China Shenhua Energy : THIRD QUARTERLY REPORT FOR THE YEAR 2019

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.

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

(Stock Code: 01088)

THIRD QUARTERLY REPORT FOR THE YEAR 2019

Pursuant to the rules and regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange, China Shenhua Energy Company Limited is required to announce this quarterly report. This announcement is made pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

The board of directors of the Company (the "Board") hereby presents the results of the Group for the nine months ended 30 September 2019 prepared in accordance with the International Financial Reporting Standards ("IFRSs"). Such results have not been audited or reviewed by the independent auditors.

1. IMPORTANT NOTICE

1. The Board and the supervisory committee of the Company together with the directors, supervisors and the senior management of the Company warrant that the contents of the quarterly report are authentic, accurate and complete and do not contain any misrepresentation, misleading statement or material omission, and shall jointly and severally accept legal liability.
2. This report was considered and approved at the 23rd meeting of the fourth session of the Board of the Company. All directors of the Company have attended the meeting.

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1. Wang Xiangxi, Chairman of the Board of the Company, Xu Shancheng, Chief Financial Officer of the Company and Ban Jun, person-in-charge of the accounting department of the Company, warrant the authenticity, accuracy and completeness of the financial statements contained in this report.
2. The financial statements of this report are prepared in accordance with IFRSs, but have not been audited or reviewed. Please refer to section 2.2 of this report for the major differences between the financial statements prepared under the Accounting Standards for Business Enterprises of PRC and those prepared under the IFRSs.

2. COMPANY PROFILE

1. Key financial indicators prepared under the IFRSs

	January to	January to
	September	September	Percentage
	2019	2018	change
			%
Revenue (RMB million)	177,849	194,084	(8.4)
Profit before income tax	54,237	58,249	(6.9)
(RMB million)
Profit for the period (RMB million)	43,153	45,572	(5.3)
Profit for the period attributable to	36,250	37,207	(2.6)
equity holders of the Company
(RMB million)
Basic earnings per share (RMB/share)	1.823	1.871	(2.6)
Net cash generated from operating	56,757	67,822	(16.3)
activities (RMB million)
Net cash per share generated from	2.85	3.41	(16.3)
operating activities
(RMB/share)
Net cash generated from operating	53,527	58,233	(8.1)
activities excluding the effect of
Shenhua Finance Company
(RMB million)
Net cash per share generated from	2.69	2.93	(8.1)
operating activities excluding the

effect of Shenhua Finance Company (RMB/share)

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	As at 30	As at 31
	September	December	Percentage
	2019	2018	change
			%
Total assets (RMB million)	564,882	591,626	(4.5)
Total liabilities (RMB million)	146,119	182,789	(20.1)
Total equity (RMB million)	418,763	408,837	2.4
Equity attributable to equity holders of	350,523	331,693	5.7
the Company (RMB million)
Shareholders' equity per share	17.62	16.68	5.7

(RMB/share)

2.2 Major differences of financial statements prepared under different accounting standards

			Unit: RMB million
	Net profit attributable	Net assets attributable
	to equity holders of the	to equity holders of the
	Company	Company
	January to	January to	As at 30	As at 31
	September	September	September	December
	2019	2018	2019	2018
Under China Accounting	37,088	35,278	346,911	327,763
Standards for Business
Enterprises
Adjustment:
Simple production	(838)	1,929	3,612	3,930
maintenance, production
safety and other related
expenditures
Under International Financial	36,250	37,207	350,523	331,693
Reporting Standards

Explanation: Pursuant to the relevant regulations of the related government authorities in the PRC, the Group accrued provisions for simple production maintenance, production safety and other related expenditures, recognised as expenses in profit or loss and separately recorded as a specific reserve in shareholders' equity under China Accounting Standards for Business Enterprises. On utilisation of the specific reserve as fixed assets within the stipulated scope, the full amount of accumulated depreciation is recognised at the same time when the cost of the relevant assets is recorded. Under International Financial Reporting Standards, these expenses are recognised in profit or loss as and when incurred. Relevant capital expenditure is recognised as property, plant and equipment and depreciated according to the relevant depreciation method. The effect on deferred tax arising from such difference is also reflected.

