Earnings Call: H2 2024

Mar 24, 2025

Summary

2024 coal output rose 2.5%, but total profit fell 44% amid weaker prices; attributable net profit declined 1.1% as cost reductions partly offset pressure. 2025 priorities include CNY 21.6bn capex and 133m tons of commercial coal sales.

We look forward to share the results over the last year, and we sincerely thank your support this whole time. The attendees are Mr. Zhao Zhongde, the Executive Director and President of China Coal Energy. Mr. Jing Fengru, Independent Non-Executive Director of China Coal Energy. CFO, Mr. Cai Xiaolin. Vice President, Mr. Zhang Guixiu. Mr. Zhang Yiping, Chief Expert and General Manager of the Coal Chemical Business Unit. Mr. Li Yingpin, Vice Director of Sales and Management. Mr. Zhang Futao, Chairman of the Board at Shanghai Energy. Mr. Zhang Shenbin, Chief Accountant of Shanghai Energy. Mr. Zhuang Jianjun, Board Secretary of China Coal Energy. Mr. Shen Kai, General Manager of Xinji Energy. Mr. Yao Zhishu, Independent Director of Xinji Energy. Chen Maoju, Chief Accountant of Xinji Energy, and also Board Secretary Dai Fei. We will be talking to you about the China Coal results overview and the plan for 2025, and also we will be talking to you about the overview for the three listcos and their plan in 2025. The last section is Q&A. Now, I will have Mr. Zhao Rongzhe, the President and the Executive Director of China Coal Energy, to talk to you about the overview of China Coal in 2024 and its plan in 2025. Thank you very much for your support, everybody, for your support for China Coal and its listcos. I will be talking to you about the overview of China Coal and its listcos, its strategy, industry trends, and our work plans. Firstly, China Coal is a mega SOE supervised by SASAC. We are the only whole value chain central SOE in the coal sector. We have this important mission of securing energy supply. Our main business includes production and trade of coal, power and thermal production and supply, coal-based new materials, and chemicals development. We control China Coal Energy, Shanghai Energy, and Xinji Energy, these three listcos. As of the end of 2024, our total assets were CNY 600 billion and 120,000 staff. We have been ranked as a Level A SASAC company, and we have been ranked among Fortune 500 companies for five years. China Coal Energy is the listco for our main business. It is a large energy enterprise integrating four major lines of business: coal production and trade, coal chemicals, power generation, and coal mining equipment manufacturing. China Coal Energy was founded in August 2006 and got listed in Hong Kong in December 2006, and got listed in A-shares in February 2008. China Coal now has 58.4% of China Coal Energy's shares. For many years, this listco has been ranked among the top 100 companies in China and has been rated as excellent by Shanghai Stock Exchange. Shanghai Energy went public in A-shares in August 2001, and China Coal has 62.43% of its shares and is a comprehensive energy supplier with coal, power, railroads, and energy comprehensive services. Xinji Energy got listed in December 2007. In 2016, 30.31% of the shares got transferred from SDIC to China Coal. China Coal now has 30.37% of its shares. Its main business are coal, power, and new energy. Now I am going to talk to you about our development strategy and our work during the 14th Five-Year Plan. We uphold the four reforms and one collaboration, and we uphold the dual carbon goals, and we shoulder the responsibility as a central SOE and serve as a pillar and cornerstone for energy security. We are accelerating the innovation build-out and are trying to achieve efficiency improvement and transformation for our old and existing, and new business. We are trying to build ourselves into a world-class energy company with modern governance, low carbon development, innovation, and multi energy forms in securing energy supply for China. Firstly is to secure energy supply. We have unlocked over 100 million tons of quality coal, and we are focusing on periods with high energy demand. We are using our concrete actions to secure energy supply to serve socioeconomic development. We are also pushing for the two joint operations and the two hedges. We have breaking records and exceeded 50 million kilowatts for installed capacity for coal power. We are pushing for the forming of industrial clusters in areas with rich energy resources, leading to a high-density value chain. The phase two leading project is going steadily, and the Liquid Sunshine Project is accelerating in Bazhou, and the Wuxue County integration project is going to start construction soon. We have set up China Coal Institution. We have also set up a fund with the National Natural Science Foundation, and we have set up a low carbon innovation center with the Tianjin National Center of Technology, and we are working with colleges and universities as well. We are proactively taking on science and technology projects since the start of 14th Five-Year Plan. We are also trying to cultivate new quality productive forces. We are focusing on smart technologies, and focusing on low carbon transition and liquid sunshine, and also carbon capture sequestration technologies. We are building out a value chain with low coal or no coal, to further utilize CO2 as a resource. We are also investing in coal-based new energy, hydrogen and energy storage. According to the SASAC's requirements, we are using new ways of information disclosure and do a better job managing market cap to convey more confidence. We are also trying to improve efficiency and transformation. We have achieved optimized structure and steady growth as a result. The first four years of 14th Five-Year Plan has seen very good revenue and rank, making us among the Fortune 500 companies. Our financials are better than central SOE averages. Our installed coal capacity, installed coal power generation increased fourfold. We achieved a zero to one for alternative energies or renewable energies. 2025 marks the end of the 14th Five-Year Plan, and it is also the beginning of the 15th Five-Year Plan. Even though we have achieved a lot of results, this year is going to be more complex because we are faced with more risks and challenges. Firstly, there is more negative impacts coming from the external environments and the recovery is still on shaky ground. But the underlying conditions and trends for sustainable growth for China have not changed. The supply and demand in the coal market is still in equilibrium with more positive policies continue to be implemented. There is still ample supply overall, even though there is tight supply periodically. Even though in the short run there is a lot of downward pressure, overall, the equilibrium is still there. At the same time, we need to see that China Coal has a wide diversity of coal types, and it has got a lot of long-term contract coal, and it is faced with a vast domestic market, and its operations are sound. Innovation is strong. We have great potential for joint operations. Despite downward pressure, declining prices and uncertainty in policies, long-term contracts are being strictly fulfilled. Our profitability is better than averages. There is also a strong impetus to reform and innovate. We have been rated as an outstanding company by SASAC, and we are also accelerating our transformation and reform efforts. Overall, we have opportunities and challenges at the same time. We will be upholding the socialism with the Chinese characteristics under the leadership of President Xi. We will be implementing the spirits from the 20th National Congress of the CPC and its second and third plenary sessions. We will be implementing this philosophy of improving efficiency and pushing for transformation. We will be pushing for the two joint operations, the two hedges to enhance our core competency. In terms of our main goals, we will be implementing the five values and the requirements raised by SASAC to achieve steady progress to ensure that our operational performance is sound. We will be upholding safety to enhance our foundation. We will put people's lives at the center and try to achieve zero casualties and accidents by way of detailed safety management