-Tropsch, wax and petroleum products. Xinjiang Xinzhen coal chemical will produce 2.15 billion cubic meters of natural gas, achieving the best performance since commissioning. High-end projects are being fully promoted. The Lunan Chemical low carbon and high efficiency energy conversion integration project was officially launched, including commencement of construction on the 1-million-ton per year methanol project, replacing small scale plants with larger ones, and environmental impact assessment approval for 400,000 ton per year octanol project. Rongxin Chemical's 800,000 ton per year olefin project is progressing smoothly with equipment installation and commissioning. Xinjiang Energy and Chemicals' 800,000 ton per year coal to olefin project has commenced construction. Future Energy's 500,000 ton per year high temperature Fischer-Tropsch project has made significant positive progress. High-end equipment manufacturing industry, resource complementarity and value leap. Adhering to the principle of high-end, intelligent, feature-rich and cluster development will form technological complementarity among our 110,000 units. A resource sharing and collaborative efficiency-creating equipment manufacturing system is being established to strengthen and optimize Europe's equipment manufacturing R&D base. TH Company's first domestically produced 10 turbine product successfully rolled off the production line. Shuofang Company's independently developed lithium battery monorail crane product successfully passed EU certification. High-end coal mining equipment such as complete frame batch, hydraulic support, belt conveyors, and lithium battery monorail cranes have effectively expanded domestic market and achieved breakthrough in overseas market exports, reaching 11 countries including Australia, Indonesia and Turkey. Luxi Smart Manufacturing Park achieved annual revenue exceeding CNY 2 billion, utilizing advanced technology such as intelligent welding robots and intelligent assembly lines, and establishing the industry's first lights-out intensive rewinding facility. Four, smart logistics industry, intensive and efficient expanding and upgrading. The integrated operation of railways, highways, ports and shipping, industrial parks and platforms has been fully established. The company self-operated and equity-participated railway operating mileage exceeded 1,000 kilometers, and 12 integrated logistic parks combining road, rail and motorways were built. Annual freight volume reached 310 million tons, an increase of 10 million tons year-on-year. Accelerate the development of a network layout that connects rivers and seas and facilitates global logistics. We have standardized operation of 10,000 ton trains with daily collection and distribution volume exceeding 100,000 tons. We are accelerating construction of a green zero carbon industrial park. Wubo Technology has achieved deep integration of physical logistics plus digital platform model. We have successfully expanded into international ocean shipping routes and is accelerating expansion into overseas markets such as Southeast Asia. Both Yankuang Logistics and Wubo Technology have been rated as national AAAA-level logistics enterprises. Five, new energy industry focusing on key challenges. Economic development zone promotes the integrated development of wind, solar and energy storage, and Wuhan promotes project construction and indicators. The Inner Mongolia Honda Industry 110,000 watt wind power project has been approved under acquisition model. The Fucheng 180-megawatt wind power project has commenced construction, and efforts are being actively promoted to advance the Rongxin Chemical 1.5-megawatt project, the Zuoping 105-megawatt wind power project, and the Tai'an Port PV storage integrator project. In response to the national two-pronged approach strategic deployment, we actively promoted virtual power generation projects such as the Jinan Power 220-kilovolt grid site independent energy storage power station and Zhaolou Power Plant's 350-megawatt ultra-supercritical cogeneration project. Three, lean management is being implemented in depth and operational resilience is being strengthened. Faced with challenging situation, we have focused on internal improvements and strengthened internal capabilities, controlling cost reduction potential throughout the entire process and expanding efficiency and profit points across the entire chain, using certainty of lean management to cope with the uncertainty of industry cycle fluctuations. One, deepen internal potential to reduce costs. We implemented in-depth cost control measures, including 10 enhancements, 10 efficiency improvements, and one cost reduction, and all major products exceeded their planned cost control targets, specifically the sales cost. The sales cost per ton of coal was RMB 321, a 7% decrease year-on-year. Chemical industry strengthened management, tapped potential to reduce consumption, and coupled with the impact of declining raw coal costs. The unit sales cost of methanol was CNY 1,239 per ton, a year-on-year decrease of 17%. Unit sales cost of acetic acid was CNY 1,819 per ton, down 15% year-on-year. The Wucaiwan project, focusing on cost reduction and control, achieving a total cost reduction and efficiency improvement of RMB 3.5 billion throughout the year. With structural cost reduction as the core, we deepen implementation of lean improvement and two-pronged reduction, resulting in 1.7% year-on-year