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2.3	Major operational data
					2019	2018	Percentage change(%)
					July to	January to	July to	January to	July to	January to
	Operational indicators	Unit	September	September	September	September	September	September
	(I)	Coal
		1.	Commercial coal production	Million tonnes	68.7	214.1	74.2	220.0	(7.4)	(2.7)
		2.	Coal sales	Million tonnes	114.6	331.7	114.7	340.0	(0.1)	(2.4)
	(II)	Transportation
		1.	Turnover of self-owned railway	Billion tonne km	71.8	214.7	72.8	211.4	(1.4)	1.6
		2	Seaborne coal	Million tonnes	69.9	199.4	69.6	199.1	0.4	0.2
			Of which: Via Huanghua Port	Million tonnes	48.5	140.2	50.7	142.7	(4.3)	(1.8)
			Via Shenhua Tianjin	Million tonnes	12.3	33.4	11.1	33.8	10.8	(1.2)
			Coal Dock
		3.	Shipment volume	Million tonnes	28.7	83.5	26.5	78.1	8.3	6.9
		4.	Shipment turnover	Billion tonne	23.1	67.8	22.5	67.6	2.7	0.3
				nautical miles
	(III)	Power generation
		1.	Gross power generation	Billion kWh	36.75	116.65	80.07	213.66	(54.1)	(45.4)
		2.	Total power output dispatch	Billion kWh	34.38	109.34	75.06	200.44	(54.2)	(45.5)
	(IV)	Coal chemical
		1.	Sales of polyethylene	Thousand tonnes	74.7	261.2	67.8	239.4	10.2	9.1
		2.	Sales of polypropylene	Thousand tonnes	70.7	241.3	60.7	221.0	16.5	9.2

Note: According to the comparative basis, from July to September 2018, the total power generation and power output dispatch amounted to 42.08 billion kWh and 39.40 billion kWh, respectively; from January to September 2018, the total power generation and power output dispatch amounted to 120.97 billion kWh and 113.34 billion kWh, respectively.

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2.4 Total number of shareholders and shareholding of top ten shareholders and top ten holders of tradable shares (or shares not subject to selling restrictions) at the end of the reporting period

Total number of shareholders					164,571
Including: Holders of A shares (including China Energy)		162,430
Registered holders of H shares				2,141
					Unit: shares
Shareholding of top ten shareholders
			Number of
	Number of		shares	Shares pledged or
	shares held at		held subject	frozen
	the end of		to selling	Status of		Nature of
Name of shareholder (in full)	the period	Percentage	restrictions	shares	Number	shareholder
		%
China Energy Investment Corporation	13,812,709,196	69.45	0	Nil	N/A	State-owned
Limited
HKSCC NOMINEES LIMITED	3,390,277,222	17.05	0	Unknown	N/A	Overseas
						corporation
China Securities Finance Corporation	594,718,049	2.99	0	Nil	N/A	Others
Limited
Beijing Chengtong Financial Control	282,361,828	1.42	0	Nil	N/A	State-owned
Investment Co., Ltd.
China Merchants Bank Co.,Ltd.	160,204,700	0.81	0	Nil	N/A	Others
- Bosera CSI State-Owned
Enterprises Innovation-driven
Index ETF Securities Investment
Fund
Bank of China Limited - Harvest	124,981,900	0.63	0	Nil	N/A	Others
CSI State-Owned Enterprises
Innovation-driven Index ETF
Securities Investment Fund
Central Huijin Asset Management	110,027,300	0.55	0	Nil	N/A	State-owned
Limited
Industrial and Commercial Bank of	105,341,801	0.53	0	Nil	N/A	Others
China Limited - GF CSI State-
Owned Enterprises Innovation-
driven Index ETF Securities
Investment Fund
Hong Kong Securities Clearing	80,825,235	0.41	0	Nil	N/A	Overseas
Company Limited						corporation
China Construction Bank Corporation	36,766,700	0.18	0	Nil	N/A	Others
- Fullgoal CSI State-Owned
Enterprises Innovation-driven
Index ETF Securities Investment
Fund

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Shareholdings of top ten shareholders without selling restrictions

	Number of	Type and number of shares
	shares
	without selling
Name of shareholders	restrictions	Type	Number
China Energy Investment Corporation	13,812,709,196	RMB ordinary	13,812,709,196
Limited		shares
HKSCC NOMINEES LIMITED	3,390,277,222	Overseas-listed	3,390,277,222
		foreign shares
China Securities Finance Corporation	594,718,049	RMB ordinary	594,718,049
Limited		shares
Beijing Chengtong Financial Control	282,361,828	RMB ordinary	282,361,828
Investment Co., Ltd.		shares
China Merchants Bank Co.,Ltd.	160,204,700	RMB ordinary	160,204,700
- Bosera CSI State-Owned		shares
Enterprises Innovation-driven Index
ETF Securities Investment Fund	124,981,900	RMB ordinary	124,981,900
Bank of China Limited - Harvest
CSI State-Owned Enterprises		shares
Innovation-driven Index ETF
Securities Investment Fund
Central Huijin Asset Management	110,027,300	RMB ordinary	110,027,300
Limited		shares
Industrial and Commercial Bank of	105,341,801	RMB ordinary	105,341,801
China Limited - GF CSI State-		shares
Owned Enterprises Innovation-
driven Index ETF Securities
Investment Fund
Hong Kong Securities Clearing	80,825,235	RMB ordinary	80,825,235
Company Limited		shares
China Construction Bank Corporation	36,766,700	RMB ordinary	36,766,700
- Fullgoal CSI State-Owned		shares
Enterprises Innovation-driven Index
ETF Securities Investment Fund

Statements on the connected relationships among the above shareholders and whether they are parties acting in concert

HKSCC NOMINEES LIMITED and Hong Kong Securities Clearing Company Limited are wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited. Save for the information disclosed above, the Company is not aware of whether any connected relationship existing among the top ten shareholders not subject to selling restrictions and the top ten shareholders, and whether they are parties acting in concert under the "Measures for the Administration of Acquisition of Listed Companies".