measures. We will also set reasonable production and sales targets to try to achieve them. We will be trying to go with the policies and increase sales while being safe and compliant. We will also be improving management capabilities. We will be using different kinds of management modalities to improve efficiency, effectiveness, and cost effectiveness, so as to tap into the potential of growth and value creation. Four, we will continue to reform and finish off the reform efforts. Five, we will continue on this path of the two joint operations and two hedges. We will continue to accelerate the transformation of the company to tackle market volatility. Six, enhancing innovation and scientific R&D to cultivate a new qualitative productive force. We will be implementing the strategy of development driven by innovation, to cultivate productive force of our own characteristics. We will also be managing our market cap to increase our investment value. We will continue to strive forward and upward into 2025 and to use our concrete actions to tackle challenges. We will make our three listcos stronger and make them great examples of the capital market with great performance and integrity. Investors can understand what is going on and have confidence in our performance, and we will also be promoting and contributing to the modernization and economic development of China. We hope that you can continue to pay attention and support our effort. Thank you so much. Thank you, Mr. Zhao. I will be talking to you about the overview of 2024 for China Coal Energy and also 2025 plans. All of the data are according to Chinese accounting standards. Firstly, we have a steady growth in coal production. We are trying to improve efficiency, and we have managed to secure coal supply. In 2024, we realized the production of 137.57 million tons, an increase of 3.35 million tons or 2.5%. Shanxi region increased by 8.69 million tons, and Inner Mongolia and Shanxi region increased 1.72, and Jiangsu increased by 0.49 million. For the type of coal, 2.87 million tons of coal, an increase of 2.3, coking coal 0.48. The company took the initiative to overcome the difficulties and challenges, and try to complete the supply guarantee, and try to improve the fulfillment of the contract. We conducted different methods to improve the revenue and stabilized the market share. In 2024, the sales was 28,284 million tons. It was basically breaking even. For the bought-in trade coal and the import/export and the internal represented or agency coals reduced by 3.83 million tons, down by 2.5%. We actively dealt with the price downfall and we effectively coordinated the safe production and the turnaround to realize the safe, stable and long and full rate and optimized operation. In 2024, coal chemical product reached 5.69 million tons, down by 346,000 tons, down by 5.7%. PO increased by 1,027 thousand tons, up by 1.8%. Urea down by 195,000 tons. Methanol down by 171,000 tons, down by 9%. The sales network was continuously improved, and we continued the improvement of the coordination of production and sales and transportation and the cross-regional coordination. In 2024, the coal chemical product increased. Sales was 5.84 million tons, down by 284,000 tons, and the urea down by 104,000 tons, down by 4.9%, and methanol down by 203,000 tons, down by 10.6%. For the lean management, we continued the organization of the product. We also improved the efficiency and the sales cost was down by a lot. The unit cost of a coal product was CNY 281.73 per ton, down by CNY 25.28 or 8.2%, and the amortization and depreciation was down by CNY 6.98 per ton. We also added the base number of the production and the reservoir amortized base. The cost was down. The maintenance was down by CNY 2.23 per ton. For the freight cost or transportation or the warehousing or port, was down by CNY 4.33 or 7%. The proportion of the self-produced coal in the overall coal sold was down. The other cost was down by CNY 14.71 per ton, down by 48.3%. There is still some balance of the special fund of the safety fees and the maintenance. Affected by the raw coal and the fuel coal purchase price, the sales unit cost was down. PO cost was CNY 6,200 per ton, down by CNY 137. For methanol, CNY 1,779, down by CNY 110. For the turnaround, it affected urea by CNY 1,656. For ammonium nitrate, it was CNY 1,315 per ton, a year-on-year decrease of 11%. The product price followed the market fluctuation. In 2024, the average price of long-term agreement coal in the port was CNY 701 per ton, down by 1.82% year-on-year, with the highest price CNY 710 in January, and the lowest CNY 696 in December. Average spot price of 5,500 kcal power coal in the port was CNY 863, and the highest price of CNY 931 in February, lowest CNY 794 in December. The average selling price of the company's self-produced commercial coal was CNY 562 per ton, a year-on-year decrease of CNY 40 per ton, 6.6%, and the price of power coal was CNY 499 per ton, a year-on-year decrease of CNY 33 per ton or 6.2%. The coking coal was CNY 1,254 per ton, a year-on-year decrease of 9.5%, and the sales of bought-in trade coal was CNY 583. The decrease year-on-year was 9.5%. Polyolefin was CNY 6,991, a decrease of 1.2%. Urea sales was 2,047, down by 15.5%, and the sales price of methanol was CNY 1,757, up by 0.5%, and ammonium nitrate was CNY 2,054, a decrease of 12.3%. In the case of the downward trend of market price coal chemical and other major products, the company has strengthened its operation and management, and also continued to maintain a high level of profitability. In 2024, we realized a total profit of CNY 31.58 billion, down 44% year-on-year, realized net profit attributable to shareholders of parent company of CNY 19.323 billion, down 1.1% year-on-year. Consolidated gross profit margin 24.9%, year-on-year decline of 0.2%. Net cash flow from operating activities amounted to CNY 34.14 billion, year-on-year decline of 20.5%. Basic earnings per share CNY 1.46, down 0.7, and a weighted average return of net asset 13.01, down by 1.2%. The changes in total profit in 2024 are the follows. The main profit-gaining factors. First, the decrease in unit cost of sales self-produced commercial coal increased by CNY 3,486 million. The finance cost decreased by CNY 600 million, and the financial business increased profit by CNY 89 million. The main profit-reducing factors, the self-produced commercial coal price fell down by CNY 5 billion, and the investment income decreased by CNY 441 million. Taxes and surcharges increased by CNY 299 million. Provision of impairment increased by CNY 285 million. Power generation heat supply decreased profit by CNY 130 million. Coal mining equipment decreased profit by CNY 71 million. At the end of 2024, the total asset amounted to CNY 357 billion, up 2.5%. Shareholders' equity attributable to parent company, CNY 151 billion, up 4.4%. Gearing ratio 46.3%, down 1.4%, and the earnings per share is CNY 11.46 per share. In 2024, the company will focus on giving full play to the advantage of coal power and chemical industry chain, promote the regional integrated management, optimize the regional structure. We also organized the market and tried to start and accelerate the transition. The full life cycle of coal facilities was implemented, and we realized the growth of 6.6%, and for the contract signed, the cumulative value of 2.0% year-on-year. We also had the innovation of financial business and made comprehensive efforts in enriching product design. We also got the title of Advanced Collective Central Enterprise by Ministry of Human Resources and Social Security, MHRSS. Our asset size exceeded CNY 100 billion for two consecutive years. Gross profit of 62.4%, up 5.2%. In 2024, company's capital expenditure plan closely centered on coal chemical, power, new energy, and coal mining, including capital projects, equity investment, technological transformation, and renewal of investment in three categories. In 2024, the expenditure plan totaled CNY 16 billion. During the report period, a total of CNY 15.2 billion was completed, 95%. The Libi coal mine and coal preparation plant project will complete an investment of CNY 1.2 billion. The project is under construction and