decrease in material consumption per unit. Supported by management-based cost reduction, we strictly control production expenditure, saving RMB 320 million in controllable costs. We strengthen six fixed management of human resources, improving efficiency of our personnel by RMB 500 million. Leveraging advantages of synergistic cost reduction, we fully utilize synergistic advantages of the five major industries, optimize and revitalize existing assets, and dispose of idle materials and equipment worth 630 million. The disposal of coal production capacity indicators generated additional 1.07 billion in revenue, and chemistry industry generated RMB 350 million in synergistic benefits. Two, taking multiple measures to increase efficiency. Implement measures to increase profits such as flexible marketing, optimizing product mix, and strengthening quality improvement. Our coal of similar quality leads the surrounding market and price. Average price of our group's self-produced coal is CNY 513 per ton. Average price in the second half of the year was up CNY 11.5 per ton compared to first half. One, marketing and price increase to generate efficiency. Implement sales strategies such as competitive bidding and pre-deferred price reduction. Bidding generated CNY 45 million in revenue. Two, strategic contract fulfillment and market stabilization. We closely monitor coal market, dynamically optimize customer structure and shipment ratio, and strive to expand the market, improve efficiency, and stabilize sales. Sales to key strategic customers in Shandong Province and Shanxi in Inner Mongolia accounted for 80% and 91% respectively. Improve quality and efficiency of refined coal or clean coal. Deepen the implementation of Three Zeros project and strengthen coal quality management throughout the entire process. Through effective management, the company has won market trust with Yankuang coal brand and explored profit potential through refined coal efficiency improvement. Clean coal sales increased by 13.8% year-on-year, resulting in CNY 600 million in improved efficiency. Tax agreement for State-owned Assets Supervision and Administration Commission. Our supply chain focuses precisely on enterprise clients, continuously optimizing investment. Debt ratio fell to 62.2%. Optimized financing structure, average interest rate on loans was reduced by 2.46%, and interest expenses of the government, CNY 310 million. Strictly control expenditure, optimize investment estimates, strictly control unnecessary expenditures and exclude the Northwest. CapEx was reduced by CNY 860 million compared to the initial plan. Three, improve efficiency. Expedite accounts receivable collection and increase capital and inventory turnover. To reduce capital occupation by the end of 2025, available cash balance was CNY 26.68 billion. Cash flow is stable and monetary funds remain ample. Four, multiple breakthroughs in value creation to drive the company's steady and long-term development. One, maintain market value and share development. We have deepened the 135 market value management mechanism, closely adhere to the main theme of high-quality development, and implementing strategic measures in multiple dimensions, including value creation, standardized governance, efficient communication. As of March 27, our total market cap was RMB 179.5 billion, up 56.2% from the beginning of the year. Price to earnings ratio 10.7, price to book ratio 2.4, further highlighting our investment value. Market cap management has gained high recognition from capital market, winning the 45th place among China's top 100 listed companies, the best listed company by New Fortune, the most valuable Hong Kong stock for investment, and the model case of value for Chinese-listed companies. Balancing value enhancement and investor returns, the company ranked 24th on the 2025 cash dividend list and 13th on the 2025 dividend yield list of the China Association for Public Companies. We'll continue to adhere to the high-ratio cash dividend policy and have determined that cash dividends will be distributed at above 50% of net profit after deducting statutory reserves from 2026 to 2028. At the same time, we will promote a CNY 200 million-CNY 500 million A+H share repurchase plan and a CNY 100 million-CNY 200 million H share increase plan by controlling shareholder. Two, green and low-carbon energy saving, consumption reducing base. Adhering to ESG strategic policy of green and low carbon, compliance and transparent and sustainable development, we published ESG reports for 18 consecutive years. ESG rating by MSCI has been upgraded to triple B, the only highest rating in the coal industry. Practicing the concept that lucid waters and lush mountains are invaluable assets. We vigorously promote the construction of green mine, achieving 100% comprehensive utilization of mine water and coal gangue. The comprehensive energy consumption per unit of industrial output is 2.03 tons of standard coal per CNY 10,000, a leading level of energy efficiency in the industry. Part two, main product market analysis. Looking ahead to 2026, the world is undergoing profound changes unseen in a century, with geopolitical conflict leading to global energy supply shortages and a heavy international energy structure, driving the world's energy supply and consumption system towards a green, low carbon, safe, efficient, diversified, and complementary model. We will consistently focus on our core business and strengthen