Details of holders of preference	N/A
shares whose voting rights have
been restored and their relevant
shareholding

Note: H shares held by HKSCC NOMINEES LIMITED are held on behalf of a number of its clients; A shares held by Hong Kong Securities Clearing Company Limited are held on behalf of a number of its clients.

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2.5 Total number of holders of preference shares, and shareholdings of the top ten holders of preference shares and top ten holders of preference shares not subject to selling restrictions as at the end of the reporting period

Applicable

✓ Not applicable

3. SIGNIFICANT EVENTS

1. Change in the scope of consolidated financial statements
   The transaction relating to the joint venture company jointly established by the Company and GD Power with their respective equities and assets held in relevant coal-fired power generation companies (the "Subject Assets") has been completed on 31 January 2019. Since the Completion Date, the assets and liabilities of the power plants in relation to the Subject Assets contributed by the Company and profit or loss subsequent to 31 January 2019 are no longer consolidated to the consolidated financial statement of the Company. The Company increased the long-term equity investment in its Joint Venture Company and conducted subsequent measurement under the equity method.
2. Material changes in major items of accounting statements of the Company and the underlying reasons
   From January to September 2019, revenue of the Group under the IFRSs was RMB177,849 million (for the corresponding period in 2018: RMB194,084 million), representing a year-on-year decrease of 8.4%. Profit before income tax was RMB54,237 million (for the corresponding period in 2018: RMB58,249 million), representing a year-on-year decrease of 6.9%. Profit for the period attributable to equity holders of the Company was RMB36,250 million (for the corresponding period in 2018: RMB37,207 million), representing a year-on-year decrease of 2.6%. As at 30 September 2019, the asset liability ratio of the Group was 25.9% (as at 31 December 2018: 30.9%), representing a decrease of 5.0 percentage points as compared to the end of last year.

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Changes in major accounting items of the consolidated financial statements and explanations are set out below:

					Unit: RMB million
	Items of consolidated
	statement of profit	January to	January to
	or loss and other	September	September	Percentage
No.	comprehensive income	2019	2018	Change	Major reasons for changes
				%
1	Revenue	177,849	194,084	(8.4) Since the Completion Date,
					revenue relating to the
					Subject Assets has no longer
					been consolidated into
					the consolidated financial
					statements of the Company.
2	Cost of sales	(118,553)	(126,293)	(6.1) Decrease in sales volume of
					coal purchased and unit
					purchase cost, and decrease in
					depreciation and amortization
					cost of power segment.
3	General and	(5,784)	(6,485)	(10.8) Decrease in labour expense as
	administrative				a result of decrease in the
	expenses				number of personnel.
4	Other gains and losses	1,933	35	5,422.9	The Company recognised
					relevant returns on investment
					on the Completion Date of
					the Subject Assets of the
					Joint Venture Company,
					and recognised gains on
					redemption of wealth
					management products of the
					Company upon expiry.
5	Loss allowances	140	299	(53.2) Decrease in the balances of loans
					granted by Shenhua Finance
					Company as at the end of the

reporting period, reversing part of the allowance for doubtful debts.

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				Unit: RMB million
	Items of consolidated
	statement of profit	January to	January to
	or loss and other	September	September	Percentage
No.	comprehensive income	2019	2018	Change Major reasons for changes
				%
6	Finance costs	(2,094)	(3,492)	(40.0) Decrease in the interest expenses
				due to the decrease in new
				borrowings.
7	Share of results of	490	348	40.8 The Company recognised the
	associates			share of result of the Joint
				Venture Company after the
				completion of the transaction
				in relation to the Joint
				Venture Company.
8	Income tax expense	(11,084)	(12,677)	(12.6) Average income tax rate for
				the first three quarters of
				2019 was 20.4% (for the

corresponding period in 2018: 21.8%), representing a decrease of 1.4 percentage points, which is mainly due to the increase in percentage of profits in railway segment, which is entitled to more preferential tax rates.