expected to come into operation in 2026. Weizigou coal mine and coal processing plant will complete the investment of CNY 380 million in 2024, with a cumulative investment of CNY 2.79 billion. The project is under construction. For Pingshuo, Antaibao 2x350 MW low calorific value coal power generation project completed CNY 268 million in 2024. Urumqi 2x60 MW power plant project will complete investment of CNY 437 million in 2024. It is expected to be put into operation in 2027. Shaanxi Yulin coal chemical industry phase two is expected to be completed in 2026, and we will have a one-time, one-go startup. For Liquid Sunshine Project, it will have a total investment of CNY 749 million, and it is in construction, and it is expected to be put into use in 2026. In 2025, the CAPEX will be mainly in coal chemical, coal power, new energy, coal mining equipment. The annual CAPEX is planned to be CNY 21.6 billion, an increase of 41.7% compared to the previous year. The main projects, for example, for equity, is CNY 415 million. For tech revamp, CNY 600 million. Information technology, CNY 1.728 billion. For the coal and coal chemical, coal segment was CNY 8 billion, and the coal chemical, CNY 8.6 billion. Coal power, CNY 1.3 billion, and new energy, CNY 2.691 billion. We will make effort to build the technology incubator and energy low carbon innovation center and try to focus on the low carbon transformation. In 2024, we got 47 progress awards above the industry and 276 authorized patents in 2024. We will deeply integrate the digital transformation with the production and the operation of the enterprise and put smart control platform online for trial operation. We are trying to make breakthroughs in stimulus policies, and we will try to have a perfect closure of this period and try to maintain the position in the top of the list of the top 100 listed companies in China. We have been awarded the grade A rating for information disclosure by Shanghai Stock Exchange for 15 consecutive years. 10, stabilization of safety and environmental protection for the better, deeply implemented the idea of ecological civilization and effectively fulfilled the ecological environment production responsibilities. In 2023, the company invested CNY 3.21 billion in environment production without any environmental emergencies occurring. We have always adhered to the safety concept of people first and life first, and we always controlled and remitted the major safety risks and try to improve the inherent safety. In 2024, production safety cost was CNY 3.27 billion, and the overall safety situation was stable. We persistently gave back to shareholders. In 2024, company paid a special dividend of CNY 1.5 billion and an interim dividend of CNY 2.936 billion, totaling CNY 4.436 billion. In order to share the benefit with the shareholder, in the year of 2024, we plan to pay 35% of the net profit attributable to shareholders of the listed company of CNY 18.156 billion. So per share, we will pay CNY 0.258. We have accumulatively paid out CNY 44 billion, maximizing the interest of our shareholders and sustainable development of the company. Looking forward in 2025, we will continue to focus on the efficiency and transformation to drive our value through innovation. Our plan is to achieve 133 million tons of commercial coal of sales, 1.34 million tons of polyolefin, and 2.05 million tons of urea. We will continue to exert more control and fine management to ensure stable revenue, both stable top line and bottom line. Specifically, we will be focusing on safety and enhance the foundation of control the risks. Second, we will continue to focus on excellent operations. Third, we will accelerate innovation. Fourth, we will accelerate the progress of the key projects. Fifth, we will control major risks to ensure sustainable development. Six, we will manage our market cap to improve our governance capabilities. We will continue to work hard to build ourselves into a top-tier energy company to maximize returns to the shareholders and our investors. Thank you so much for your attention. Thank you. Mr. Zhang Futao, the Chairman of the Board for Shanghai Energy, will be talking to you about their overview into 2024 and plan in 2025. Distinguished Mr. Zhao, guests, ladies and gentlemen. 2024 was an important year for achieving the target asks for 14th Five-Year Plan, and we have been upholding socialism with Chinese characteristics with the leadership of President Xi, and we are trying to improve efficiency and transformation, and we are implementing one, two, three, four, five strategy. We also led our staff to work really hard to improve our core competencies, to improve our quality and efficiency. Now, I am going to talk to you about our performance in 2024, the accomplishments, and our future plans. Firstly, we enhanced the coordination between man production, transportation, and sales. Despite the weak market conditions and the challenges, we completed our budget goals. 2024, we produced 6.27 million tons of commercial coal and 4.353 million tons of clean coal. Power generated was 3.82 billion kWh, out of which 370 million was from renewable energy. Net profits were CNY 716 million. Total profits were CNY 880 million. Total assets were CNY 19.69 billion. Net equity was CNY 12.81 billion. Debt-to-asset ratio was 35.17%. Coal generated CNY 6.29 billion of total revenue, accounting for 67%. Power was CNY 1.96 billion, accounting for 20.9%. Aluminum processing revenue was CNY 960 million, 10.2% of total revenue. The comprehensive services, CNY 180 million, 1.9% of main revenue. We are improving our management capabilities, and we have taken measures to optimize our costs. Compared to the budget, the cost of raw coal production and coal cleaning power sales were down by CNY 21 per ton, CNY 1.7 per ton, and CNY 0.8 per kilowatt hour respectively. We also reduced admin expenditure, achieved a tax relief, which accounted for CNY 15 million of savings. We also achieved a replacement value of CNY 110 million. To enhance the coal quality management, we achieved CNY 230 million of additional revenue. By expanding our presence in north ports markets, we acquired four new quality customers, and sales increased by 290,000 tons. We also achieved a capacity charge of CNY 60 million and sold 4 billion kilowatt hour of power. Second, we continued to reform, and we replaced and reduced 107 people. We hired 104 underground technicians and operators. We also hired 98 undergrad students fresh out of college, and we moved people to underground posts. Revenue ratio among the three business lines of coal mines were 1.92 to 2.91. 102 ground staff proactively took underground posts. The tenure and the contract-based system covered all managers. We were ranked as excellent by SASAC. We got grade A ratings from Shanghai Stock Exchange. We are also accelerating the progress of projects, and we are firmer in terms of transformation. The grid integration of renewable energy project has pretty much completed. Three projects have been integrated into the grid. They included the 263,000 kilowatt PV project, 40,000 kW PV project, and a 1,300 kW distributed PV project. The Longdong area is also ready to be integrated into the grid. The renewable energy there reached 473.9 thousand kilowatts. We signed the land lease for phase two PV project with 204,000 kilowatts and 3,580 mu. We finished project initiation filing, and we signed a carbon sink project with Hebei Weixian Wei County government. We also completed the permanent drainage system for Weizigou mine. We also doubled down on technological innovation, which has been put as the top priority of ours. We invested RMB 380 million, with an intensity of 3.7%, and we achieved 26 science advancement awards, 40 patents, 12 of them were invention patents, eight reached international advancement level. We also invested RMB 160 million to build the two plus 12 intelligent mining phases. We also smartly swapped out 140 people from underground. We also got approved for our disruptive surveying technology. We also reduced coal gangue by 30%. We also increased our returns to the shareholders. Since our listing, we have been paying out cash dividends for 20 years amounting to RMB 3.621 billion, 