management, see structural opportunities through scientific adaptation, and gain competitive edge in industrial transformation. One, coal market. Supply and demand continue to optimize. Price center shifts upward. In 2025, domestic coal production reached a new high, while imported coal volume declined year-on-year. Overall, market supply and demand were relatively loose. Coal prices showed a fluctuation trend of first declining, then rising, and then falling again. The average price for the whole year continued to decline compared to 2024. Looking ahead to 2026, the domestic coal market supply and demand will shift from a relatively loose to a relatively balanced, albeit temporarily tighter situation, with price center moving upward compared to 2025. However, ample supply and high social inventory will somewhat constrain the extent of coal price increases. Driven by the energy security strategy, coal, as China's most reliable, controllable, and resilient core foundation, continues to strengthen its role in bottom line guarantee and system regulation within the new energy system, highlighting its strategic value and providing ample confidence for our country to solidify its energy self-sufficiency and security supply and to cope with changes in external environment. On the supply side, domestic coal supply is expected to remain stable, with production growth slowing. With the full implementation of anti-involution policies, the long-term nature of overcapacity verification, and the exit of illegally added capacity, compliant production, balanced supply, and optimized capacity structure have become clear directions. Imported coal prices continue to be lower than domestic prices, leading to tighter control imports and limited supplementary supply. On the demand side, China's economic work will adhere to the general principle of seeking progress while maintaining stability, implement more proactive and effective macroeconomic policies, increase counter-cyclical and cross-cyclical adjustments, and continue to see effects of measures such as reserve requirement ratio cuts and interest rate cuts, new infrastructure and major projects, and urban renewal to boost consumption and expand effective investment, which will strongly drive energy demand. In 2025, total electricity consumption will exceed 10 trillion kilowatts for the first time, with July and August exceeding 1 trillion kilowatt hours consecutively. In January and February this year, industry economic data will further improve, with thermal power generation increasing by 3.3% year-on-year, while growth rates of wind and solar renewable energy generation will slow down. The chemical market is gradually recovering, and coal demand is showing rigid growth. In the international market, escalating geopolitical conflicts have led to global energy security crisis, driving up international oil and gas prices. Demand for coal substitution continues to be released, and improved supply and demand situation has boosted international coal price. Limited coal production increases from major coal-producing countries, rising international shipping costs, uncertainty surrounding Indonesia's reinstatement of export tariffs and reductions in production quota, and anticipated decline in coal production from Australia and Russia have resulted in a tight international coal supply. International Energy Agency forecasts that global coal demand will remain high in 2026, while electricity demand will continue to grow rapidly. Demand for coal in India and Southeast Asia is expected to continue to increase, further strengthening price support. In 2025, the chemical industry as a whole will show a strong upward trend, mainly benefiting from a decline in raw material costs and year-on-year improvement in industry profitability. In the coal chemical market, cost advantage can expand, and there will be improved industry efficiency. Looking ahead to 2026, with international oil and gas prices remaining stable, cost advantages of current coal to oil, coal to chemicals, and other industrial routes will become increasingly apparent. Coupled with factors such as the expanded supply of chemical products from the Middle East and prices of coal, chemical products, both domestically and internationally, are expected to rise rapidly. On the supply side, the orderly withdrawal of outdated domestic production capacity and limited release of overseas production capacity have alleviated pressure of oversupply to some extent. On the demand side, manufacturing demand has improved, and the effects of consumption-stimulating policies are becoming apparent, leading to marginal recovery in the chemical industry's outlook. In terms of specific products, shortage is a temporary phenomenon for methanol and urea, driving annual price center upward. Given the current volatile energy situation and based on my country's characteristics of being rich in coal, poor in oil, and lacking in gas, with abundant resources, the modern coal chemical industry plays an important role in ensuring national energy security and self-sufficiency of basic industrial products. It also demonstrates significant economic value amidst sharp fluctuations in international energy prices, becoming an effective supplement to offset temporary shortage of energy and chemical products. For over 20 years, we have been deeply involved in the coal chemical industry, firmly adhering to the path of clean, low carbon, and efficient utilization of