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					Unit: RMB million
	Items of consolidated	As at 30	As at 31
	statement of	September	December	Percentage
No.	financial position	2019	2018	change	Major reasons for changes
				%
1	Construction in progress	42,472	36,585	16.1	Additional contribution in power
					and railway infrastructure
					construction project
2	Right-of-use assets	17,580	N/A	N/A	Lease right-of-use assets
					recognised due to application
					of new lease standard of the
					Group
3	Interests in associates	40,086	10,047	299.0	Investment in the Joint Venture
					Company recognised by the
					Company
4	Other non-current assets	33,228	29,456	12.8	Increase of long-term loans
					granted by Shenhua Finance
					Company
5	Lease prepayments	N/A	16,425	(100.0) Reclassification of the item
					into right-of-use assets due
					to application of new lease
					standard of the Group
6	Inventories	13,209	9,967	32.5	Increase in inventories of coal,
					ancillary materials and spare
					parts
7	Cash and cash	85,607	61,863	38.4	Cash generated from operating
	equivalents				activities
8	Assets classified as held	0	83,367	(100.0) Completion of the Subject Assets
	for sale				of the Joint Venture Company
9	Short-term borrowings	3,988	5,772	(30.9) Repayment of certain short-term
					borrowings upon expiry
10	Accounts and bills	22,189	26,884	(17.5) Decrease of balances of payables
	payable				for power and transportation
					businesses

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					Unit: RMB million
	Items of consolidated	As at 30	As at 31
	statement of	September	December	Percentage
No.	financial position	2019	2018	change	Major reasons for changes
				%
11	Current portion of bonds	3,534	0	N/A	Maturity of some USD bonds
					will be due within 1 year
12	Income tax payable	3,325	4,213	(21.1) Settlement of income tax during
					the reporting period
13	Contract liabilities	6,504	3,404	91.1	Increase of prepayment for coal
					business
14	Liabilities associated	0	29,914	(100.0)	Completion of liabilities
	with assets classified				associated with the Subject
	as held for sale				Assets of the Joint Venture
					Company
15	Long-term borrowings	39,798	46,765	(14.9) Repayment of certain long-term
					borrowings upon expiry
16	Bonds	3,507	6,823	(48.6) USD bonds due within 1 year
					reclassified to current portion
					of bonds
17	Lease liabilities	666	N/A	N/A	Lease liability recognised due
					to application of new lease
					standard of the Group

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					Unit: RMB million
	Items of the	January to	January to
	consolidated statement	September	September	Percentage
No.	of cash flows	2019	2018	change	Major reasons for changes
				%
1	Net cash generated from	56,757	67,822	(16.3) Decrease in cash inflows due
	operating activities				to decrease in income;
	Including: Net cash	3,230	9,589	(66.3)	and decrease in deposits
	generated				placed with Shenhua
	from operating				Finance Company
	activities
	of Shenhua
	Finance
	Company note
	Net cash generated from	53,527	58,233	(8.1)
	operating activities
	excluding the effect
	of Shenhua Finance
	Company
2	Net cash used in investing	(3,787)	(13,897)	(72.7) Recovery of certain bank
	activities				wealth management
					products of the Group
					upon expiry
3	Net cash used in financing	(29,265)	(21,165)	38.3 Decrease in new borrowings
	activities				during the reporting
					period as compared with
					the same period of last
					year

Note: Except for services within the Group, Shenhua Finance Company provides financial services, including deposits and loans, to other entities apart from the Group. This item represents the cash flow of deposits and loans, interests, fees and commission generated from financial services.

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3.3 Analysis on key operational indicators of the coal segment

3.3.1 Coal sales

1. By contract pricing mechanisms

		July to September 2019	January to September 2019
			Proportion	Price		Proportion	Price
		Sales	of total	(exclusive	Sales	of total	(exclusive
		volume	sales	of tax)	volume	sales	of tax)
		Million		RMB/	Million		RMB/
		tonnes	%	tonne	tonnes	%	tonne
I.	Annual long-term	53.0	46.2	404	161.2	48.6	380
	contracts
II.	Monthly long-term	46.2	40.4	482	131.1	39.5	484
	contracts
III.	Spot commodity	15.4	13.4	418	39.4	11.9	421
Total sales volume/average	114.6	100.0	437	331.7	100.0	426
	price (exclusive of tax)

Note: Sales prices of coal in this report are all exclusive of tax. Similarly hereinafter.