4.13 times of our raised capital. We paid a cash dividend of RMB 145 million in 2025, and this was our first interim dividend payout. On the basis of this interim dividend payout, we paid another RMB 145 million. Specifically, it was RMB 2, tax included, per 10 shares. So together, we paid out RMB 290 million in cash dividend in 2024, accounting for 40.4% of our profits. We have also formulated our market cap management and valuation improvement plan to keep improving the investors' confidence in us. Fifth, our future plan. The overall philosophy is to improve efficiency and drive transformation. We will continue to insist with the 1-2-3-4-5 strategy. We will be rooted in the two joint operations and the two hedges. We will be building out our three bases and upholding our four principles and enhance the safety, stability, efficiency, transformation, innovation, and leadership. By doing all these, we will try to transform ourselves to achieve new heights. For Jiangsu headquarters, we will try to stabilize output at 7.29 million tons per ton. This is a supporting zone and pilot zone for us. We will build a national base for clean energy and ecosystem governance for our subsidence area with over 1 million kilowatts worth of coal reserves. We will try to build another couple of grid integration demonstration bases, and use CO2 as a resource, and also develop underground space and other future industries. For Jiangsu and Shanxi, these are our strategic reserve zones and development acceleration zones. We will try to have another coal output of 12 million tons per year to 1 million kilowatt coal power projects and over 1.5 million kilowatts of renewable energy installation. For Xinjiang base, we will try to get our hands on quality coal projects with our two mines. We will try to have 2 million kilowatts plus of renewable energy. We will try to build Xinjiang into a comprehensive energy demonstration base. For 2025, it is going to be the last year of the 14th Five-Year Plan and also an important transitional year for us. We will be upholding the Xi Jinping thoughts and implementing the spirits of the 20th National Congress and the third and the second plenary session. We will be upholding all these philosophies and uphold the red lines of safety, environmental friendliness, and integrity, and also stabilize our workforce, output and operations. We will also be continuing to optimize our costs, focusing on nine areas, including HR optimization, wage reform, marketization, tenure and contract-based management, disciplinary integration, and major risks control. We will also try to achieve eight goals, including improving our operations and achieving excellent status for our management, and also achieving all of the safety production standards, so as to finishing off the 14th Five-Year Plan and having a great start for the 15th Five-Year Plan. Ladies and gentlemen, we are having so much results, and great achievements. We cannot do this without your support and help. We do pay a lot of the cash dividends. We hope that the patient capital can grow with us. We would like to use this earnings report to get your opinions and recommendations. We will continue to grow and learn and strive forward and upward to achieve intrinsic growth and innovative development so as to improve our market recognition and value creation. Our ultimate goal is to create more value and returns for our investors. Thank you all. Thank you, Mr. John. Mr. Shen Kai will be talking to us about the performance in 2024 for Xinji and their plan for 2025. Distinguished investors, good afternoon. First of all, very happy to be here to hold the performance release for the New Energy. I would like to extend to all of the friends that cared about and supported us, I would like to extend the heartfelt gratitude and greetings. 2024 marks the 75th anniversary of PRC and also the 35th anniversary of the new mining zone. With the leadership of the party organization of China Coal, we always deeply learned and studied the 20th CPC and the 20th second and third plenary session. We adhere to the spirit of hard work and dealt with multiple challenges of the downward trend of the coal market. We finished the production indexes and targets. We formed the stable and good situation and momentum. We used our undertaking and wrote the new chapter of the New Energy company. For 2024, the performance release. In 2024, the commercial coal production was 19 million tons. Sales was 18.8 million tons. Power generated, 13 billion kWh. The sales was 12.3 billion kWh. The revenue was CNY 12.7 billion. The profit was CNY 3.7 billion, up by CNY 290 million, 8%. Net profit attributable to parent company, CNY 2.4 billion, up by CNY 280 million, 13%. The total assets of the company at the end of 2024 is CNY 4.7 billion. The debt was CNY 27.3 billion. Debt asset ratio, asset debt ratio, 61%. The ride attributable to parent company, CNY 15.6 billion, up by 15%. Earnings per share, CNY 0.92, up by CNY 0.11, 13%. The completion situation of the key work in 2024. First, we consolidated the foundation of the enterprise. The commercial coal production was stable. Power generated hit historic high. The quality of the coal was 4,468 kcal per gram. Compared to the budget and compared to last year, we both improved and offset the market price downward trend and its impact on the business. The profit ratio was up by 2.9%, higher than the peers. The productivity was up by 7.6%, so we improved the profit and the five rates. Second, we also deepened our reform and innovation. Around the decisions that we made, we perfected the 113511 governance system. The advantage of the system translated into the governance efficiency. The contract-based and term-based management covered all of the functional department and the management personnel. We also improved the marketized talent system and mitigated the issues of the hardship of introducing talents and also hardship of introducing the coal business. We also provided sound support and guarantee for the transformation. Third, we also stabilized our transformation and transition. We grasped the opportunity of regional advantage and also seized the opportunity to promote the two joint businesses. We had the three synergies of coal, power, and new energy. We took leapfrog development as a comprehensive enterprise of energy. For the five coal wells and for the coal industrial safety group and the safe high efficiency wells, we maintained four power plants in parallel. We also realized the completion rate of the investment of more than 100% of the three power plants in Shangrao, Chuzhou, and Ziyuan. We also displayed our sense of undertaking and responsibility. We fully implemented the supply guarantee of the energy. We also responded to the call of the rural revitalization policy. We improved the five helps and assistance. We cumulatively invested CNY 4.99 million, helping the locals to improve their living standard. Fifth, the livelihood projects were more improved. We went deeper and wider and tried to benefit our employees and improve and enlarge the scope of our welfare for the employees. We increased the investment in the health check program for the employees. We also initiated the mutual help insurance. We also sent gifts for the summer and wintertime for the employees. We solved a lot of issues for the people in our enterprises. For the major work in 2025 is the closing year of the 14th Five-Year Plan, and also the planning year of the 15th Five-Year Plan. We took the responsibility of the energy supply guarantee, deepened reform, and low carbon transformation. We also are faced with market change and the new situation of improving the quality. We have to avoid being complacent. We need to take a new posture to receive the challenges. We need to be stable with improvement and improve our industry layout and improve the development quality. We want to promote the two joint businesses and try to have the two hedges and try to have the synergetic development of coal, power, and new energy to finish the 14th Five-Year Plan targets. We also build a sound foundation for the 15th Five-Year Plan. First, we need to continuously strengthen the safety management and try to safeguard the stable