coal. This has enabled the group to deeply transform coal from a fuel to a raw material and then to a material, building a complete industrial chain advantage from traditional fuel to high-end materials. Leveraging outstanding coal chemical integration synergy, our group will fully benefit from the industry's recovery, providing strong support for sustained performance growth. Part three, business objectives and key measures for 2026. Currently, various favorable economic policies are being implemented at an accelerated pace, and market demand continues to recover, providing strong support for our group's performance growth. We'll fully seize the opportunity to strengthen our confidence, ride the momentum, enhance lean management to increase volume and reduce costs. Vigorously expand the market to stabilize expectations and increase efficiency, and take solid and effective measures to improve profitability. One, production plan. We'll promote tax reduction and two priorities. Carry out special campaigns such as improving current performance and creating excellence, strengthen production organization, upgrade equipment, and promote advanced technologies. Ensure that the current agricultural industry achieves effective quality improvement and reasonable quantitative growth. Chemical products, 9.5 million to 11 million tons, generally stable. We'll leverage synergistic effect of the coal and chemical industry from all directions, focusing on the operation of the two furnaces, controlling the power generation ratio and wave reduction and shutdown, optimizing flexible production of multiple production lines, and promoting stable and high-quality production, increased revenue and efficiency in chemical sector. Two, cost control. We'll firmly implement cost-driven strategy, integrate lean management throughout the entire production and operation process, and strive to reduce cost of sales per ton of coal by 3%, sales of cost by methanol down by CNY 30 per ton, and cost of acetic acid exit by CNY 30 per ton. The cost of sales decreased by CNY 30 per ton. Total cost reduction and efficiency improvement for the year exceeded CNY 1.5 billion. Lean production reduces material consumption per unit. Optimizing production continuity and workflow reduces material consumption per unit by more than 5%. We will implement rigid cost control. We'll maintain strict budget control to ensure controllable costs are reduced by more than CNY 300 million. Third, we'll optimize existing inventory through collaborative efforts. We'll increase centralized procurement and expand proportion of consignment and storage to ensure cost reduction of over CNY 250 million. We'll also promote inventory clearance and reuse to ensure 10% reduction in existing inventory. CapEx plan. Adhering to the principles of prioritizing efficiency and living within our means, the funds will be primarily invested in incremental and profit-generating projects such as capacity expansion, supply chain extension and supplementation, and equipment upgrade, with planned CapEx of CNY 19.8 billion. Asset liability ratio. The debt scale and asset liability ratio are managed and controlled in a dual manner under the premise of meeting expenditure of production and operation, cash dividend, and project investment. Asset liability ratio is maintained at around 62%. Part four, 15th Five-Year Plan outlook. Looking back at the 14th Five-Year Plan period, our group, with extraordinary wisdom and unwavering courage, deepened our presence at home, expanded beyond the province, and ventured overseas, winning the three major battles of achieving full production capacity and efficiency, increasing revenue and reducing expenses, and constructing projects. We also proactively planned the new eight major projects, delivering a high-quality development report card of steady progress and improved quality. Coal and chemical product output increased by 52% and 114% respectively, compared to the end of 13th Five-Year Plan. A cumulative total profit reached CNY 155.1 billion, with average annual net income of CNY 17.5 billion. Total assets increased by 65.6%. Core operating indicators steadily climbed, demonstrating resilience. Adhering to the principle of shareholder supremacy and value sharing, market cap increased by 348%. Cumulative dividends reached CNY 55.5 billion, setting an industry benchmark with tangible value returns. Currently, our country's 15th Five-Year Plan has been launched with great fanfare. The new energy security strategy is being fully promoted. Construction of new energy system is being accelerated. Coal industry is strengthening the clean and efficient utilization of fossil energy, improving coal price, range, control policies, and the construction of a coal reserve system, strengthening coal to oil and gas production capacity and technology reserves, and promoting the industry towards more standardized and sustainable development. Standing at a new starting point, our group will focus on the main theme of high-quality development, consolidate the foundation of stability by cultivating coal industries, stimulate the momentum of progress by fostering emerging industries, and enhance the efficiency of excellence by deepening capital operations. We'll create a new industrial system that integrates traditional energy and new energy and deeply integrate upstream and downstream industrial chains and accelerate construction of a world-class, sustainable, clean energy leading