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(2)	By sales regions
					July to September 2019	July to September 2018	Change
						Proportion	Price		Proportion	Price		Price
					Sales	of total	(exclusive	Sales	of total	(exclusive	Sales	(exclusive
					volume	sales	of tax)	volume	sales	of tax)	volume	of tax)
					Million		RMB/	Million		RMB/
					tonnes	%	tonne	tonnes	%	tonne	%	%
	I.	Domestic sales	112.8	98.5	437	114.0	99.5	427	(1.1)	2.3
		(I)	Self-produced coal	108.8	95.1	438	109.6	95.6	428	(0.7)	2.3
				and purchased
				coal
			1.	Direct arrival	39.3	34.4	342	40.5	35.3	319	(3.0)	7.2
			2.	Seaborne	69.5	60.7	492	69.1	60.3	491	0.6	0.2
		(II)	Sales of domestic	2.7	2.3	396	2.7	2.5	384	0.0	3.1
				trading coal
		(III) Sales of imported coal	1.3	1.1	427	1.7	1.4	461	(23.5)	(7.4)
	II.	Export sales	0.4	0.3	642	0.5	0.4	606	(20.0)	5.9
	III. Overseas coal sales	1.4	1.2	422	0.2	0.1	520	600.0	(18.8)
	Total sales volume/average	114.6	100.0	437	114.7	100.0	428	(0.1)	2.1
		price (exclusive of tax)
					January to September 2019	January to September 2018	Change
						Proportion	Price		Proportion	Price		Price
					Sales	of total	(exclusive	Sales	of total	(exclusive	Sales	(exclusive
					volume	sales	of tax)	volume	sales	of tax)	volume	of tax)
					Million		RMB/	Million		RMB/
					tonnes	%	tonne	tonnes	%	tonne	%	%
	I.	Domestic sales	327.3	98.7	425	336.5	99.0	430	(2.7)	(1.2)
		(I)	Self-produced coal	318.8	96.1	426	320.0	94.1	430	(0.4)	(0.9)
				and purchased
				coal
			1.	Direct arrival	120.8	36.4	328	122.4	36.0	316	(1.3)	3.8
			2.	Seaborne	198.0	59.7	486	197.6	58.1	500	0.2	(2.8)
		(II)	Sales of domestic	6.2	1.9	353	14.0	4.2	431	(55.7)	(18.1)
				trading coal
		(III) Sales of imported coal	2.3	0.7	437	2.5	0.7	443	(8.0)	(1.4)
	II. Export sales	1.4	0.4	634	1.5	0.4	531	(6.7)	19.4
	III. Overseas coal sales	3.0	0.9	443	2.0	0.6	518	50.0	(14.5)
	Total sales volume/average	331.7	100.0	426	340.0	100.0	431	(2.4)	(1.2)
		price (exclusive of tax)

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3.3.2 Operating Results (before elimination on consolidation)

		January to	January to
		September	September	Percentage
		2019	2018	change Major reasons for changes
				%
Revenue	RMB million	145,469	150,703	(3.5) Decrease in sales volume and
				average price of coal
Cost of sales	RMB million	113,252	113,427	(0.2) Decrease in the volume of
				purchased coal and purchase
				price
Gross profit	RMB million	32,217	37,276	(13.6)
Gross profit	%	22.1	24.7	Decreased by
margin				2.6 percentage
				points

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3.3.3 Unit Production Cost of Self-Produced Coal
				Unit: RMB/tonne
	January to	January to
	September	September	Percentage
	2019	2018	change	Major reasons for changes
			%
Unit production cost of	123.0	109.4	12.4
self-produced coal
Materials, fuel and	25.9	21.0	23.3	Enhancing earthwork stripping
power				in open-pit mines such as
				Ha'erwusu open-pit mine, an
				increase in electricity price
				in coal mines production
				in Inner Mongolia, and
				decrease in output of Shengli
				open-pit mine with low unit
				production cost
Personnel expenses	22.9	19.1	19.9	Wages rise in part of
				production units
Repairs and	8.9	7.5	18.7	Collective repair and
maintenance				maintenance of production
				equipment in open-pit mines
Depreciation and	17.4	19.1	(8.9)	Sufficient provision for
amortization				depreciation of part of
				production equipment
Other costs	47.9	42.7	12.2	Increase in production cost
				for maintenance, safety
				investments, outsourcing fee
				for stripping and relocation
				compensation, etc.

Other costs consist of the following three components: (1) expenses directly related to production, including expenses for coal washing, selecting and processing expenses, and mining engineering expenses, etc., accounting for approximately 61%; (2) auxiliary production expenses, accounting for approximately 23%; (3) land requisition and surface subsidence compensation, environmental protection expenses, tax, and local charges, etc., accounting for approximately 16%.