production. We will take the three-year breakthrough project of work safety as the main goal and try to target the six-three work requirements and try to focus on the disaster treatment and the process control and the shift construction. We also the cultural building to try to go stricter, deeper, and more refined safety management. Second, we have to be scientific in terms of optimizing the production management to try to improve the quality and the efficiency. We need to center around the stabilizing the coal and improving the power and try to improve both the quality and quantity and the efficiency to realize the higher level of production management. Third, we need to actively promote the enabling by innovation to try to improve green development. We need to use scientific innovation and smart construction and green capacity as the breakthrough point and try to nurture new quality productive force. We need to adhere to the direction of safe, smart, green, and highly effective to improve the capability to enable the development. Four, we need to improve the control and improve the efficiency and quality. We need to do refined management, try to improve the efficiency and try to benchmark against the first-class enterprises and try to improve the efficiency and try to take the potential and always be efficiency-centered and try to be refined in three and strong in two and improving in five. Fifth, we need to be very careful about our schedule and speed up the transition. We have to take advantage of our coal resources and implement the two joint businesses. We will try to stabilize the coal and expand the power and try to expand the new energy so that we can stabilize the process of our transition. Six, we need to deepen the reform and try to guarantee the perfect closure of the task. We need to finish the requirement raised by SASAC and China Coal and try to realize the tasks in the 200 lists and try to be very consolidated in the reform and try to realize high quality closure. This year is an important year bridging the last and the new five-year plan. We will try to speed up the thermal power plan schedules and try to explore in coal, power and new energy and try to build the multi-energy, mutually complementary, green, low carbon, smart, highly effective system, with modern governance. For the new energy company, all of our employees will remember our task and try to move forward, improve the development quality, and actively contribute to the healthy development of the capital market, and try to return to the shareholder and investors with our outstanding performance. We look forward to cooperate with investors and friends that cares about our company and share our result of the high-quality development. We wish you good work, good health, and all the best. Thank you. Thank you, Mr. Sun. Next, we will come to the Q&A. We will have the online and offline Q&A, and we will try to answer the questions here first, and then look at the online questions. That lady at the back, please. Dear leaders, I am from Huatai Securities. My name is Marlon Chen. Very glad to participate in this release by China Coal. I have two small questions. I want to ask the leaders first for the production of the company. In 2024, with the release of the capacity, actually the production had some increase, and also in Inner Mongolia and Shanxi, there is respectively 1 million ton increase. Where is the expected growth of production coming from in this new year? The second question is for the dividend. I believe that this is an interesting topic to a lot of investors. In 2023, we increased the special dividend. If we calculate the rate, it is now up to 37.7%. In 2024, if you add the year-end dividend, now it is 33%. Actually it is kind of like a decrease. But we also saw that in 2024, the debt with interest was down by 91%. I just want to ask about the future allocation of funds and for the dividend payout ratio, is there any possibility or room for further increase? For the central enterprise or SOE, the market value, management, and review mechanism, is there any new plans for that? Okay, thank you. Let me answer the question about the production in 2025. We disclosed the 2025 production plan, and of course, that is our goal. According to the business results, normally the production at the end of the year would be higher than the plan. That is the big direction that we are headed. Secondly, if we look at the current situation, Dahaize has already reached the nameplate scale, and there is only limited room for improvement. In 2025, we have Libi and Weizigou that is still in construction. They will not be finished. We will still rely on the stable operation of the existing mines to stabilize the production in 2025. That is the overall plan. Then I would like to invite our CFO to talk about the dividend. Let me introduce to you about the dividend. If you are paying attention to the company, in the last few years, I think there is one characteristic about the dividend. We always maintain stable, continuous, and foreseeable as the three principles. For the stable. When IPO, we made the commitment that it will not be lower than 20%-30% of the income that we can dispose. We always try to reach the highest ceiling, which is 30%. Last year, considering the market and also the expectation, and also we took a look at our cash, we improved or increased the payout ratio. That's stable. Then continuous or sustainable. That means we want to maintain this momentum of sustainable and high-quality development. If you look at 2017, the profit attributable to your parent company was just 24. We just paid out 7.2. Last year, as you said, is 33. Actually, the attributable part was on 19.2 billion, and actually the payout was 6.2 billion. Percent is very important, but whether a company can sustainably develop to continuously give back to the shareholders, that's even more important. I'm just emphasizing our stability and how we are always on the path of sustainable development. That's the basis for dividend payout. The third is anticipation or foreseeability. You have been tracking our prices, production capacity, and output. Of course, you would have certain anticipations of our performance. Our payout will not be 30% less than your anticipation rate. Whatever happens, we will definitely try to shoot over your anticipation, not under it. The payout is going to be sustainable. I will stop here. What was the last question? Last question was regarding the arrangements for market cap management. Mr. Jiang speaking. We focus on improving our operational and managerial capabilities. In terms of our stock prices, we are trying to enhance our operational foundations to enhance the returns for the shareholders, and that's the basis for the market cap management. Of course, we noticed that if you track China Coal for the longest term, be it CSRC or SASAC, they have issued guidelines on how to go about managing market caps. We will definitely be implementing these guidelines. Right now, we'll be focusing on improving our operations, ensuring the stability of our performance, and also to meet the anticipation of our shareholders. Of course, in some sense for payouts this year is 35% on the basis of 2024. That was actually a direct response to market concerns or investor concerns. Hello, company management. I'm from Tianfeng Securities. My name is Jiuzhong. I have two questions. First, in your CapEx plan in 2025, the figures are pretty high. Could you talk to us about the use of the proceeds, the CapEx, and the timelines? Second, will this high CapEx put pressure on dividend payout? For example, will dividend ratio come down vis-a-vis 2024? Thank you. Regarding CapEx, your question was regarding what was the new addition for, right? Yes, and also the timeline or an expected timeline of when the CapEx will happen. Sure. I will answer the first question regarding the CapEx growth. Yes, indeed. CNY 21.6 billion is an increase from 2024. Firstly, we are accelerating the two joint operations projects, and also there are a lot of renewal projects. They are entering a critical period. So for CNY 4.8 billion increase for the renewal projects. The Libi project increased by 27% with CNY 1.7 billion. Yulin