demonstration enterprise. One, deepen development of core industries and consolidate foundation of stability. Deeply integrate into the national energy strategic base layout, accurately plan and prioritize a number of high quality and efficient incremental projects, ensure that the release of high quality production capacity lays a solid foundation for profitability, and enhance the momentum for development through scale expansion. Continuously consolidate core competitive advantages and strive to add more than 70 million tons of high quality saleable coal production capacity with obvious location advantages, low disaster risk, reasonable coal type structure, and excellent resource endowment by the end of the 15th Five-Year Plan, with raw coal output exceeding 300 million tons. Two, expanding capacity and diversifying development to create a four plus one development pattern for the mining industry. Accelerate construction of four 80 million ton class hydropower stations in Inner Mongolia, Shanxi, Gansu, Xinjiang, and Australia. We are building a super large coal industry base and simultaneously expanding into diversified mineral resources such as non-ferrous metals, establishing a four plus one strategic development pattern for the mining industry, and consolidating the ballast for the company's high-quality development. In the Inner Mongolia base, focus on advancing the Youfanghao, Huolinhe No. 1, Liusangedan, and the planned mines such as Liufu are scheduled to be completed around 2027 to 2031. We'll accurately grasp the window of opportunity for relaxation of production restrictions on mines prone to rock bursts and promote the production expansion of Shilawusu Coal Mine and Yingpanhao Coal Mine in a timely manner. Shaanxi-Gansu base, focusing on tackling the construction of mines such as Yangjiaping, Mafuchuan, and Maojiachuan. Xinjiang base, ensure smooth achievement of 10 million tons of production capacity in phase one of the Wucaiwan No. 4 open-pit mine project, and focus on completing the procedures for increasing the capacity of phase two to 23 million tons per year. Australia base, continuously strengthen operations and management and actively seek high-quality resources and mature operating projects. Expanding non-ferrous metal mining. The Xinghe Molybdenum Industry Caosiyao Molybdenum Mine will be completed by 2028, becoming a significant profit growth driver for the group. Cooperative development of potash mines in Canada will be pursued when the opportunity arises. Promote transformation from single coal production to multi-mineral development. Two, taking full advantage of momentum, building high-end clusters, and creating leading enterprises in the coal chemical industry chain. Deeply integrating into the national strategic layout of the chemical industry, adhering to the direction of humanization, commercialization, low carbonization, and regional integration. We will promote industry towards resource concentration, high-end extension of the industrial chain, and green and low-carbon transformation, build a modern chemical industry cluster with reasonable layouts, complementary functions, and coordinated linkage, promote the coordinated and differentiated development of four major chemical bases of Shandong, Shanxi, Inner Mongolia, Xinjiang, and strive to achieve high-end chemical product ratio of over 70% by the end of the 15th Five-Year Plan period, and enter the forefront of the modern coal chemical industry. Shandong base. With two core industrial chains in Shandong, alcohol-based and amino-based, it leads the production of high-end fine chemicals such as acetic acid, polyoxymethylene, and caprolactam. It is accelerating construction of a 1 million ton methanol, 100,000 ton octanol, and 60,000 ton polyoxymethylene project. It is striving to build a leading domestic demonstration base for high-end fine chemicals and new materials. Shanxi base, focusing on high-end coal-based chemicals and clean oils. The base operates a 10,000 ton level coal to oil demonstration plant with high efficiency and stability, accelerates construction of a 500,000 ton high-temperature Fischer-Tropsch project, actively promotes the implementation of a 4 million ton coal to oil plant, and is committed to build a base for coal-based specialty oils and high-end chemicals. Inner Mongolia base, leveraging the demonstration effect of the coal methanol production area, steadily extending downward into the new materials field, completing a high-quality 800,000 ton per year olefin project, establishing a complete industrial chain from methanol to olefin to high-end new materials, and accelerating construction of a modern coal-based chemical new materials industrial base. Xinjiang base, deeply integrating coal and wind solar resources to explore integrated development of coal chemical plus new energy. Led by the 800,000 ton per year coal to olefin project, it promotes leap from basic raw materials to high-end new materials, efficiently operating the 2 billion cubic meter Xinjiang coal to natural gas project. It focuses on building a demonstration base for integrated coal chemical development. Two, cultivate and strengthen emerging industries to stimulate the momentum of progress, optimize industrial structure, and accelerate industrial upgrading, while consolidating core industries create diversified, intensified, and efficient modern industrial clusters to open up a second growth curve for a new round of high-quality