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3.4 Operation of the power segment

1. Power generation and power output dispatch

	Gross power generation			Power output dispatch	Average utilization hours			Power tariff
			billion kWh			billion kWh		hours			RMB/mWh
			July to			July to			July to			July to		July to			July to			July to			July to
Location/	September	September	September	September	September	September	September	September
Type of power	2019		2018		2019	2018		2019	2018	2019	2018
Domestic	36.29		79.64	33.97	74.68	1,181	1,367	336	319
Coal-fired power	35.03	77.70	32.74	72.78	1,181	1,378	330	314
Gas-fired power	1.03	1.71	1.00	1.68	1,080	994	581	528
Hydropower	0.23	0.23	0.23	0.22	1,810	1,814	188	189
Overseas	0.46	0.43	0.41	0.38	1,546	1,429	502	483
Coal-fired power	0.46	0.43	0.41	0.38	1,546	1,429	502	483
Total/Weighted average	36.75		80.07	34.38	75.06	1,185	1,368	338	320
	Gross power generation			Power output dispatch	Average utilization hours			Power tariff
			billion kWh			billion kWh		hours			RMB/mWh
	January to	January to	January to	January to	January to	January to	January to	January to
Location/	September	September	September	September	September	September	September	September
Type of power	2019		2018		2019	2018	2019	2018	2019	2018
Domestic	115.49		212.44	108.33	199.37	3,385	3,648	331	314
Coal-fired power	111.72	207.72	104.65	194.76	3,390	3,684	324	309
Gas-fired power	3.25	4.21	3.17	4.11	3,136	2,436	577	551
Hydropower	0.52	0.51	0.51	0.50	4,140	4,071	225	219
Overseas	1.16	1.22	1.01	1.07	3,872	4,068	527	493
Coal-fired power	1.16	1.22	1.01	1.07	3,872	4,068	527	493
Total/Weighted average	116.65		213.66	109.34	200.44	3,389	3,528	333	315

- 17 -

(2) Installed Power Generators
					Unit: MW
			Installed capacity
			increased/
	Total installed		(decreased)	Total Installed
	capacity as at 31		from January to	capacity as at 30
Power Type	December 2018		September 2019	September 2019
Coal-fired power	59,994	(30,040)	29,954
Gas-fired power	1,730	(780)	950
Hydropower	125		0	125
Total	61,849		(30,820)	31,029

Decrease in installed capacity of generator units of the Group is mainly due to the fact that a total of 30,530 MW generator units involved in the equity and assets of coal-fired power generation companies contributed by the Company are no longer consolidated into the statistic scope of the Group as a result of the completion of the transaction relating to the Joint Venture Company jointly established by the Company and GD Power (for details, please refer to the 2019 Interim Report of the Company).

(3) Operating Results (before elimination on consolidation)

		January to	January to
		September	September	Percentage
		2019	2018	change	Major reasons for changes
				%
Revenue	RMB million	38,303	65,278	(41.3) Upon completion of the transaction
Cost of sales	RMB million	29,988	53,666	(44.1)	relating to the establishment of
					the Joint Venture Company on 31
					January 2019, revenue and costs
					relating to the assets contributed
					by the Company are no longer
					consolidated into the Group.
Gross profit	RMB million	8,315	11,612	(28.4)
Gross profit margin	%	21.7	17.8	Increased by
				3.9 percentage
				points

- 18 -

From January to September 2019, the Group's average cost of power output dispatch of the power business was RMB268.0/mWh (for the same period in 2018: RMB262.5/mWh), representing a year-on-year increase of 2.1%.

3.5 Major operation of transportation segment and coal chemical segment Unit: RMB million

		Railway			Port			Shipping			Coal chemical
	January to	January to		January to	January to		January to	January to		January to	January to
	September	September	Percentage	September	September	Percentage	September	September	Percentage	September	September	Percentage
	2019	2018	change	2019	2018	change	2019	2018	change	2019	2018	change
			%			%			%			%
Revenue	30,211	29,191	3.5	4,441	4,579	(3.0)	2,418	3,037	(20.4)	4,347	4,296	1.2
Cost of sales	15,418	14,838	3.9	2,243	2,242	0.0	2,143	2,342	(8.5)	3,809	3,705	2.8
Gross profit	14,793	14,353	3.1	2,198	2,337	(5.9)	275	695	(60.4)	538	591	(9.0)
Gross profit	49.0	49.2	Decreased	49.5	51.0	Decreased	11.4	22.9	Decreased	12.4	13.8	Decreased
margin(%)			by 0.2			by 1.5			by 11.5			by 1.4
			percentage			percentage			percentage			percentage
			point			points			points			points

Note: From January to September 2019, decrease in revenue of shipping segment is mainly due to significant decrease in shipping freight; decrease in cost of sales is mainly due to decrease in charter costs.

- 19 -

3.6 Industry environment

In the first three quarters of 2019, the operation of macro-economy of China maintained stable development and the economic structure was continuously optimised; the Gross Domestic Product (GDP) grew at a rate of 6.2%. the Producer Price Index for Industrial Products (PPI) remained the same as to that of the previous year.

From January to September, the supply and demand in domestic coal market were generally balanced and the coal price fluctuated within a reasonable interval. Coal prices showed slightly downward fluctuations in the early third quarter affected by an increase in contribution of hydropower and a high level of coal inventory of power plants; the demand for coal from coastal regions increased in September, with a stable and slight recovery in coal prices. As of the end of September, the price index of Bohai Bay thermal coal (5,500 kcal) was RMB578/tonne, increasing by RMB8/tonne compared with that at the beginning of the year. In the first three quarters of 2019, the average price index was RMB577/tonne, representing a year-on- year slight increase of 1%.