phase two, it is going to be CNY 6.5 billion, and that is an 83% increase. For Liquid Sunshine, it is going to be CNY 1.8 billion additional in CapEx and it will be a growth of 80%. For these ongoing projects, there have been a lot of increases compared to last year. Also, we are using a different basis of statistics. When we were formulating the 2025 CapEx plan, the CNY 1.728 billion of IT spend was also included. As to the growth, Libi mine is a 4 million ton mine expected to be constructed in 2026. Weizigou is in Xinjiang and will also become operational in 2026. For Antaibao Power Plant, it is already in production, and the Wushenqi project will become operational in 2027. The Shaanxi Yulin should become operational by the end of 2026. For Liquid Sunshine, it is hydrogen plus CO2 converted methanol. This is expected to become operational in 2026. That is basically it for all of the major projects. Thank you very much, management. I am from Changjiang Securities. My name is Shaoyong. I have one question regarding the industry and three questions regarding the company. Coal prices have come down by a lot recently. The 675 prices have fallen below the benchmark price of 675. Will that benchmark price change? What is your take? Regarding China Coal, this question is for China Coal Management. You did a good job in Q4 in terms of cost controls. Will there be further room for cost reduction in 2025? Another question is for Xinji management. Right now, the power unit installation and construction is going very fast. After that is finished, what will we be using the cash reserves for dividends or for new coal projects? For Shanghai Energy, my question is for Mr. John Zhong. Mr. John, you said we are going to build another project. Aside from the planned coal production, do you have other measures that you are going to take to build another project that is of an equal size of Shanghai Energy? There are a lot of questions. The first question will be addressed by Mr. Guoshu and Mr. Yin Ping. Thank you for your question. Regarding the 675 price structure, you are a little concerned. The coal industry has been around for many years. We are all very familiar with the 675. It is a result of the negotiations between the coal and the power industries, and so this is the benchmark prices. From the perspective of the coal and power industries, the 675. For long-term prices, it is 686 and the spot price is 682. I think the chances of adjusting the 675 structure are pretty low. That is of course, based on our judgment of the overall industry trends. I do not think there will be a large adjustment there. This benchmark price system will not be adjusted. It does not look like there will be. Regarding costs, Mr. Cai will take the question. Mr. Cai speaking. Costs are always top of mind for our investors, and the same can be said for ourselves. We are constantly controlling costs, and using up-to-date measures to control the costs. When people ask questions, they always ask about costs, and we need to keep our costs as controllable and stable as possible. Right now, our revenue is for CNY 140 billion. Of course, there is further room for cost reduction. This year, we made a lot of efforts. For example, for the self-controlled projects, we used a centralized data platform, Middle Office, to oversee all lines of business. This Middle Office or this platform, controls all units to generate more value and optimize costs. We designed 100 plus models in order to drive cost downs. Specifically, when it comes to costs, we will be building out a modern supply chain to reform our purchasing efforts. You all know that for every 1% reduction in purchasing costs, the contribution to the bottom line is multiples. We will be using AI and digitalization to drive cost downs. With this Middle Office, it is easier for us to standardize a lot of the procedures. We are basically digitizing and smartizing our processes. Of course, our revenue will become larger, maybe much higher than CNY 140 billion. On the other hand, why do I stress the full lifetime value? We have to worry about ESG environment, social responsibilities. We have to follow the national policies closely. On this front, we will be enhancing investments on all fronts to ensure sustainable growth. For the costs, you need to look at it from multiple aspects. We need to continually to drive value. As long as we can do that, the cost structure should be reasonable. The third question will be addressed by Mr. Chen. Thank you very much for the questions from that researcher from the Changjiang Securities. Your question is regarding anticipation for dividend payout going forward. For the coal power units that are under construction, there is Xiangyao, Lu'an, and Chuzhou. These 3 projects will be integrated into the grid gradually. As of mid-2026, we will be formulating the 15th Five-Year Plan and exploring potential new projects. After these units are built, in terms of dividend payout policy, we have been upholding long-term, stable, sustainable returns of profits to the shareholders since our listing. It grew from CNY 0.10 per 10 shares in 2018 to CNY 1.6 per 10 shares in 2022 rather. From 2022 to 2024, cash dividend accounted for 18% and 17%, about over 30% of profits available for dividends. Of course, this is lower than China Coal's figures, and we acknowledge that. As for the future plans, we will be basing our efforts off the 15th Five-Year Plan and be rooted in our sustainable development. We will continue to enhance our core competencies and make our main business stronger. With a careful analysis of our operations and the cash reserves, and on the basis of the 15th Five-Year Plan, we will uphold the principle of protecting shareholders' rights, and we will also be considering sustainable development of the company, and we will definitely factor into reasonable returns to the shareholders. We will sustain a stable dividend policy to the shareholders. Mr. Zhang will be addressing the question addressed to Shanghai Energy. I should say that for Shanghai Energy, it is an old enterprise of 40, 50 years. With our exploration, our production base is also migrating outwards. Now in Xinjiang, we have a mine being constructed. For the mine being constructed, that is expected to be commissioned in 2026. This target of rebuilding Asia, I think we need to do several things. The first is our headquarters space. For the headquarters space, the current method is to stabilize our productivity and headquarters. Now it is 7.29 million tons. It is providing some guarantee for us to migrate and to expand, and also provide the talent pool for the new base. For the headquarters base, the advantage is that we have our own network for the incremental volume for substation. We want to build the comprehensive energy service company. We have the integrated project of storage and generation. Now, 49 MW was already built, and in 20.4 thousand kilowatt. For the substation network, we also built the virtual power plant, which is already established as a project. For the CO2 capture and utilization, we are doing some early-phase preparations. For the existing land of the headquarters, we are also trying to utilize the resource. We are trying to find some industry projects that fit that piece of land. Because the headquarters has very good business environment and very good conditions, and we have the green power and our own grid, and our power price is pretty low, and we have our reserved land, we have a very mature industry supply. We want to consolidate further our headquarters base so that we can build a foundation for the industry migration. The other is about the Gansu base. Our affiliated company, Dacheng Coal Power. We are doing some preparation with them. As requested by the group, we want to migrate our main business. For the prospecting right, we are also following up the exploration there. We will form a capacity of 12 million tons to 15 million tons. That is for the coal production capacity. We will migrate it outwards. We will also match it up with the coal power and the new energy facilities there. The third is the Xinjiang base. For the Xinjiang base, we will further expand the capacity. For example, the Weizigou Coal Mine. The plan