China Coal Energy Company Limited (HKG:1898)

Earnings Call: H2 2023

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Mar 21, 2024

Ladies and gentlemen, good afternoon. Welcome you to come to this China Coal press release. I am Jiang Qun. I am very honored to be the host today. According to this China Securities Regulatory Commission's requirement and for all those Chinese CSRC's requirement of this improvement of the quality of that. Today, we are organizing this China Coal, Shanghai Energy, Xinji Energy, for this 2023 annual report. We are jointly share with you for the last year for our operation results. Also looking forward to this future development. I also would like to thank all the analysts and investors for all the care and support for this China Coal and subsidiaries. We have China Coal Executive President, Mr. Zhao Rongzhe. Madame Xiong Luxan for this independent director of the board of officers, and Vice President Zhang Boshu. Chief Expert, General Manager of Petrochemical and Coal Industry, Zhao Miqin, and Director, President of Shanghai Energy. Independent Director Wu Na of Shanghai Energy, and Chief Accountant Wen Chao and Duan Jianjun, and President of Xinji Energy, Wang Zhigen. Independent Director Wang Guoliang from Xinji Energy. General Accountant of Xinji Energy, Wang Xueping, and VP of Xinji Energy, Yu Xuepi, and Secretary of Board of Directors, Dai Fei, and all the people in charge of different departments today. We will have four different items. The first one, we will introduce this strategic development of China Coal and the plan for 2024. For all the different three companies, we introduce the 2023 key work and all the different 2024 arrangements. We also have the interactions with online and offline investors and analysts. First of all, we will invite Mr. Zhao Rongzhe to share with us 2023 China Coal arrangement and 2024 plan. Distinguished guests, ladies and gentlemen, good afternoon. Welcome you to 2023 collective performance press release of China Coal Holdings. I am Zhao Rongzhe, member of the standing committee of China Coal Party Committee, chief accountant, executive director, and President of China Coal. Sincerely thank you for your long-term concern and care for China Coal. Now I will briefly introduce the basic situation of China Coal and the subsidiaries for the strategic plan and the work arrangement. China Coal is a state-owned super large key enterprise supervised by the State-owned Assets Supervision and Administration Commission of the State Council, the only central enterprise in this whole coal industry, and shoulders important mission of ensuring national energy security. The main business includes coal production, coal trade, coal chemical industry, power generation, coal mine construction, coal mine equipment manufacturing, and engineering and technical services. We have three public companies, Shanghai Energy and Xinji Energy. We all together have 123,000 staff with a management asset amount of CNY 600 billion, and it was awarded as the A-level business performance by State-owned Assets Supervision and Administration Commission of the State Council and rank among the Fortune 500. The basic is about coal production trade, coal chemical industry, coal mine equipment manufacturing, et cetera. In August of 2006, with the approval of CSRC, China Coal exclusively initiated establishment of China Coal Energy and got listed in Hong Kong Stock Exchange in December 2006. We come back to Shanghai Stock Exchange in February 2008. At present, China Coal holds 58.37% of the share of China Coal Energy. China Coal Energy has been listed among the top 100 industries of the listed companies in China and has been rated as excellent or A-level by Shanghai Stock Exchange for consecutive 14 years. Shanghai Energy was listed in Shanghai Stock Exchange in August 2001, and now China Coal Energy holds 62.43% of the share. After years of development, Shanghai Energy has formed a comprehensive recycling industry chain integrating coal, electricity, railway, and energy services. We currently have the coal production capacity of 11.49 million tons. Installed capacity of thermal power and new energy is 1.083 million kilowatts, and the self-operated railway line is 186 kilometers, and the annual transportation capacity is also 13 million tons, with a strong strength in the power field of power and water treatment and maintenance. We altogether have 15,000 employees with a total asset managed of CNY 24.5 billion. Xinji Energy is also listed on Shanghai Stock Exchange in December 2007. In 2016, 30.31% of the share of Xinji Energy held by State Development and Investment Corporation were transferred to China Coal. Xinji Energy is mainly engaged in coal, electricity, new energy, and other businesses. The coal production capacity is 23.5 million tons. The installed capacity of a coal-fired power holding company is 798 kilowatts, and installed capacity of share is 1.29 million kilowatts. In 2022, it was elected as this CSRC government demonstration enterprise. By the end of 2003, the total management is CNY 36 billion and 18,000 employees are here. Energy is important material basis for national economic and social development. In the report of the 20th CPC National Congress, it has said the energy revolution, acceleration of construction of new energy system is very important as a stabilizer and a ballast stone for the safe and stable supply of energy. Coal plays an essential role in holding an important role of the new energy development and this energy security. China Coal has thoroughly implemented the spirit of 20th CPC National Congress report, and hope to achieve carbon peaking and carbon neutrality. Make overall plan for safeguarding the national energy security and promote the green and low carbon transformation has improved that. This is also like having the overall development. Then it also have the two joint ventures and to give full play to this coal electricity, chemical, new service, dense industrial chain. Accelerate the construction of the two hedging mechanism, hedge the downside risks of the coal market with coal electricity joint venture and hedge the future carbon emission restraints mechanism with the coal electricity joint venture and renewable energy. China Coal has planned by 2025 with the capacity to be improved and now use Shanxi as this supply and to focus on this high quality development to hope to have this green and low carbon transformation as this first-class energy company. Shanghai Energy will also focus on this local coal industry to vigorously develop the new energy vehicle and to also have this Shanghai and Jiangsu and Xinjiang large scale land resources to also have the presence in the new energy and comprehensive energy industrial services, and strive to build a transformation and development demonstration enterprise. Since we are vigorously developing coal and coal-fired power industry and the construction of wind power, PV, pumped storage and other projects, we also hope to build the energy demonstration enterprise. I have to say that China Coal's two joint venture development model and development orientation of a holding listed company can not only give full play to this role of coal-fired power to ensure this bottom line of national energy security, but also gain time for the comprehensive realization of a clean and green transformation, which is conducive to the improvement of this energy efficiency, hoping to achieve the carbon peaking and carbon neutrality goals to improve this economic benefits. It is also in line with this high quality development and the status quo of the Chinese energy resources, and it is also in line with the overall deployment of the new energy security and the spatial distribution of Chinese energy resources. In the three years of implementation of 14th Five-Year Plan, China Coal has accelerated the optimization of its layout based on the resources and orientation of the consumption, promoted the landing of the two joint ventures, and to achieve remarkable results in its transformation and development. The new breakthrough has been made in the scale of coal-fired energy generation. We have already got this new development characteristics of small internal brain and a large external brain to promote the realization of the production carbon emission. We also conscientiously improve this three-year action plan of SASAC to improve the quality of listed company controlled by the central enterprise, and also achieve the excellent results in the midterm supervision and evaluation of SASAC. And we also established this ESG system to also promote this continuous development, to also have this low carbon development, to also improve this quality and this comprehensive investment, to also have this multi-level and virtuous development, to also effectively carry on this information. And then for Shanghai Energy and China Coal, and they also have this altogether comprehensive capacity to be comprehensive significantly. This is also marks this 75 years of China's establishment. This is also crucial year for the realization of the objective of the task of 14th Five-Year Plan. China Coal and its listed companies have adhered to the guidance of President Xi. And we also have already got this central ones, and then this is also catering to all those different ones and then to actively participate in this new development ones. And they also will focus on those key strategies. And then this is also improve all those high level ones and to also continuously improve this organizational structure to also have this value creation and to also have this new quality improvement. This is also accelerating the development of that. This is also having these three different listed companies and then to also have all those internal construction and then to also focus on that. And this is also having the specific operation to also have the investors to know that. And then this is also accelerating the effective feature and then to also have this high quality development to also make bigger