From January to September, total raw coal production in the PRC was 2.74 billion tonnes, representing a year-on-year increase of 4.5%, of which raw coal production in the third quarter recorded a year-on-year increase of 8.9%. The accumulative coal import amounted to 0.251 billion tonnes, representing a year-on-year increase of 9.5%.Thermal power generation by power plants above a designated scale in China amounted to 3,802.0 billion kWh, representing a year-on-year increase of 0.5%. The average utilisation hours of thermal power equipment represented an decrease of 101 hours as compared with the corresponding period of last year.

It is expected that the supply and demand of the coal market will be in balance in the fourth quarter. Coal price may fluctuate due to factors such as winter peak.

Note: This section is for reference only and does not constitute any investment advice. The information in this section was derived from sources such as the National Bureau of Statistics, China Coal Market Network, China Coal Resource Network and China Electricity Council, etc. The Company has used its best endeavours to ensure the accuracy and reliability of information in this section, but does not assume any liability or provide any form of guarantee for the accuracy, completeness or validity of all or part of its content. If there is any error or omission, the Company does not assume any liability.

- 20 -

3.7 Completion of business plans

Particulars on completion of business plans of the Group for 2019 as at the end of September are set out below:

			Completion
			from January to
Items	Unit	Target for 2019	September 2019	Completion rate
				%
Commercial coal production	100 million tonnes	2.9	2.141	73.8
Coal sales	100 million tonnes	4.27	3.317	77.7
Total power output dispatch	100 million kWh	1,431	1,093.4	76.4
Revenue	RMB100 million	2,212	1,778.49	80.4
Cost of sales	RMB100 million	1,441	1,185.53	82.3
Selling, general and	RMB100 million	135	78.79	58.4
administrative expenses
(including R&D expenses)
and net finance costs
Change in unit production cost	/	Year-on-year	Year-on-year	/
of self-produced coal		increase not	increase by
		exceeding 5%	12.4%

Subject to various factors such as progress of land acquisition for quarry, execution of certificates for production and changes in geological conditions for mining in coal mines, commercial coal output of the Group from January to September 2019 reached 73.8% of the annual plan. Currently, the Group actively adopts measures to promote relevant works.

However, investors are reminded to be aware that the 2019 annual commercial coal output may be lower than that of the annual plan subject to objective uncertainties.

The Group recorded a significant year-on-year increase in unit production cost of self-produced coal from January to September 2019. Subject to the season, safety and environmental protection inspection and other factors in the fourth quarter, investors are reminded to be aware that unit production cost of self-produced coal of 2019 is expected to fluctuate on a year-on-year increase of approximately 13%.

- 21 -

3.8 Progress of significant events and the impact thereof as well as the analysis and explanations for the solutions

Applicable

✓ Not applicable

3.9 Commitments that have yet to be fulfilled within the stated time frame during the reporting period

Applicable

✓ Not applicable

3.10 Warnings and explanations with regard to forecast of a probable loss in respect of the accumulated net profits from the beginning of the year to the end of the next reporting period or any significant changes as compared to the corresponding period of last year

Applicable	✓	Not applicable
3.11 Definition
China Shenhua/the		China Shenhua Energy Company Limited
Company
The Group		the Company and its subsidiaries
China Energy		China Energy Investment Corporation Limited
GD Power		GD Power Development Co., Ltd.
Joint Venture Company	the joint venture company jointly established by
		the Company and GD Power with their respective
		equity interests and assets held in relevant coal-
		fired power generation companies
Shenhua Finance		Shenhua Finance Co., Ltd.
Company

- 22 -

China Accounting	the Accounting Standards for Business Enterprises,
Standards for Business	Application Guidance to Accounting Standards
Enterprises	for Business Enterprises, Interpretations of
	Accounting Standards for Business Enterprises and
	other related requirements issued by the Ministry
	of Finance of the People's Republic of China
International Financial	International Financial Reporting Standards
Reporting Standards	issued by the International Accounting Standards
or IFRSs	Committee

By order of the Board

China Shenhua Energy Company Limited

Huang Qing

Secretary to the Board of Directors

Beijing, 28 October 2019

As at the date of this announcement, the Board comprises the following: Mr. Wang Xiangxi, Dr. Li Dong, Mr. Gao Song and Mr. Mi Shuhua as executive directors, Mr. Zhao Jibin as non-executive director, and Dr. Tam Wai Chu, Maria, Dr. Peng Suping, Dr. Jiang Bo, Ms. Zhong Yingjie, Christina as independent non-executive directors.

