news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Our reporter Li Jiajia and Li Weilai reported from Beijing

On July 31, Xinji Energy (601918.SH) officially released its semi-annual report. It is reported that this is the first semi-annual report of a coal-listed company. In the first half of 2024, the company achieved operating income of 5.985 billion yuan, a year-on-year decrease of 4.4%; and achieved net profit attributable to shareholders of 1.176 billion yuan, a year-on-year decrease of 10.11%.

It is worth noting that although the company's revenue and profits have both declined, Xinji Energy's stock price has been rising rapidly this year, with a cumulative increase of 57.42% this year. If we look at it over a longer period of time, the increase in the past year is 99.01%, and its performance in the secondary market is the best among coal listed companies.

According to the semi-annual report, in addition to the coal business, the company has four power plants under construction. Regarding the future operation time of the power plants, the staff of the Secretary's Office revealed to the reporter of "Huaxia Times" that the Shangrao Power Plant and Chuzhou Power Plant are expected to be operational in March 2026, and the Lu'an Power Plant in June 2026. The No. 3 unit of the second phase of the Lixin Power Plant was connected to the grid yesterday (August 1) for power generation, and the No. 4 unit is expected to be in September this year.

The decline in production and sales dragged down performance

Public information shows that Xinji Energy is one of the large-scale coal and electricity integrated energy enterprises in East China. The company mainly sells two major products, coal and electricity. Its coal mines and power plants are distributed in Anhui and Jiangxi provinces.

In the first half of 2024, under the background of stricter safety supervision in major production areas, my country's raw coal production continued to decline. From January to June, the country's cumulative raw coal production was 2.266 billion tons, a year-on-year decrease of 1.7%. In contrast, the monthly coal import volume has maintained a year-on-year growth trend since the beginning of this year. In the first half of the year, the country's coal import volume hit a new historical high, with imported coal reaching 250 million tons, a year-on-year increase of 12.5%.

The output of coal companies in Anhui Province has also declined. According to statistics from the National Bureau of Statistics, from January to June 2024, the output of raw coal of large-scale enterprises in Anhui Province was 52.776 million tons, a year-on-year decrease of 6.6%.

It is reported that Xinji Energy is at a medium level in coal production and sales in Anhui Province. In the first half of this year, the company's production and sales both declined. The company's raw coal production reached 10.379 million tons, a year-on-year decrease of 7.65%; commercial coal production was 9.3602 million tons, a year-on-year decrease of 4.82%; commercial coal sales were 9.1036 million tons, a year-on-year decrease of 10.24%.

The company's coal segment (including internal sales) achieved revenue of 5.137 billion yuan, a year-on-year decrease of 6.17%; among them, external sales revenue was 4.018 billion yuan, a year-on-year decrease of 9.75%. Coal sales gross profit was 2.05 billion yuan, a year-on-year decrease of 3.62%. From a single quarter perspective, in the first quarter, the company's coal segment (including internal sales) had revenue of 2.6 billion yuan, a year-on-year increase of 1.49%. Based on this, the corresponding revenue in the second quarter was 2.535 billion yuan, a rapid year-on-year decline.

As the company's main source of income, the decline in coal production and sales has led to a decline in the company's overall performance. In the first half of 2024, Xinji Energy achieved operating income of 5.985 billion yuan, a year-on-year decrease of 4.4%; and achieved net profit attributable to shareholders of 1.176 billion yuan, a year-on-year decrease of 10.11%, resulting in an unfavorable situation of both revenue and net profit declining.

Institutions optimistic about growth in power business

On July 31, Xinji Energy announced its semi-annual results. The next day, its stock price plunged sharply, falling 5.79%. On August 2, its stock price fell again. As of the close of the day, the company's stock price was 8.06 yuan per share.

However, it should be pointed out that although the share price of Xinji Energy has declined recently, overall, the company's share price has performed well this year. According to data from the Eastmoney App, among the 35 listed coal companies, Xinji Energy ranks first in terms of year-to-date growth, reaching 57.42%. In the long run, the company's growth in the past year has nearly doubled to 99.01%.

It is worth mentioning that with the release of Xinji Energy's semi-annual report, there have been a lot of research reports released recently, among which the company's power business is favored by institutions.