contributions. I hope that you could support and care for this China Coal and for all those three different listed companies. We will also use all the different businesses and to pay you back. Thank you. Thank you so much for Mr. Zhao. Now, I'm going to share with you about China Coal Energy and 2024 and the work and the 2023 performance. You can see in year 2023, we are going to strengthen and to accelerate and to observe everything, and we are going to improve the energy, and we are going to operate a new high. You can see the output of commercial coal, and it was 134.2024 million tons, an increase of 15.05 million tons. In 2023, the company continues implementing the major national strategic deployment, went all out to ensure the coal energy supply and strengthen the production. Optimization, optimized production layout accelerated open pit stripping. Company gives full play to advantageous channels, strengthen the coordination, production, and marketing, and goes all out to ensure the supply of electric coal. Strictly implement the national coal price policy, take the lead in the mainstreaming market order, fully guarantee the full payment of coal contracts. In 2023, the sales volume of commercial coal was 284.9 million tons, an increase of 21.99 million tons year-on-year, 84% increase. Among them, the self-produced commercial coal increased by 13.57 million tons with an increase of 11.3%. Secondly, the company's coal chemical business continued to strengthen the basic management of production, significantly evaluate the operation status of the device, effectively control unplanned shutdown, pay close attention to energy saving and consumption reduction, and abnormal working and condition management. Realize the stable and long-term operation of the device. In year 2023, the output for the chemical products was 6.036 million tons, a year-on-year increase of 369,000 tons. Among which, the output of paraffin is 1.487 million tons, and that of the urea is 2.066 million tons, increased by 232,000 tons. The company actively go against the fluctuation of the coal chemical products. We flexibly adjust the marketing strategy and marketing layout, continuously improve the consumer surplus. In year 2023, the sales volume of coal chemical products was 6.26 million tons, an increase of 9.7%. Among which, the sales volume of paraffin was 1.479 million tons, and the urea was 2.141 million tons, increased by 349,000 tons, methane sales by 1.919 million tons. Thirdly, the company continued to optimize the production organization, actively release a defense production capacity, further promote the reduction of expenditure, improve the quality and efficiency. In year 2023, the unit sales of self-produced commercial coal was CNY 307.1/ton, a year-on-year decrease of what? 15.83 CNY/ton, down 4.9%, among which cost of materials decreased by 10.04 CNY/ton and 15.4%. You can see that transportation expenses and port charges decreased by 4.45 CNY/ton, down by 6.7%, mainly due to the change of the sales structure, the proportion of sales that bear transportation expenses and port expenses has decreased. Other costs decreased by 7.30 CNY/ton, down 18.9%, mainly in accordance with the management measure of the use of security fees. The cost of outsourcing mining engineering increased by 5.63 CNY/ton, up by 16.9%, mainly according to the arrangement of production organization and the change of geological conditions. The engineering quantity of outsourced mines has increased. in 2023, the unit sales of the paraffin was 6,375 CNY/ton, a year-on-year decrease of 7.4%, and unit sales revenue reached 1,619 CNY/ton, a year-on-year decrease of 14%. The unit sales of the methanol was 1,889 CNY/ton, a year-on-year decrease of 155 CNY per ton and down 7.6%. In 2023, the average selling price of the company's self-produced commercial coal was 602 CNY/ton, a year-on-year decrease, among which the thermal coal is 532 CNY. You can see that the coking coal, the average price was 1,386 CNY per ton, and you can see it dropped by 20.8%. The sale price of the outright trading coal was 644 CNY/ton and down 186.68 CNY/ton year-on-year, down 20.7%. The sales price of the paraffin was 6,907 CNY per ton, a year-on-year decrease of 494 CNY/ton and down by 6.7%. The sales price of urea was 2,423 CNY/ton, a year-on-year decrease of 189 CNY. The sales price of the emitted proform dropped by 11.1%. You can see that we have achieved a historical high of the operation performance. In the case of a sharp drop in the coal prices and a significant year-on-year decline in the benefits of the coal industry, the company deepened the lean management, vigorously promoted the production and efficiency improvement of the whole industry chain, and strived to maintain a steady growth trend in benefits since the 14th Five-Year Plan. Equipment enterprise actively seeks market orders, organize production significantly, efficiently, and maintain good momentum production operation through transformation upgrading. Given reform in scientific and technological innovation, the total output value of coal mine equipment in the whole year was 11.43 million CNY, a year-on-year increase of 14.8%. The sale scale of financial business has reached a new high, and the concentration of funds and management efficiency are leading the industry. In 2023, the company realized an operating income of 192.969 billion CNY. The total realized profit is 33.049 billion CNY, up 0.5% year-on-year, with a three-year compound growth rate of 12.6%. The net profit attributable to shareholders of the parent company was 90.534 billion CNY, a year-on-year increase of 7%, with a compound growth rate of 19.2% in three years. Basic earnings per share was 1.47 CNY per share, up 6.5% year-on-year. The company's comprehensive gross profit margin is 25.1%, which is same as with that in 2023. The net cash inflow from operating activities was 43 billion CNY. The year-on-year changes of the total profit in 2023 are as follows. The main profit-increasing factors as follows. First, the asset impairment reserve decreased, and profit increased by 85.16. Secondly, the sales volume of self-produced commercial coal increased, and profits increased. Number three, the unit price of the sales of produced commercial coal decreased, and the profit increased by CNY 2.21 billion. Four, the financial expenses decreased, and profits increased by CNY 333 million. Fifth, coal chemical enterprises increased profits by CNY 403 million. Six, the power generation and heating business increased profits by CNY 254 million. Seven, the non-profit expenditures reduced. Number eight, less profit increased by CNY 270 million. Eight, the coal mine equipment business increased profit by CNY 177. Nine is tax. By the end of 2023, the company's total assets were CNY 349.638 billion, a year-on-year increase of 2.7%. Retained shareholders' equity belonging to the parent company was CNY 144.12 billion, a year-on-year increase of 10.1%. The asset liability ratio at the end of the year was 47.7%, down 3.8 percentage points from beginning of the year. The ratio of assets to liabilities at the end of the year was 28.5%, which was 5.8 percentage points lower than that at the beginning of the year. In 2023, the company's capital expenditure plans closely focused on coal chemical industry, coal-fired power, new energy, and the coal mine equipment, including capital construction projects, equity investment, technological transformation. In 2023, the capital expenditure plan totaled CNY 18.02 billion, with a total of CNY 15.757 billion, accounting for 87.44% of the annual plan. Among them, the trial operation of Dahaize Coal Project was good and passed completion acceptance smoothly. Wudanyi under the Mai and Anjialing coal mine have approved to increase annual production capacity by 10 million tons per year. The construction of Libi coal mine and with coal mine progressed steadily. The Yusheji and the 2 multiply 660 MW coal electricity integration project was approved, and investment decision was completed. The 263 MW PV project in the first phase of Shanghai Energy and the New Energy Demonstration Base will be connected to the grid for the power generation. In 2024, the company planned to spend CNY 16.009 billion, an increase of 1.6% compared with actual completion in 2023. Among them, the planned capital construction project is CNY 8.726 billion. The planned equity investment is CNY 245 million, and the planned investment of technological transformation and renewal is CNY 7.038 billion. Divided by business sectors, the coal sector planned to arrange CNY 7.556 billion under the coal chemical industry board. In-depth efforts were made to deepen and upgrade the reform of state-owned enterprises and various phase tasks were completed through high standards. Six enterprises were newly selected to be Double Hundred Actions and scientific reform admissions actions of the State Council. State-owned Assets Supervision and Administration Commission. Complete reform of the headquarters of the company and its affiliated enterprises. Attach great importance to science and technology innovation, regarding innovation as the first driving force to lead the development. Vigorously implement President Xi Jinping's thought of ecological civilization, and earnestly fulfill the ecological and environmental protection responsibilities of the central enterprises. In 2023, the investment in environmental protection was CNY 3.03 billion, an increase of CNY 1.15 billion of 61%. No sudden environment incidents occurred throughout the year. Nine, since the company went public, the profit distribution policy has remained stable. During 2021 to 2023, the accumulated cash dividend was CNY 15.317 billion. Since listing, the total cash dividend of the company has exceeded 30 billion CNY, giving maximum consideration to the overall interest of all shareholders and the sustainable development of the company. By the end of December 21, 2023, the net profit attributed to shareholders of listed companies in the audited consolidated