was already approved, and we also made some adjustments. For the mine production scale, it was already reported to the National Energy Administration for approval, and we will also adjust our scale. For Tianshan Coal Power, we also will adjust the capacity there. For the new energy electricity, we will also make some new deployments for Songjiu Baihe mine area. The coal there is quite rare. Low ash, low sodium, low sulfur. Very good for coal chemical industry. We are doing some early phase survey and study. To rebuild Xingdaochu, that is our task and our goal for Shanghai Energy. Around the target, we will try to accelerate the implementation. Thank you. Thank you, Mr. Zhang. Please. My name is Suguo Peng. I have two questions. First is about the chemical segment. Since beginning of 2025, we saw some fluctuation of some chemical product, for example olefin and urea. Actually, the price was lower than the previous. Considering the cost down of the raw coal. I just want to ask about the business situation of the chemical segment and also any methods for improving the efficiency. That is for chemical. The second question is about cost as well. Just now, some other investors asked about the cost control of the listed company. I saw in 2024 the reports, I think the unit cost relevant to chemical, they all went down. Just want to ask the two companies in terms of your cost control. Thank you. For the chemical, Mr. Zhang Yiping, our chief expert. Let me answer about the chemical part. In 2025, as you said, you noticed that for the olefin or urea, the price went down. But for the coal price, the raw material is also going down. In chemical segment, since we conducted lean management, we try to mine our potential. From January to February, it seems that we maintain very good profitability. It is due to several aspects. First, for chemical segment, we have been in this segment for more than 10 years. Now, we have a very refined management. It is deeply rooted in every enterprise. Second, we control very strictly the production cost, and all enterprises went into much detail when they calculate the cost. Third, for the chemical segment, after 10 years of accumulation, we already congregated a batch of management personnel. In management, we are always seeking excellence. In material consumption and energy consumption, we also went to the extreme. For olefin or urea or other products, especially for polyolefin, we are promoting the high-end nameplates or high-end grade to sell at better price in the market. Then maybe Shanghai Energy first. Thank you for the question. I think I can answer your question from several aspects. First, for the raw coal cost of Shanghai Energy in 2024. Compared to the same period in 2023, it was down from CNY 510 to CNY 476. It is a big reduction. Actually, Shanghai Energy has an old mine, and for our fixed cost, it is pretty high. Labor, material, and depreciation, around 70% of the cost. Basically, it is a lot of pressure to push down the cost, but I think we always have this awareness that every part of the cost is reducible. First is to improve efficiency, and we try to mine the high heat value coal and try to improve the production efficiency. The second part is that on the cost side, we went from three perspectives. The first is to establish the standard system. Mr. Chai already talked about it. The second part is about the special campaign of maintenance. We set up the KPI for price down to improve in those key areas. The third is to strengthen the procurement cost control throughout the process, and try to establish a mechanism to utilize the waste or the legacy equipment. In terms of efficiency, being an old enterprise, we still want to control the cost, and we want to treat that as one of the key words that we are doing. That is my answer. Mr. Peng. Thank you. For your attention to us. I think for the cost management of the enterprise, it is something that a mature enterprise must rely on for survival. For the day-to-day management, it couldn't have been achieved without the control of the cost. For coal chemical enterprises, the cost of the coal, its management, it is actually more complex than coal power, and it is harder. So for the coal producer, Xinji is in East China, so actually it is just like Shanghai Energy. We have a very complex situation on the coal bed, and it is harder to explore. So for Xinji, for our company, we always try to have the cost leadership regionally. So with the same system, which is the standard cost management system, we start from the source, and we have total management of the whole process to realize the effective control of the cost. So to control from the source, that means we will start from the design phase. We went from the design of the layout and the selection of the equipment and the choice of the processes to control the source of the cost. Therefore, process control is mainly reflected in the implementation of the exploration and also the improvement of the efficiency and the utilization or use of the equipment and the maintenance of the equipment. So we will control the cost in all those areas. For total management, it means for all of our staff. Based on the process management, from the source of the exploitation to the transportation, to the washing of coal, to the management organization, we realize the total management of the cost and improvement of the awareness of all staff. So we can conduct the whole process management of a period of time for the coal. For our company, in raw coal and commercial coal or product coal, our result of our management is pretty clear. In 2024, for the product coal, the volume actually was down year-on-year, and the unit cost was actually cheaper compared to the budget as well as the same period last year. Then for power. Since for power plants, they are mature factories, the key of cost control is to reduce coal consumption. So from the design of the generator to the process control, to the raw coal quality and fuel coal quality control, to reduce the consumption so that we can control the cost of power segment. I believe that through our company's effort, through our collective effort, coal and power segment cost and the unit cost will definitely be controlled within our expectation. We can definitely realize the continuous stabilization and improvement of our performance. Thank you. The lady from the third row, please. Thank you very much, management. My name is Li Miao from Dongfang Caifu Securities. I have two questions. The first question is regarding shareholder returns. I saw that for Xinji and Shanghai Energy, both companies issued the action plans to improve returns to shareholders, and Shanghai Energy launched the plan for improving market valuation. These are very detailed plans, but when we talk to investors tend to think that both companies are pretty depressed in terms of their stock prices on A-shares. Will there be proactive actions on the part of the management, especially when it comes to increasing of stock holdings, which happened with the China Coal in 2023, and also will there be any repos? With the depressed share prices going on right now, will there be proactive actions like that? That was my first question. Second question is regarding Xinji Energy. Since last year, there has been a lot of attention on the coal power integration projects on the part of Xinji, but the downward trend of power prices witnessed since last year made people worry about the sustainability of the company. For the power prices in Anhui, what was your outlook on that? "And what are your measures going to be? Thank you very much for your attention," said Mr. Jiang. Yes, indeed. The China Coal Group did launch a plan to increase holdings, and it has been implemented. As of now, we haven't received any further plans to increase holdings. Of course, I understand, in order to sustain share prices, to maintain the share prices to be higher than earnings per share, we will be focusing on our operations and other aspects to take comprehensive measures. It comes down to solidifying our operational foundation, improving our profitability to provide the basis for long-term and sustainable growth of our business. That was to your question regarding