China Coal Energy : THIRD QUARTERLY REPORT 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

ʕ਷ʕ๩ঐ๕ٰ΅Ϟࠢʮ̡

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 01898)

THIRD QUARTERLY REPORT 2018

Pursuant to the regulations and rules of China Securities Regulatory Commission and Shanghai Stock Exchange (the "SSE"), China Coal Energy Company Limited (the "Company" or "China Coal Energy", together with its subsidiaries, collectively the "Group") is required to publish reports on a quarterly basis.

This announcement is made pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

This announcement is a summary of the 2018 third quarterly financial report of the Company prepared in accordance with the Chinese Accounting Standards for Business Enterprise for the nine months ended 30 September 2018. The full text of the quarterly financial report will be available on the website of The Stock Exchange of Hong Kong Limited (the "HKSE") on 23 October 2018. The full text of the quarterly financial report is in Chinese only.

I.

IMPORTANT NOTICE

• 1.1 The board of directors and the supervisory committee of the Company together with the directors, supervisors and the senior management thereof guarantee that the content of this quarterly report is true, accurate and complete and does not contain any false representations, misleading statements or material omissions, and severally and jointly accept legal responsibility for the content of this report.

• 1.2 All members of the board of directors of the Company attended the meeting of the board of directors for the review and approval of this quarterly report.

• 1.3 Li Yanjiang (the person-in-charge of the Company), Chai Qiaolin (the person-in-charge of accounting affairs) and Chai Qiaolin (the person responsible for the accounting department, i.e. head of the accounting department) guarantee that the financial statements set out in this quarterly report are true, accurate and complete.

• 1.4 The third quarterly report of the Company is unaudited.

II.

BASIC INFORMATION OF THE COMPANY

2.1

Major financial data

Unit: RMB'000

As at the end of the reporting period	As at the end of the previous year (restated)	Increase/decrease at the end of the reporting period as compared to the end of the previous year (%)
Total assets	261,722,487	251,351,543	4.1
Net assets attributable to the equity holders of the listed company	92,294,792	89,010,191	3.7
From the beginning of the year to the end of the reporting period (January to September)	From the beginning of the previous year to the end of the corresponding period of the previous year (January to September) (restated)	Increase/decrease compared to the corresponding period of the previous year (%)
Net cash flows generated from operating activities	16,819,927	10,691,403	57.3
From the beginning of the year to the end of the reporting period (January to September)	From the beginning of the previous year to the end of the corresponding period of the previous year (January to September) (restated)	Increase/decrease compared to the corresponding period of the previous year (%)
Operating revenue	77,137,407	59,977,227	28.6
Net profit attributable to the equity holders of the listed company	4,124,682	2,332,026	76.9
Net profit attributable to the equity holders of the listed company net of non-recurring gains or losses	4,121,774	2,253,407	82.9
Weighted average return on net assets (%)	4.55	2.79	Increased by 1.76 percentage points
Basic earnings per share (RMB per share)	0.31	0.18	72.2
Diluted earnings per share (RMB per share)	N/A	N/A	-

Non-recurring gains or losses and relevant amounts

√ Applicable ½Not applicable

Unit: RMB'000

Item	Amount for the reporting period (July to September)	Amount for the period from the beginning of the year to the end of the reporting period (January to September)	Explanations
Gains or losses from disposal of non-current assets	-10,371	-33,332	-
Government grants included in profit or loss for the reporting period, excluding those closely related to the Company's ordinary business and granted on an on-going basis in fixed amount or volume according to certain principles under national policies	25,259	94,183	-
Net profit and loss of subsidiaries resulting from the business combination involving entities under common control from the beginning of the reporting period to the date of combination	4,010	-73,610	-
Reversal of impairment provisions for receivables subject to individual impairment test	0	1,000	-
Gains or losses from external entrusted loans	638	6,120	-
Other non-operating income and expenses apart from the foregoing	-37,366	-38,081	-
Impact on minority shareholders' interests (after tax)	10,802	51,514	-
Effect of income tax	7,747	-4,886	-
Total	719	2,908	-

Major production and operational data

Item	Unit	January to September, 2018	January to September, 2017 (restated)	Percentage change %
I. Coal operations
1. Production volume of commercial coal	10,000 tonnes	5,587	5,796	-3.6
Of which: Thermal coal	10,000 tonnes	4,924	5,098	-3.4
Coking coal	10,000 tonnes	663	698	-5.0
2. Sales volume of commercial coal	10,000 tonnes	11,438	9,530	20.0
Of which: Sales volume of self-produced coal	10,000 tonnes	5,377	5,612	-4.2
II. Coal chemical operations
(I) Polyolefin
1. Polyethylene production	10,000 tonnes	54.7	30.8	77.6
Sales volume	10,000 tonnes	54.5	30.9	76.4
2. Polypropylene production	10,000 tonnes	54.2	30.2	79.5
Sales volume	10,000 tonnes	54.8	30.8	77.9
(II) Urea
1. Production	10,000 tonnes	130.3	149.3	-12.7
2. Sales volume	10,000 tonnes	154.7	162.3	-4.7
(III) Methanol
1. Production	10,000 tonnes	43.8	48.7	-10.1
2. Sales volume	10,000 tonnes	5.1	9.8	-48.0
III. Coal mining equipment operations
1. Output value of coal mining equipment	RMB100 million	51.7	37.8	36.8

Note: The sales volume of methanol in 2018 excludes the Company's internal self-consumption.

Major differences arising from the adoption of different accounting standards in preparing the financial statements

Unit: RMB'000

Net profit attributable to the equity holders of the listed company		Net assets attributable to the equity holders of the listed company
January to September, 2018	January to September, 2017 (restated)	As at 30 September 2018	As at 31 December 2017 (restated)
According to PRC GAAP	4,124,682	2,332,026	92,294,792	89,010,191
Items and amounts adjusted according to IAS:
(a) Adjustment to special funds and deferred tax of the coal industry	1,000,956	714,953	98,107	188,187
(b) Adjustment to floating of non-tradable shares under equity split	-	-	-155,259	-155,259
(c) Adjustment to government grants	2,783	2,783	-30,607	-33,390
According to IAS	5,128,421	3,049,762	92,207,033	89,009,729

Explanations on major reconciliations are as follows:

• (a) Adjustment to special reserves and relevant deferred tax: special reserves comprise maintenance fee, safety fund, coal mine transformation fund, mining environmental restoration security deposit and sustainable development reserve. Under PRC GAAP, the Group should make provisions for the special reserves which will be accounted as the production cost and contributions made to the special reserves of equity attributable to shareholders. Non-capital expenditure incurred should be directly offset against special reserves upon occurrence, while capital expenditure incurred should be recorded as fixed assets upon completion, and offset against special reserves based on the cost of the fixed assets with accumulated depreciation fully recognised. After that, no subsequent provisions for depreciation would be made to the relevant fixed assets. Under IFRS, provisions made for the special reserves should be recorded as retained earnings provision while the relevant expenditures are recognised upon occurrence and the special reserves are accordingly transferred to retained earnings.

• (b) Under PRC GAAP, the consideration paid by holders of non-tradable shares to holders of tradable shares in accordance with the reform proposal of equity split should be recorded as long-term equity investments in the balance sheet. Under IFRS, such consideration shall be recorded as interests of minority shareholders directly deducted from the equity attributable to shareholders.

• (c) Under PRC GAAP, subsidies considered as capital investment by the government should be recorded in "capital reserve". Under IFRS, the subsidies mentioned above shall be treated as government grants.