financial statement of the company in 2023 is as follows. You can see the board of directors of the company stressed that 30% of the net profit of 19.534 billion CNY attributable to shareholders of listed companies should be included in the consolidated financial statements in 2023, in accordance with China Accounting Standard for Business Enterprises. In 2024, the company adhered to general tone of steady progress, continued to promote stock efficiency improvement and incremental transformation, focused on improving the ability of scientific and high-quality development of the enterprises. The annual production and sales volume of self-produced commercial coal is planned to be 129 million tons. Above all, the production and sales volume of polyolefin products is more than 1.45 million tons, and production and sales volume of urea is more than 1.85 million tons. We are willing to carry out special actions to improve quality, increase efficiency, and stabilize growth. Focus on the following tasks. First, around the goal of planning and building a world-class energy enterprise in the 14th Five-Year Plan, continue to optimize the industrial layout to promote the development and the construction of the two joint ventures demonstration projects with high quality. The second is to carry out in-depth reforms around strengthening core functions and improve core competitiveness. Number 3, we adhere to the world-class benchmarking, continue to deepen the management, accelerate transformation of digital intelligence. Number 4, we are going to further improve the scientific and technological innovation system, strengthening construction of innovation ability, and gather the advantages of external scientific research for a joint force of innovation. The fifth is to coordinate development of safety, do a good job in safety and environmental protection from strict to data, and improve it. Good compliance management long-term mechanism, effectively prevent and resolve all kinds of major tasks, and effectively prevent the control risks in key areas. The sixth is to further promote special actions to improve the quality of listed companies controlled by central enterprises, and continuously raise, improve corporate governance and information disclosure quality, strengthen communication with investors. For dear investors, analysts, company management, and all colleagues will keep up in mind with the initial mission, make persistent efforts, forge ahead actively, participate in China-style modern energy practice, and build new achievements of the world-class energy enterprise with high-quality development. Thank you so much for listening. Now please give one applause to Mr. Mao and Mr. Wang to introduce the business performance of Shanghai Energy and the 2024 work arrangement. Distinguished guests and all the investors and analysts and media friends, good afternoon, everybody. In the spring and in this beautiful March, the spring is breezing, and the weather is warm in this beautiful season, and full of vitality and hope. As the Chairman of Shanghai Datun Energy, I am very honored and very happy to meet you through this performance briefing. First of all, on behalf of Shanghai Energy, I would like to extend a warm welcome to all investors, analysts, media friends attending today's meeting. I would like to extend my heartfelt thanks and sincere greetings to friends from all walks of life. Now, I would like to briefly introduce Shanghai Energy's business performance in 2023 and key work completion, the future development plan, and key work arrangement in 2024 to all shareholders, investors, analysts, and media friends. Firstly, Shanghai Energy's operating business performance and key work completion in 2023. 2023 is a crucial year for Shanghai Energy to anchor new development goals and implement new development strategies. It is also a crucial year for Shanghai Energy to promote reform and transformation with unprecedented efforts. Over the past year, Shanghai Energy has always adhered to the guidance of President Xi Jinping's thought on socialism with Chinese characteristics for a new era, actively implement the development and the requirement of stock efficiency improvement and incremental transformation, accelerated the implementation of the one, two, three, four, five transformation with the care, the guidance, and help and support of China Coal and investors. The board of directors of the company, together with management and all employees, work hard to overcome difficulties, work hard. We deliver a very good report to all the shareholders. Firstly, the company's profits remained stable. The company overcame the complex geological conditions of the coal mines and a downward trend of the main product market. In 2023, the output of the raw coal was 8.0255 million tons, and the output of commercial coal was 6.4609 million tons. The output of clean coal was 416,000 tons, and power generation is 3.703 billion KWh. The aluminum processing output is 97,800 tons, and the equipment repair capacity is 19,300 tons. The cost of the raw coal, the power generation, the power supply, and the washing, and all the processing, all decrease with the same caliber. The company runs operating income of CNY 10.9 billion, net profit attributable to shareholders of this company is CNY 906.9 million. Secondly, breakthroughs have been made in transformation development. Adhering to a long-term perspective and the sizing of the situation, the company has studied and formulated medium and long-term development plan, increased the acquisition of external coal and new energy resources, accelerated construction of coal mines and new energy projects with the strength of the whole company, and actively cultivated new profit growth points. In 2023, the investment was CNY 1.53 billion, 96% of the annual plan was completed. Xinjiang coal mine project has basically completed, and will enter the third phase of project in 2024. The integrated demonstration project of source grid and storage of Jiangsu headquarters and was included in the list of the third batch of largest scale wind power PV bases in China, and was including a medium and long-term development plan of Fuzhou's new energy system. Thirdly, the reform has achieved landmark results. Adhere to the height of the company's survival and development. Push forward the reform with unprecedented determination and strength, and constantly stimulate the company's development of vitality. The reform of human resources optimization has achieved remarkable results through measures such as replacing labor services, dissolving the labor contracts, and through consultation, encouraging to move to the front line. The cost reduces that improve efficiency has been achieved. You can see that the high quality completion of the two level institutional reform, a total of 112 institutions were streamlined and 1,046 establishments were reduced with the pressure drop ratio reaching 36% and 28%. A differentiated salary distribution mechanism oriented to value creation has been formed. The assessment mechanism of mine contract operation has been improved, and all of them have implemented smart union accounting and the ability of self-financing, self-survival, and the self-development of the mines. Number 4, the overall security situation remained stable. Company always insists on safety as an important guarantee for production, operation, development. It embodies an ideological consensus that safety is as first, and forms an effective mechanism of keeping eye down to grasp safety. You can see that we invested CNY 130 million throughout the year to initially realize the integration of visualization mechanism, standardization. The company's overall safety production remained stable with 11th and 6th anniversary of the safety production in Kongzhuang Coal Mine and number 106 coal mine. Fifth, the level of scientific and technological environmental protection work has been continuously improved. The company insists on scientific and technological innovation as the first driving force to lead development with an annual R&D investment of CNY 417 million and the R&D investment intensity of 3.8%. The innovative platform of two institutes, 10 institutes, and one center of the National Enterprise Technology Center has passed the annual assessment of the National Development and Reform Commission. We actively fulfill our responsibility of eco-environment. Friendly invested CNY 37.82 million and implemented eight eco-environment control projects. Sixth, actively created maximum value returns to the shareholders. Since its listing, the company has realized a cash dividend for 19 years, with the dividend account reaching CNY 3.324 billion, which is 3.79 times of the raised capital of CNY 877 million from 2017 to 2022. The company's annual cash dividend accounted for more than 30% of the net profit attributable to ordinary shareholders of listed companies in the consolidated statements. In 2023, while continuing to promote revenue, good profit growth and sustainable development, the company decided to distribute a cash dividend of CNY 296 million to all shareholders. The company pays great attention to market management activities, strengthen communication with investors. The market attention and trading activity with Shanghai Energy stocks have been improved and enhanced. In the future, the company will grasp the relationship between short-term, medium-term, and long-term, and create greater value for shareholders on the basis of accumulating energy for the long-term steady growth of the company. Seventh, Shanghai Energy future development plan. Facing a new strategy of national energy security and the goal of carbon peaking and carbon neutrality, Shanghai Energy adheres to the guidance of President Xi Jinping thought on socialism with Chinese characteristics for a new era, comprehensively studies and implements Mr. Xi's thought. We put forward the 1, 2, 3, 4, 5 development strategy according to the 14th Five-Year Plan. We put on the high quality development of the company, create a new