whether there will be any further plans to increase stock holdings. Mr. Wang will be taking the second question regarding Xinji. Thank you very much for your attention. We uphold the new energy strategy of four reforms and one collaboration, and we uphold the dual carbon target, and we're pushing for the two joint operations, especially when it comes to the coal power integration, which is one of the joint operation. We control four coal power projects. One is phase 2 Banji. The second is the two 1 million for Shangrao, and also two units for Chuzhou, and also Lu'an. The projects, all of them, are going very smoothly. Just now, you were asking about now we're using spot prices, what will that have in terms of impact on us? We're faced with both opportunities and the challenges, especially for Anhui Province. We started doing a pilot project for spot prices starting January 2025. At the beginning of this year, NDRC and the National Energy Administration launched a notice regarding the reform of power prices. Basically, document number 136. Since the issuance of this document, the renewable energy generated power will be marketized fully. Since January 2025, Anhui power market started doing this pilot project using spot prices. Right now, we are seeing that the prices in the long term have come down. The spot price market in Anhui is just starting, and there's still a lot of room for improvement. For the existing power capacity and the incremental growth, there might be some impact, but I believe as market gets more improvement, things will get better. Thank you very much, Mr. Wang. For the interest of time, we will answer the last set of questions. Thank you very much. My name is Gaoshin from Minsheng Securities. Congratulations on achieving such great results, and thank you very much for your efforts. I have a question regarding industry. China Coal has a capacity of 300 million tons, accounting for raw coal is about 6%, and you have gone through the entire coal cycle, basically. What's your take about the transition from the golden 10 years to the downward period of 2012 through 2016? Now the prices are coming down again. What do you think about the cyclicity of the coal industry, and how do you offset and minimize the impact from the cyclicality of this industry? Some analyst colleagues have already mentioned about measures taken to reduce costs. Some investors are worried that the cost might come back to the 2016, 2017 level. We've talked with investors about this. What should be the medium or averages for the prices? You mentioned the cyclicality of the coal. It goes to show your research is pretty profound. If you further analyze the cycles, we can see that the periods or duration for troughs of the cycles are shortening. This is thanks to our lean management and our technological breakthroughs. Our productivity has improved greatly and our safety standards have also greatly improved compared to the last cycle. For the entire last cycle, or if you look to 1980s and 1990s, the entire industry was a downward one. Since 2003, we had a golden decade, and then there was another downturn in 2014 through 2016, but we quickly exited that downturn. Today we are on a very different ground in terms of management and production. The entire macro economy is very resilient and will continue to be so. Coal will continue to serve as a strategic resource and a foundational resource for energy supply in China. Even though there's fluctuation, I don't think the industry will stay at the bottom for long. As for the medium prices, Guoshu or Yin Ping, would one of you like to take this question? This is a great question. Thank you very much for that. Since 2004, the industry has come back and we did have our expectations. In 2004, 2005, we believed that the prices will be coming down, and that trend was already very clear because there's national strategies and things like that. Based on our understanding of this industry, the cost structure of this industry, the cost is actually on the rise. The power generated in China has been steadily on the rise as well over the last couple of years. According to market expectation, the power generated into 2025 will be 600 billion kWh more than 2024. That means there will be 20 million of coal aside from renewable. The capacity would be 4.8 billion in 2025, so 20 million plus compared to now. For coal chemicals and metallurgy, there might be a slight increase for chemicals, but we don't hope to see great increases in metallurgy. Demand-wise, there won't be a lot of changes. Even though there has been great price declines in 2-3 months, the coal will still be 50% of our energy mix in China. Supply is stable. Demand will come down slightly. We believe in 2025, medium prices will come down slightly, and I think we are already pretty much around the point of equilibrium. This is pretty much in line with our expectation for 2024 and 2025. We don't need to be overly bearish about this industry. Thank you. Okay, one last question. Mr. Shen. My name is Shen Tao from Guofai Securities. What do you think about the rationale for price drops? Will the prices continue to drop until the end of April and the beginning of May? Second question is regarding the gap between long-term contract coal prices and the market prices, and could you break it down by regions, Shanxi, Shaanxi, Inner Mongolia, et cetera? Thank you. Mr. Yin Ping. Li Yinping will take this question again. Two questions here. For the first question, the reasons for the price drops. Like I was saying earlier, for the second half of 2024, the prices were already starting to drop. We all know about what happened with the imported coal. 540 million tons. That was a lot of impact for the total supply. Another big impact is metallurgical coal. The total demand was not in line with expectation. Barring some environmental protection reasons, production was pretty stable. Demand was weak. Of course, prices were going to come down and their inventory became more. That was a normal phenomenon, in my opinion. I think reallocating resources is conducive. I think the biggest impact was imported coal. Everybody was asking whether there could be restrictions put on imported coal. From a strategic point of view, or rather from a market perspective, imported coal is an important complement to China's coal supply. From a security perspective, it is having a lot of impact on the total coal market. I think that is the driver, and that is what we believe is the main driver for the price drops. In terms of the gap between long-term and spot, there is not a lot of differences by regions. For these main regions of coal production, price mechanisms are different. For north ports, they go with the NDRC prices, and China Coal goes with NDRC prices. Right now it is 1,500. So CNY 26 gap for 5,000 kcal and CNY 40 something gap for 4,500 kcal. For a production company, I think we just need to adjust our production layout. I think this is beneficial for us. For China Coal, in the last two years, we always adhere to NDRC's requirement. For the long-term contract, we signed a bit less, 75%. Last year it was 80%. NDRC required 75%. For our customers and market, it was pretty stable. For China Coal, in terms of the long-term contract and spot price, the gap does not affect us that much. For other coal producers, especially, I think it is more influential for the ones that will sell in the region, but it is a pain that you need to deal with. Okay, thank you. Thank you, Yin Ping. That is the end for Q&A. Dear friends, dear guests, the three companies introduced their business and answered the questions. Since time is really limited, in order to facilitate more thorough communication, after the meeting, you can keep in touch with the IR of the three companies, and we are willing to answer your questions. For China Coal and listed companies, we received a lot of support from all aspects of this society, and we are in the new era of high quality development. We will further improve our quality and try to build ourselves as a world-class energy enterprise. I want to thank the leaders for their sharing and answering. I want to thank you for participating. That is the end for the performance release. Thank you.