development. High-end equipment manufacturing emphasizes specialization, refinement, innovation, and value enhancement. Anchored in the development direction of clustering, high-end, and internationalization, we focus on developing and manufacturing high value added, internationally competitive cutting-edge product, becoming a leading integrated service provider of heavy-duty, complete set of equipment in the energy industry. Adhering to the Luxi Smart Manufacturing Park as a model, we will cultivate a number of smart factories, lighthouse factories, and green factories. Leveraging the advantages of European platform technology, R&D, and brand value, coupled with strong domestic manufacturing capabilities, we will deepen integration of the technology chain, industrial chain, and innovation chain, promoting the industry's accelerated leap towards the high end of the global value chain. Smart logistics emphasizes integration, empowerment, expansion, and upgrading. It promotes integrated development of railways. We will focus on construction of highways, ports and shipping, industrial parks and platforms, deeply cultivate the physical logistics and digital platform development model, accelerate resource integration, becoming a leading international integrated logistics service provider for bulk commodities. We will accelerate layout of a modern logistics network covering major resource-producing areas, core markets, and strategic channels, and promote the coordinated development of logistics scale, sales, and storage. New energy emphasizes resource acquisition and deep integration. We adhere to a principle of integrating traditional energy with new energy sources. Energy synergy development will focus on six major development directions: coal-fired power plants integration, direct green electricity connections, zero carbon industrial parks, non-electricity utilization, regional competitive allocation, and independent energy storage. We will promote integrated development model of multi-energy complementarity, encompassing wind, solar, thermal energy storage, and hydrogen. Seizing cooperation opportunities in external electricity imports to Shandong and Xinjiang electricity transmission to other regions, and relying on existing industrial foundations and new investments, we increase efforts in obtaining new energy quotas and promoting project implementation, driving integrated development of new mines, logistics parks, and equipment manufacturing parks with new energy. Three, deepen capital operation and cultivate the efficiency of excellence. We will coordinate effort to optimize existing assets, empower capital, and integrate industries to continuously enhance quality and efficiency of capital operations. In terms of optimizing existing assets, relying on the property rights trading platform, inefficient non-core assets are disposed of in a market-oriented way, and advantageous resources and funds are promoted together towards intelligent mines with a capacity of tens of millions of tons and high-profit non-ferrous metal projects, so as to accelerate transformation of inefficient assets into efficient capital. In terms of capital empowerment, relying on multi-tiered capital market, we will make every effort to expand low-cost financing. We will leverage funding channels, increase capital operations, actively acquire scarce resources such as high-quality coking coal overseas, accelerate the spin-off and listing of Wubo Technology, unleash intrinsic value of emerging business segments, and enhance overall competitiveness, international operational capabilities and influence in the capital market. Regarding industry integration, the controlling shareholder family supports the listed company in becoming stronger and better. The company will fulfill commitment to resolving competition within the same industry, and on the basis of the orderly completion of injection of high-quality coal assets, will promote integration of other high-quality industries as appropriate, effectively resolve competition within the same industry, and ensure listing. The company's assets have increased in both quantity and quality. Investors, friends, standing at the new starting point of the 15th Five-Year Plan, we are confident and determined that our group will focus on the overall situation of national energy security, adapt to the trend of energy transformation and reform, and coordinate development and security, scale and efficiency, heritage and innovation. With profound industrial strength, sound management capabilities, and strong innovation momentum, we will calmly cope with market fluctuations and promote the company to steadily move towards a high quality, more sustainable, and more competitive direction. With strong winds and full sails, we forge ahead, riding the crest of the wave. The tide of energy transformation is surging even higher, and the opportunity for high-quality development is right before our eyes. We are fully prepared and ready to set sail. We have the capability and confidence to drive the company's transformation and leapfrog development during the 15th Five-Year Plan period, building a world-class, sustainable, clean energy leading, and exemplary enterprise with more optimized asset allocation, a more rational industrial structure, and stronger profitability. We will surely create greater value and return for our shareholders and stakeholders through sustained and stable operating performance. Thank you, everyone.