Shanghai Energy source in matter of recreating a new Shanghai Energy target, speed up industrial upgrading and base development. Strive for regional development opportunities and create a new Shanghai Energy that is safe, efficient, multifunctional, green and low carbon, leading the science and technology, modern governance in a long lasting foundation. Focus on two joint ventures. That is, focus on two joint ventures of the coal plus coal-fired power and coal-fired power plus new energy, extends the industrial chain of the coal and electricity to achieve the strong chain replenishment. Highlight the new advantages of energy integration and focus on the development of coal, electricity, new energy and comprehensive energy services. Adhere to the three-in-one orientation, that is, adhere to orientation to conforming to the national development strategy, integrating with local development planning, and combining with the development strategy of China Coal and development reality of Datun. Adhere to the principles of four modernizations, that is, according to the four principles of scale, regionalization, integration and benefit, coal and new energy resources are obtained. Number five, according implementation of the five strategies, including safety and stability, stock efficiency improvement, incremental transformation, reform and innovation, and party building guidance to lay the foundation for the company's high quality development. Strive to achieve the goal of 4545 by the end of the 14th Five-Year Plan. The coal production capacity will be stabilized at around 40 million tons, and the total assets of the two major industries will basically reach the peak. The key work arrangement of Shanghai Energy in 2024. 2024 is a crucial year to achieve the objectives of 14th Five-Year Plan. It is also a year of upgrading Shanghai Energy's reform and transformation. Under the guidance of Xi Jinping's thought on socialism with Chinese characteristics in the new era, we will thoroughly implement work arrangement of the Central Economic Work Conference, the National People's Congress and the China Coal. In accordance with the company's 3588 work idea, with the spirit of "I don't have to succeed" and responsibility of "I have to succeed." We will go all out to do a great job in safety production, management reform and transformation, and strive for better results, mainly do a good job in the following aspects. The first is to overcome difficulties and organize production in a scientific and orderly manner, ensure the annual output of raw coal is 8.89 million tons, that of commercial coal of 6.25 million tons, that of power generation is 3.6 million KWh. That of aluminum processing is 100,000 tons. That of railway freight is 12.3 million tons. That of equipment maintenance is 16,500 tons. Second, the fine management and improvement of management quality, and we ensure the annual operating income is CNY 11.294 billion, profit is CNY 1.235 billion. The third is to set up special classes and fully promote the implementation of 1, 2, 3, 4, 5 development strategy. In terms of the coal resources, strive to obtain one or two high quality coal projects. In terms of new energy resources, the basic goal is to obtain 200,000 MW projects, and we are going to accelerate the current projects. We are going to focus on the Weizigou coal mine in Xinjiang, the new energy projects, the power grid reconstruction in Datun mining area and other projects. We are going to secure the overall investment throughout the whole year to be CNY 1.78 billion, ensure that more than 70% of the objectives and tasks for new round of reform of SASAC are completed. We are going to strive to achieve more efficient industries and leaner institutions and leaner manpower and gather the main business around scientific and technological innovation. We needed to accelerate the speed of the scientific innovation, and we are going to ensure the investment rate of science and technology, which is above 3.8%. We are going to focus on the key points and actively guard against safety, stability and environmental risks. Firmly adhere to the goal of zero death and zero group visit, and zero exceeding the standard to ensure that no major safety accidents and major leapfrog group visits. Seven, strengthen confidence and strive to improve the quality of the listed companies. Fully implement the requirement of SASAC and China Coal, and we are going to create maximum value for the shareholders continuously. Dear guests, ladies and gentlemen, the development of Shanghai Energy cannot be separated from your support. In the future, we need your valuable suggestions of Shanghai Energy's reform and development. We will take this performance briefing as an opportunity and listen to your opinions and suggestions, and learn from the China Coal Energy and Xinji Energy, make full use of the strength and avoid the weakness and press ourselves and make great efforts to push Shanghai Energy safety production, and strive to create greater return to the investor, shareholders and society. Thank you. Thank you, Mr. Mao. Now please invite Mr. Wang Zhigen to introduce the business performance of Xinji Energy 2023. Distinguished guests, ladies and gentlemen, good afternoon. First of all, I'm very happy to be here and to present to you on behalf of Xinji Energy. On behalf of the company, I would like to extend my heartfelt thanks to friends from all walks of life. 2023 Xinji Company adhered to the general term striving for progress while maintaining stability, fully implementing the development idea of improving efficiency by stock, incremental transformation, and the two, and the joint ventures. Through the joint efforts of Xinji people, the company's safety situation was stable and improved, and many production operation indicators reached the best level in history. Over the past year, Xinji Company has made great achievements in promoting enterprise commodity, coal production, sales volume, profits, total assets, operating income, labor productivity, and asset liability ratio reached the best level in history, and operating performance achieved growth. For the past year, Xinji has deepened reform and innovation to improve efficiency. Four scientific and technological achievements have been identified as international leading and advanced level, and 114 industry and professional science and technology awards. The company was shortlisted in the list of Double Hundred Action enterprises based on State-owned Assets Supervision and Administration Commission, and was identified as the first batch of digital transformation pilot enterprises. For the past year, Xinji Energy has optimized its layout and made all-out transformation with a global vision and strategic thinking. We will consciously integrate and serve the major strategies such as the integrated development of the Yangtze River Delta, make overall arrangements for the headquarters, economic zone, and a core functional zone and industrial development zone. We are going to accelerate in the construction of development pattern of three industries, the synergy of coal fired power, and new energy. In year 2023, the company achieved the operating income of CNY 12.845 billion, an increase of 7.01% over the same period of last year. The total profit was CNY 3.438 billion, an increase of CNY 200 million or 6.17% from the same period of last year. The net profit attributable to the owners of the parent company was CNY 2.109 billion, an increase of CNY 33 million or 1.57% over the same period of last year. In 2023, the owner's equity attributable to the parent company was CNY 13.519 billion, an increase of 17.99% over the end of last year. At the end of the year, the asset liability ratio was 59.15%, down 3.98%. The net cash flow generated by operating activities in the whole year was CNY 3.796 billion, an increase of CNY 789 million or 26.25% over the same period of last year. The annual earnings per share was CNY 0.814, an increase of 1.5%. Secondly, completion production and operation indicators of the coal sector. In 2023, company closely focused on the annual output target of a camp influence of factors such as mine connection and geological structure, adhered to all surface production, continuously strengthened the production, scheduling optimization, and production plan management, scientifically optimized mine production layout, fully released the high-quality production capacity, and ensured the company's high and stable production. In 2023, the company produced more than 19 million tons of commercial coal, an increase of 5.16% compared with the same period of last year. In 2023, the company resolutely implemented the decision-making arrangement of the CPC Central Committee and the City Council, and we made every effort to do a good job in energy supply, effectively played the role of the central enterprises as the main force in the energy supply. In 2023, the sales volume of the company's commercial coal was more than 19,068,000 tons, an increase of 8.7% of the same period of last year. So you can clearly see that we basically show the responsibility of the central enterprises. In 2023, the comprehensive tax-free price of commercial coal was CNY 551.38 per ton, up CNY 1.33 per ton. The completion of the coal cost indicators. In 2023, the company adheres to the concept that all costs can be controlled and does a good job of increasing revenue and reducing expenditure, reducing costs and increasing efficiency, strengthening the whole process of cost control, implementing responsibility of cost control, and strictly assessing the targeted cost responsibility mechanism, strengthening system cost reduction, technology cost reduction, and expenditure reduction, and achieving good results in the cost control of the commercial coal throughout the year. The completion of production operating indicators of the power sector in 2023. The company continued to strengthen management of equipment operation, maintenance, and defect elimination to realize the safe and reliable operation of the