In terms of power business, according to the semi-annual report, Xinji Energy's power generation efficiency ranks among the top in Anhui Province. In the first half of the year, the company's online power generation was 4.353 billion kWh, a year-on-year increase of 12.66%. The company controls 7.98 million kilowatts of coal-fired power installed capacity, including the first phase of Lixin Power Plant in operation (2*1000MW), the second phase of Lixin Power Plant under construction (2*660MW), Shangrao Power Plant (2*1000MW), Chuzhou Power Plant (2*660MW), and Lu'an Power Plant (2*660MW). It owns two low calorific value coal-fired power plants, Xinji Mine 1 and Mine 2, and the company has a stake in Xuancheng Power Plant (1*660MW, 1*630MW). At present, the first phase of Lixin Power Plant controlled by the company and the Xuancheng Power Plant in which it has a stake have been put into operation, and coal consumption accounts for about 40% of the company's output.

Shanxi Securities Research Report pointed out that there is a large room for subsequent installed capacity expansion, and the advantages of coal-electricity integration will be further highlighted. With the completion and operation of coal-electricity projects, the company's coal production capacity and power installed capacity will gradually increase, and the synergistic advantages of coal-electricity integration will be fully utilized, further improving the company's profitability and risk resistance.

Regarding the future operation time of power plants, the staff of the Secretary's Office told the reporter of China Times that Shangrao Power Plant and Chuzhou Power Plant are expected to be operational in March 2026, and Lu'an Power Plant in June 2026. The No. 3 unit of the second phase of Lixin Power Plant was connected to the grid yesterday (August 1) for power generation, and the No. 4 unit is expected to be operational in September this year.

Competition among Anhui coal companies may intensify

However, it should be noted that the company also faces financial risks. As of the end of June 2024, the company's cash on hand was 2.383 billion yuan, short-term loans were 2.091 billion yuan, long-term loans were 11.082 billion yuan, and total liabilities were 23.866 billion yuan. The asset-liability ratio was as high as 60.04%, which has remained high for a long time.

The company stated frankly that in the next two years, the company will have large capital expenditures on construction of coal-fired power and new energy projects. As of now, the company's asset-liability ratio is still relatively high, and the company is under great pressure to repay principal and interest.

In addition, the company's performance is greatly affected by the fluctuation of coal prices. Since July, due to factors such as the flood season, the safety supervision in the main production areas has become stricter, and the coal mine production mentality has been cautious, and the release of coal production is still lower than expected; in terms of demand, due to the continued negative feedback of high inventory, the willingness of terminals to purchase additional spot to replenish inventory is sluggish, and the expected peak season demand has not been fulfilled.

In addition, although the company is currently located in the central part of Anhui Province, close to the economically developed but energy-deficient Yangtze River Delta region, and has certain locational advantages, the company's annual report also pointed out that coal production capacity is mainly concentrated in Shanxi, Shaanxi, Inner Mongolia and Xinjiang. With the optimization and improvement of railway and water transportation conditions across the country, the transportation cost of Shanxi, Shaanxi, Inner Mongolia and Xinjiang to Central China and East China will drop significantly, which will trigger fierce competition in some traditional sales areas of Anhui coal companies.

Zhang Wenwen, a coal analyst at Shanghai Steel Union Coal and Coke Division, told the China Times that in recent years, the concentration of my country's coal industry has been further improved, and the coal energy output of Shanxi, Shaanxi and Inner Mongolia accounts for more than 70% of the country's total. Leading enterprises in Shanxi, Shaanxi and Inner Mongolia have strong cost advantages. With the high-quality development of the industry with increasing concentration and production efficiency, resources and costs will be the two core competitiveness of coal enterprises.

Zhang Wenwen further pointed out that the contradiction of overcapacity in my country's coal industry is becoming increasingly prominent, mainly reflected in the fact that on the one hand, coal production is too high, but on the other hand, coal prices continue to fall. Therefore, the significant decline in transportation costs in the Shanxi, Shaanxi and Inner Mongolia regions with resource advantages will indeed cause fierce competition in some traditional sales areas of Anhui coal companies.

Editor-in-charge: Li Weilai Editor-in-chief: Zhang Yuning