unit. Actively analyze the situation, study countermeasures, strive for the understanding and support of the Provincial Energy Bureau and Provincial Electric Power Dispatching Center, and adopt a deep peak shaving method. In 2023, Banji integrated plant generated 10.393 million kWh, a decrease of 2.67% over the same period of last year. The electricity consumption reduced by 2.78% compared with the same period of last year. The average electricity price, excluding tax, is CNY 0.04098 per kWh. The total profit for the whole year was CNY 877 million, an increase of 9.06% over the same period of last year. The main work arrangement for 2024, you can see, we will celebrate the 75th anniversary of the founding of the People's Republic of China, and the 35th anniversary of development and construction of Xinji mining area and Xinji's guidance. We will faithfully implement the spirit of the 20th CPC National Congress and the Central Economic Work Conference, adhere to the general tone of work, strengthen strategic support, and make overall plans for development and layout. The first thing, the Anhui headquarters economic zone. Make full use of the industrial base of industrial and mining cities, and the superior resources of the capital cities, and fully integrate into the construction of the Hefei metropolitan area. We are going to build a strong core functional area focusing on doing a better job coordinating the main mine and power plant projects in Huainan and Fuyang, Bozhou, and other regions, and taking two joint ventures plus as the path. Actively doing a good job in the construction and reserve of coal power plant, and new energy projects. We are going to vigorously develop new energy resources, and we are going to boost the economic development of the inter-provincial neighboring area with a strong national energy security, build coal-fired power and new energy projects in Chuzhou, Lu'an, and Shangrao, and strengthen the role of the state-owned enterprises in accelerating the high-quality development of the old revolutionary areas. In 2024, it is important year for Xinji Group to realize transformation development. Company will actively promote the implementation for new energy projects, speed up the process of thermal power project study, and lay out strategic emerging industries, and make every effort to build an energy demonstration enterprise in Eastern China that is multifunctional, green, low carbon, intelligent and efficient, and modern governance. Strive to create the new situation of the three industrial coordinated development of coal. All employees of Xinji will keep in mind their initial mission, make persistent efforts, and forge ahead, constantly improve the quality of the company development, make positive contributions to the health development of the capital market, and give back to all the shareholders and investors with excellent performance. We look forward to share the achievements of the company's high quality development with all investors. Thank you. Thank you so much for Mr. Wang's introduction. Now let's go to the Q&A session. This Q&A session will be divided into online and offline. We will respond to the onset questions first. The distinguished Mr. Zhao and all the leaders, good afternoon. From Xinda Securities. First of all, I'd like to congratulate on the three listed companies of China Coal and congratulate on your performance and the rewards to the shareholders, and like analysts and investors. We can clearly feel that China Coal and the listed companies are implementing the State Council's guidance and the requirements from the security. I clearly see your efforts and I see the results. In here, I'd like to take this opportunity to ask three questions. The first question is that I wanted to ask Mr. Zhao from China Coal, how does the company see the future development of coal and energy? I wanted to see the future trend of the coal and energy industry. Secondly, in last year, we clearly see the transformation of Xinji Energy and the two joint ventures. I wanted to ask, in terms of promoting the two joint ventures, what about the opportunity? The third question, I'll go to Shanghai Energy. Shanghai Energy is aiming to build up a transformation-based company and especially transformation for the new energy industry. What are the new projects and the highlights of the future development? These are three questions to three companies. We are going to ask Mr. Zhao first. Okay. In terms of development and the trend, from the big picture, I would say China's economic development has a very good resilience and very stable. Of course, this is the basics. From the industry's perspective, you can clearly see that energy, it's very important support for economic development. Coal plays a very, very crucial and bottom-up role in the energy industry. Go to the features of China's energy. In the long run, you can see coal and energy are still the most basic energy. This is the first thing. Secondly, of course, we have the two ventures plus to actively promote fire electricity and new energy. Having these new projects, we can better optimize the energy structure. Number three, the advancement of the technology. For coal, we focus on the clean development and the clean exploring and the clean usage of the coal. You can see the intelligence of the coal and it's improved. There's a high frequency for clean usage of the coals. That is why I believe with the economic development of China, coal will contribute more, and clean coal will contribute more. Thank you. Thank you so much for Mr. Zhao. The next question goes to Xinji Energy. The two joint projects of Xinji, the first coal is coal plus co-electricity. Of course, and firstly, we needed to ensure the stability of coal industry. The coal output and the capacity, this is more than 20 million tons. Now we actively look for the resources from other places to assure the long-term growth. We are aiming to achieve this output. The second joint project is coal plus electricity. In the past, you can see, power and electricity only accounted a small portion. For now, we are planning to build four electricity plants. After two years, probably maybe up to the first half of 2026, then you can clearly see that. You do achieve more than 880 million kWh. Which means, the coal produced by Xinji can be consumed by Xinji. That is why, we can achieve the coal and electricity and the joint operation. In that case, the company's capacity can be enhanced, can be improved. Secondly, we can control the risks. Because in that case, the cost is lower and the profits of electricity is higher. It will also bring more efficiency to the enterprise. Another joint project is the coal plus new energy. Coal electricity plus energy. We started to do this, now we are making these key projects. We are making and to including to the 14th Five-Year Plan, we are aiming to achieve more than 1 million kWh and wind power plus PV. This is also kind of offset the risks. In general, our strategy of Xinji and power, coal, new energy, electricity. We have the coordination development of the three energy. Three categories of energy. Thank you. The third question is about transformation development of Shanghai Energy. Thank you so much. Thank you so much for your long-term support to Shanghai Energy. Shanghai Energy has more than 50 years experience in coals, now we have three things to share. The ways we need to strengthen the power of the coal, we needed to have the lean management of the electricity, and we needed to develop the new energy. Recently, we stabilize the output capacity of coal. In the headquarter, we will keep this 7 million ton capacity. We have more than 1 billion ton storage. For the headquarter, the output is 7 million-8 million tons. We are going to accelerate the deploying of the two coal mines in Xinjiang. We've already invested the first project in Xinjiang, and we are going to accelerate construction of another project in Xinjiang. By the end of 2025, we are aiming to start the operation, then it can improve the output of the coal. In terms of headquarters, we are going to accelerate the development of new energy, and we are going to develop the PV in the phase 1 project. We have completed first phase. In the future, in Jiangsu Province, we will build a tangible pilot and we are going to build under the MW level and new energy project. We need to have more energy in energy storage. We are aiming to build the first two-in-one pilot zone of the two grid in Jiangsu Province. We are going to make the comprehensive coal energy, comprehensive energy pilot zone. In Xinjiang, we are going to expand the output on the basis of the two coal mines, with the guidance of the national strategy. We are going to accelerate the output of these coal mines in Xinjiang. We are going to use multiple ways to improve the scales of the power generation in Xinjiang. At the same time, we are going to capture and get the high quality of coal resources and new energy resources throughout the whole world. We are aiming to build the new energy equipment capacity is more than 55 million gigawatt. Okay. I have two questions. The first question. You can see I wanted to ask about the capital related plans in the following 3 years. Secondly, compared with the other companies and compared with the competitors in the company, in the future, do you have any new Sorry. Can you repeat your question? Which company? Sorry. Okay, so you are asking China Coal Energy. China Coal Energy and China Coal Energy cash dividend, right? Okay, I am going to ask you a first question. In terms of the capital plans for China Coal Energy, basically, it is about CNY 16 billion to CNY 18 billion. This is not a very high level, of course. In year 2024, the capital expenditure in 2024 are normally used for key projects like in the aluminum K and the coals for Shanghai Energy and the coal chemical. That is why in recent years for the new projects and the chemical coal, in general, we are going to keep it stable. In terms of the China Coal Energy, the profits and arrangement, we are going to ask my colleague to share. Yes. We really care about this question. In terms of the dividend, in recent years, okay, back to 2017, we always have the 30%, and gradually, for the high quality development, you can clearly see that we have the feedbacks sent to the shareholders. You can see for the each share, each share is 0.4. You can see for the parenting profits, you can see higher and higher. What does that mean? From the benchmark level. We also ask our partners as including the external companies. We need to assure the high quality development, so this is the best reward to the shareholders. This is the foundation. Secondly, we need to have a more stable and reasonable proportion. We need to take care of development and stability and reform. Sometimes, people really care about the result of high quality development. We also fully consider our promise to the capital market. In year 2026, we are going to arrange the profits from 20%-30%. We always insist on cash dividend. We do not do other discount related dividend. You can clearly see that for Shanghai Exchange and encouraged those well-performed companies to have this percentage of 30%. Whatever difficulties we encounter, we always insist on that. We insist on the high quality development. That is why high quality development and when you see, you can see the capital on the report. There is a financial commitment for China Coal. Actually, for our group, we needed to firmly take advantage of the capital market and the supervision, and we are going to assure the safety of those. That is why we put the financial company under China Coal. Which means China Coal does not only provide the internal resources for this CNY 90 billion, CNY 30 billion of them, and for the oil. Those capitals, we needed to consider about the needs for the deployment. If we remove this CNY 30 billion, we have CNY 60 billion left, and we have special funds for safety and for environment. If we add all of this up, in general, there are over CNY 10 billion. If we deduct this CNY 10 billion, then we have CNY 50 billion. You can see, the total number is more than CNY 70 billion. Including the basic capital and the interest, the total sales is about CNY 200 billion. In general, we think you can clearly see that. For the capital, you needed to enough capitals, and then we will arrange that well. That is why we needed to have some other alternative ways. Of course, those alternative ways will now be considered by us. That is why we need to assure all of this, and we will sort all this out. Then, we will have the high quality and reward it to the shareholders. Because we need to clearly sort out everything, and we needed to clearly sort out the accounts. You can see, we have these two major contributors to the profits of China Coal. We can clearly see that. We basically got the recognition of the other capitals. That is why. You can see, the capital operation is very good. It doesn't require the listed companies to using some alternative way. For example, we take care of the large investors, the large shareholders or something. Actually, we can take full advantage of our own capitals, and then we can enjoy the high-quality development. That is my response. Thank you so much. Okay. Hello, my name is Hu Weiyang. First of all, I'm very happy, honored to come to you under this collective performance review. It's great honor for me to have this face-to-face talk to all the leaders. There are two questions to Mr. Zhao. The first question is that, actually, under China Coal, there are very good coal resources. For coal, we mentioned China Coal, right? In terms of coal, how about the electricity assets, the power assets? Any other plans for the listed companies? Secondly, in terms of the coal supply chain. There are some new supply side for the coal. Compared with 2023, what are differences? These are the two questions. The first question goes to Mr. Zhao. Okay, I'm going to answer the first question. Under China Coal, compared with the other several companies are working with the other state-owned companies and central companies, we did a lot of the rocket projects. Maybe some projects are already started. Okay, of course, we needed to improve the storage at the same time, and for these projects. Basically, were owned and buy the other state-owned companies and central companies. Because at the corporate level, we promote these projects. These are good for the two state-owned companies to coordinate. There are some procedures, actually, are very complicated to proceed. That's why, by doing this, it is better for us to implement the projects and for those new energy projects and rocket projects. In the future, how do we achieve, or how do we achieve the security-based target? Of course, we will have some further research. But for now, we don't have this arrangement for now. If we have further arrangement, of course, we will report to the public timely. For another question related to the market, like the price-related issues or something, we are going to invite Mr. Zhang, the VP, to share with you more details. I'm going to answer the second question. Actually, I think, we can share from two different perspectives. The first perspective is by now. You know, the coal and supply system is improved, and the supply assurance is also strengthened. You can clearly see that the long-term, medium-term of the coal, and especially the power coal and the electricity coal. You can see the supervision requirement is higher and higher, and the transporting insurance capability is improved. You can clearly see that last year, we reached the historical high. That is why we have a very clear supply. You can see the market is basically Okay, you can see the market pattern of 2024. The market pattern is basically balanced and transferred to loose pattern. The overall supply of the coal is basically very stable. The demands of coal, according to our forecast, are growing steadily. You can see the market scale in general. We need to consider about the theoretical and the seasonal based. There will be a new balancing point. Of course, people consider in recent years, the coal price is higher, but this higher is more like the reasonable high. We think the fluctuation actually is narrower and narrower. In year 2024, you can see the market has fluctuated. Secondly, you can clearly have a look at the coal price on the short term. There's some challenges for the downward of the price. But you can see this is the valley season of consumption. You can see the strong coal demand in Southern China basically ended. In the short term, things are getting better in terms of the price. On the long term, by now, the current coal price is still at a historical high. In the year 2015, you can see the price is CNY 370. Although the price is decreasing, but the price is still over CNY 800, CNY 850, around CNY 850. At the beginning of the year, the price was CNY 950. That is why, in terms of the price to the market, it is high compared with the past. The price is still at a historical high in terms of the coal price. You can see we face a stress downward. You can see the electricity coal mechanism is very stable. It is also very good to the market, friendly to the market. The price fluctuation Okay, I'm not sure whether my answer satisfies you. Hello. Thank you so much for sharing with us about the results of the performance. I have several questions. The first question goes to you on China Coal. In terms of 2024, the producing and consumption plan of the coal. The second question goes to Shanghai Energy and the investment of the new mines and the basic info of the producing capacity. The third question goes to you, Xinji Group, and you can see the equipment of the coal and electricity and for the equipment capacity plan. These are three questions to three companies. The first question concerning the producing and output of last year. Producing and consumption is very simple. We will strictly follow the approved and verified output capacity. Fully output and fully consumed. Yes, we've already reviewed the arrangement of the capacity coal and is more than 120 million. In terms of Weizigou coal project, we are going to ask Mr. Mao from Shanghai Energy. Weizigou coal is a project from Shanghai Energy, and it is very huge. Now we accelerate the construction of Weizigou coal, and we basically completed phase one project, and by the end of 2024, we will complete phase two of the project, and we will enter phase three. By the end of 2025, I think, we will start producing. This is our plan for now. In terms of Weizigou coal and coal, and in terms of the coal quality, it is very competitive in Xinjiang. Because you can see, it is over 5,000, and it is low dust, and the thermal capacity. You can clearly see that it is very high in quality. Weizigou coal, for now, the output is 2.4 million ton. However, you can see the geological condition is very good, and it is good enough for building a bigger coal. According to the output capacity and according to Xinjiang standard and national standard, we will accelerate the speed of producing. Thank you. Mr. Xu is going to the units for coal and electricity. For Xinji Group. We are going to talk about the output of Xinji Group. Actually during the 14th Five-Year Plan, Xinji Group, focus on the transition of coal and electricity. By now, during the 14th Five-Year Plan, we have already invested in four coal-related power plants. We are going to build the pretty integrated producing. We already started this project in year 2022. The two units, and we have completed the key units, the major plant, and the construction of the whole site is basically completed. Now, we have already entered the installation of the device equipment, and we are aiming to achieve the double units output in 2024. Another project is Shangrao project. The total investment is about CNY 7.86 billion. The capacity is about 1,000 MW. By now we already started the construction of the project, and we have completed the procedures of construction for the project. The Shangrao power project is aimed to be completed in 2024. The third project is Xuancheng project. The total investment is about CNY 5.3 billion. We are going to build up 160 MW coal and generation. By now, we have completed procedures for starting the project, and we are aiming to officially start the construction recently. It is aimed to be completed in year 2026. We are going to invest CNY 1.3 billion in 2024 for this project. The fourth project is Lu'an power plant. The total investment is CNY 5.6 billion. We are aiming to build the two secondary coal generation. It includes a lot of different facilities. By now, we are preparing for this project. It is aimed to start in the first half of 2024 and completed in 2026 and start operation. We are aiming to invest CNY 700 million in 2024. These are the new plans for Xinji Energy. Thank you so much. Hello. I'm Jaikun from Debang Securities. I have two questions to Xinji Energy. The first question, you can clearly see that the company invested a lot in thermal power. I wanted to ask about the new policies. How will these new policies impact your future operation? Secondly, Xinji boss, leader said that a lot of projects will be completed and start operation in 2024. How do you consider development and the dividend? Like the coal and new energy, what is our focus in 2026? Let's give the floor to Mr. Shi again. Yes. Actually, in November 2023, the central government have this new announcement in terms of the new price system. All the coal and all the coal power projects are included in this new policy. The capacity price policy is different for different regions and different time. In 2024 to 2025, for the capacity price, it's 100 RMB for each kW. The electricity grid company announced that price accordingly. After, under this new price system of the capacity price. You can see, for this coal and power technology, you can clearly see these new policies, the details included, in terms of the details of capacity price. You can see a lot of the evaluations and application will be stipulated clearly by China Energy Bureau. If the units got the three times reduction of the whole month, then, it will get punishment and removed. You can clearly see the thermal power system and condition of Anhui Province is very good. You place the capture rate, that is 95.77% on average. The capacity price capture is 96%. That is why in this case, Xinji Group, in January and February, paid integrated power and actually is better than the average performance of the province. In general, we can clearly see that in terms of the implementation of the capacity price, because Xinji Group basically have the high parameters and the big units. We have the power plant, especially the pithead power plant. That is why in terms of the capacity price new policy, actually, we benefited a lot from that. This is the first response. Secondly, in terms of the 14th Five-Year Plan and after completing these projects and the next step for development, like that of yourself and the new coal and new energy system. By relying on the coal and electricity, of course, we will focus more on the new energy. During the 14th Five-Year Plan, for the new energy capacity, will be over 1 million kW, and we will take the advantage of new energy to offset the coal and coal electricity's impact to the operating performance. Thank you so much. Hello, Meng Xiangwen from Dongwu Securities. Here I have two questions. The first question, the coal chemical projects in Xinjiang area. Secondly, this low thermal coal and generation projects, the carbon reduction. Are these affected by the price subsidy? Thirdly, the Lu'an project of Xinji Energy. Sorry, can you repeat the question? The coal chemical project in Xinjiang and this new thermal subsidy, and the three questions concerning the Lu'an project. Okay. The first question related to the coal chemical. We are going to invite Mr. Zhang to answer the question. Okay, I am going to respond to this question. Okay, Xinjiang is a key region for us to develop the coal chemical industry. In the future, the deployment of the coal chemical in Xinjiang, we will use the natural gas. We need to actively capture the natural gas. Secondly, in Xinjiang, we will have the premium raw materials. These premium materials include the two kinds of materials. The first one is the premium polymeric materials. The second one, we will have the premium and the carbon-related materials. For example, the premium active carbon materials. We also have the premium hard carbon materials, which is the materials for the energy storage. This is a very good material with the lithium. We have very good coal. This coal base is basically used for the carbon emission. These are the major supply chain in Xinjiang, of course, for the premium carbon emission projects. The premium active carbon and the welcoming soon. The next step, we are going to have the composite materials and for the hard carbon and the premium polymeric materials. Yes, actually, the premium active carbon materials in Xinjiang region, of course. You still need to adhere to the official announcement from the company and the subsidies. We are going to ask the question. Thank you so much for your question. Shanghai Energy. Okay, we have our own strength and for the integration of the coal and electricity. We have our own coal, and by screening, we have the coking coal for the clients. You can see that those are the affiliated products of the coal washing. We also have our own coal slime. You can see the affiliated products of the coal wash is very low. The price is very low. That is why we have our strength and for the power generation. Okay, for Pingshuo, this project is still under construction, so probably maybe after completing the project, I think we have clearer answers to that. By now, I do not have further info for that project. Concerning the storage, energy storage of Xinji, we are going to hand over to Mr. Xu again. Actually, this project in Lu'an, we are still doing the research for this project. Because we are still under due, and this pumped storage policies from the central government, and there are different kind of guidelines and different plans for that as next step, and we are going to apply this. For now, we do not have the specific working arrangement for the pumped storage power station. Good afternoon, everyone. I am from Guotai Securities. Thank you so much for organizing this activity. I have several questions. The first question goes to the three listed company, and this is the same question to the three listed company. From the official website of China Coal, we saw in terms of the intelligent related investment of the mines, you have made a huge investment of example, you have the first round intelligent mines. In terms of the intelligent related mines investment, any efforts in the future, or do you see any solid results of cost reduction and efficiency improvement? The second and third question go to China Coal Energy. The first question, for the overall China Coal, the sales structures, it seems that how many percentages go to pit related sales? We see Zhongmei is aiming to invest in Ordos and including the wind power, CO2, and it is more likely a multi-energy plan. Internally, how do we evaluate this project? These are the questions. In terms of the intelligence, the coal intelligence, and intelligence, you can clearly see that the accelerating speed is very, very fast in terms of the intelligence for mines. We still needed to see the overall results. From the big picture, for example, reduce the staff, reduce the labors, secondly, improve the safety, and thirdly, improve efficiency. In terms of the energy reduction, of course, reduce the labors. By intelligence, basically, there would be nobody there. Actually, if there is nobody under the mines, of course, it is safer, right? We do not need to worry about the accidents. This is about reducing the labors. In a lot of places, we basically see a lot of the mines, basically have no labors. The safety is hugely improved. This is not only about the smartness and intelligence of the machines. We still need to consider about the supporting of the large model data. In terms of the forecast, the alarming, of course, the safety is secured. The performance is also improved. At the same time, by this smartness and intelligence, we can improve the premiumness and high efficiency of the coal machines. In terms of progressing of the smartness and intelligence by now, you clearly see from the WeChat accounts, like, the smartness. Basically, we achieved the advancement level by now. For the smart coals and including the coal production. We have more than 80 of the mines and working locations included with smartness and intelligence. In terms of the big data, we basically already built up 14 controlling platforms, and we also have 15 big data centers. From the corporate level, we are aiming to build up the whole group's smart controlling platform. Including the smartness, of course, for the next stage, the smartness will be hugely improved. In that way, in terms of the corporate efficiency and safety and the environmental protection and all of these will be improved. I think to the investors, it is also very positive, very good. In terms of the investment, we still needed to improve the investment. On the other side, we needed to strengthen the PR, and we also needed to improve the scientific contents. On the other side, to the smartness, we still needed to strengthen the evaluation, and we needed to make it better. In terms of sales structure, we are going to invite the next one, Mr. Zhang. There are a lot of the factors. Actually, in terms of sales of the coals, are very stable, basically. Under this mode, of course, a lot of the factors are related to the market and according to the national policies. At the same time, it also related to the regional reports and regional capacities, and it also related to the quality of the coal. From the strategic level, you can see the sales are very stable. You can see the percentages of the ratio, one-third under the water, less than 50%. Roughly, these are the structures of the sales. Actually, for Yitaiguang Project, it is our science innovation project. It is also the green fossil and the projects, and this is two and hydrogen, so these are the clean energy. You can clearly see that. It has different compositions. The progressing of this project, we have completed the local and the filing, and we have completed the procedures inside the group. There are two other procedures which are not completed. The first procedure is about evaluation, and we are actively talking to the relevant bureaus. We are aiming to complete all the procedures in H1 of this year, and then we can start the construction in H2. If we could start the construction in H2, then we can start the operation in 2026. Thank you. Okay, thank you so much for your opportunities. According to Xinji Group, I have two questions. In the past years, we haven't seen the R&D cost. However, there's an additional 8 million on R&D cost. What was this R&D cost for? For the follow-up on R&D cost, do you have any plan? The second question, by 2023, you can see the investment return on investment is improved. Can you please explain why? Can you share more about the Xuancheng and the power plant in 2023? The operation construction. First of all, I'd like to explain to you briefly. The R&D cost added in 2023, by 8 million. Actually, it is the professional report from the accountant perspective. Actually, Xinji Group really, really cares about R&D, and we invest a lot in R&D. Most of the projects are related to the safety output of the cost. That is why. At the accountant level, you clearly see the safety producing cost and the mine maintenance cost. Okay. You can clearly see that in recent years, we have more and more R&D cost. In order to have more discount of R&D, there are some rules from the government. If there's some kind of R&D cost, then the tax can be reduced or redeemed. That is why since year 2023, we put this R&D and the tax related together. That is why we put R&D into this accountant book. As you said, in year 2023, we have the newly added 8 million, because we put this in there and for the tax reduction, of course. It is within the law. R&D is normally for the safety of producing and of the coal. In order to better meet the requirements of the SASAC and the Xinji Group, and further build up the core capabilities to improve the core competitiveness to achieve the high-quality development. In the future, we will continuously expand the technology and R&D cost investment. Especially, we are going to improve the hazard control for coal mines to better achieve the green and efficient development for Xinji Group. You can see that the income is CNY 90 million. CNY 90 million, and there is an increase of around CNY 10 million. Basically, the ROI of the service-related companies is increased. There is an increase of these storage-related companies by CNY 13 million. Your judgment is totally right. The income normally comes from this new energy plant. In year 2023, the capacity. The agreed purchase price has no big differences, but the income increased due to the purchase cost of the raw coal. That is why, due to this structure change, you can clearly see that the purchase cost of the raw coal is reduced. That is why our profits were increased last year. That is why the ROI is better. Distinguished leaders, I am from Founder Securities. I am a researcher. I have several questions, and I wanted to ask the leaders. The first question is, for China Coal, the coal chemical of China Coal, actually this year or the next years, there are a lot of investment on the fossil energy. For coal chemical, I clearly see that you have some further investment in chemical, coal chemical. There would be two impacts. The first one is that capacity will be improved. You can see the oil price is very high. In the future, the price is still high. Basically, you can see the average cost is very high. I am not quite sure about this capacity especially, and the influence to coal chemical. The second question goes to the Shanghai Energy. In this year, you can see the year 2023, this year, there was a huge increasement of the installment of the units. In year 2024, the power generation will be huge. Like some of the leaders said, the coal capacity and the power generation of this, you have got the new layout and the two new energies. How does the company do the balancing? My question is that if the capacity is improved, to traditional energy like coal and the new energy investment, what would be your investment strategy? The first question goes to Mr. Zhang. This is a very realistic question, and recently we are responsible for all those different batches of all the different quantitative projects, and then they are always a large investment there. However, we can already see that for this quantity integral projects, for all those different projects, and then according to my knowledge, because previously I was also doing the job of this petrol finding, in the last few years we have started to do that. The next thing is, we can already see that for this oil refinement one, for this petrochemical one, this is actually having this big problem, cost. I can say that whatever kind of that, for this coal, petrochemical or oil chemical, they all compete about the cost. We can see it's about the coal chemical. The first one is, it is in line with this national strategy because we are also doing all those different coals and we are rich in the coal ones. For all the different projects that we are doing now, they are all based on the original source and for this electricity and the coal, they are all integrated. The next thing is about the high end of the product quality. These have already shown that for our coal chemical, this is about our own competitive advantage. In the end, you can already see for this oil, chemical, and petrochemical, we have already launched a lot. Although they have launched a lot, we require actually a big amount there. For petrochemical, especially for this high oil price, has already brought a very big impact. We are based on our cost advantage and for our overall advantage. For all those product advantage, especially for all those integrated management, we are all having huge cost advantage there. For all kind of product competition, it's all about the cost. This is also like we have this impact, but it's not too big impact. At the same time, we also could have this high quality development as our future direction. Thank you. The second question, we will have this Shanghai Energy, Wang Hua, to answer that. Thank you so much for your question. For the question, I have to say that this is like the traditional energy industry are going to this new energy direction. We have to answer that. For Shanghai Energy and how to hold this old and the new energy transition, this is what we are thinking about. Especially for this coal resources and the traditional energy, we are sticking to our own principle. First of all, you can see for this overall resource, it has to have a very big storage. Second one is about the quality, has to be quite high. The third one is also about this overall region. The place has to be good. Only we satisfy all the different demands for the coal resources, we could have that. It would also make sure that in the future when we have the coal resources, I would have this competitive advantage. Previously, either have this good quality of the coal or have this better competitive edge. For new energy, how to do that? The first thing is we pay attention to this Shanghai Energy as this new energy. This is mainly using our production, and then to develop the PV section. Our advantage is for this Shanghai Energy, we have our own 4D electricity grid, and therefore, all those new PV electricity could be connected to my grid. Then with my own grid, I could also have some other different equipment to transmit that. So for all this, PV basically have already been accumulated, and now we also need to have about 0.2 million kilowatts. We are also expanding about some different expansion. Then we have already got the first batch of the users already over 0.2 kilowatts. So I have to say that for this newly invested for the PV, we also will have this guarantee of that. At the same time, we also have already strengthened the cooperation with the State Grid. Even if I use that, and therefore, this all producer ones can also connect to the State Grid. For the State Grid, we are also having this President Jiang's overall sharing. We have already got this overall plan. So for all these, they cannot be consumed. I could also have this consumption. So for this Shanghai Energy away from there, the key is also to have this all the private entity ones, and then we could go there. So that's all. Thank you, Mr. Wang. Because of limited time, that's all for today's QA session. For all the distinguished guests, just now, for all those, the three different Shanghai experts, they have already introduced the situation. They have already answered all your questions. Because of limited time, I will say that I cannot have a more detailed communication with you. So after the meeting, you could also communicate with this investor relationship department to have this further communication with us. We also will further answer your questions. So for China Coal and for all those listed companies during the development, we have already got all those big support from all the different departments. Now we have already come to this new stage of this China Coal high quality development. We also will strengthen this continuous development to constantly enhance the quality, and then to also have this first-class energy company. Lastly, I would like to thank all the different experts for answering, and I would like to thank you for the participation. China Coal 2023, the group press release is coming to an end. Thank you so much.

Data Source: Quartr Last updated: Mar 21, 2024

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