- 23 -

APPENDIX

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

For the nine months ended 30 September

	2019		2018
	RMB million	RMB million
	(unaudited)	(unaudited)
Revenue
Goods and services	177,849	194,084
Cost of sales	(118,553)	(126,293)
Gross profit	59,296		67,791
Selling expenses	(470)	(490)
General and administrative expenses	(5,784)	(6,485)
Research and development expenses	(259)	(235)
Other gains and losses	1,933	35
Other income	456	469
Loss allowances	140	299
Other expenses	(199)	(787)
Interest income	728	796
Finance costs	(2,094)	(3,492)
Share of results of associates	490	348
Profit before income tax	54,237		58,249
Income tax expense	(11,084)	(12,677)
Profit for the period	43,153		45,572

- 24 -

	2019		2018
	RMB million	RMB million
	(unaudited)	(unaudited)
Other comprehensive income for the period
Item that will not be reclassified to profit or loss,
net of income tax
Remeasurement of defined benefit obligations	37		(24)
Fair value changes on investments in equity	0	75
instruments at fair value through other
comprehensive income
Share of other comprehensive income of	4	0
associates
Item that may be reclassified subsequently to profit
or loss, net of income tax
Exchange differences	114		174
Share of other comprehensive income of	(2)	9
associates
Fair value changes on investments in debt	36	0
instruments at fair value through other
comprehensive income
Other comprehensive income for the period,	189		234
net of income tax
Total comprehensive income for the period	43,342		45,806

- 25 -

Profit for the period attributable to:

Equity holders of the Company Non-controlling interests

Total comprehensive income for the period attributable to:

Equity holders of the Company Non-controlling interests

Earnings per share

- Basic (RMB)

2019	2018
RMB million	RMB million
(unaudited)	(unaudited)

36,250 37,207

6,903 8,365

43,153 45,572

36,408 37,394

6,934 8,412

43,342 45,806

1.823 1.871

- 26 -

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2019

		As at 30	As at 31
	September 2019	December 2018
		RMB million	RMB million
		(unaudited)	(audited)
Non-current assets
Property, plant and equipment	246,833		257,349
Construction in progress	42,472		36,585
Exploration and evaluation assets	950	951
Intangible assets	3,467	3,623
Right-of-use assets	17,580	N/A
Interest in associates	40,086	10,047
Equity instruments at fair value through other	842	811
comprehensive income
Other non-current assets	33,228	29,456
Lease prepayments		N/A	16,425
Deferred tax assets		3,206	3,083
Total non-current assets		388,664		358,330
Current assets
Inventories	13,209		9,967
Accounts and bills receivables	12,991	13,055
Prepaid expenses and other current assets	54,110	54,702
Restricted bank deposits	8,563	8,607
Time deposits with original maturity over three	1,738	1,735
months
Cash and cash equivalents	85,607	61,863
Assets classified as held for sale		0	83,367
Total current assets		176,218		233,296

- 27 -

		As at 30	As at 31
	September 2019	December 2018
		RMB million	RMB million
		(unaudited)	(audited)
Current liabilities
Borrowings	3,988		5,772
Accounts and bills payable	22,189		26,884
Accrued expenses and other payables	56,073		52,737
Current portion of bonds	3,534		0
Current portion of lease liabilities	156	N/A
Current portion of long-term liabilities	371	457
Income tax payable	3,325	4,213
Contract liabilities	6,504	3,404
Liabilities associated with assets classified as held	0	29,914
for sale
Total current liabilities		96,140		123,381
Net current assets	80,078		109,915
Total assets less current liabilities	468,742		468,245
Non-current liabilities
Borrowings	39,798		46,765
Bonds	3,507	6,823
Long-term liabilities	2,150	2,092
Accrued reclamation obligations	3,321	3,191
Deferred tax liabilities	537	537
Lease liabilities		666	N/A
Total non-current liabilities		49,979		59,408
Net assets	418,763		408,837

- 28 -

		As at 30	As at 31
	September 2019	December 2018
		RMB million	RMB million
		(unaudited)	(audited)
Equity
Share capital	19,890		19,890
Reserves	330,633		311,803
Equity attributable to equity holders of the	350,523		331,693
Company
Non-controlling interests		68,240		77,144
Total equity	418,763		408,837

- 29 -

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended 30 September

	2019		2018
	RMB million	RMB million
	(unaudited)	(unaudited)
Operating activities
Cash generated from operations	68,852	83,087
Income taxes paid	(12,095)	(15,265)
Net cash generated from operating activities	56,757		67,822
Investing activities
Acquisition of property, plant and equipment,	(10,233)	(13,089)
intangible assets, exploration and evaluation
assets, additions to construction in progress and
other non-current assets
Increase in lease prepayments	(768)	(40)
Proceeds from disposal of property, plant and	548	463
equipment, intangible assets and other non-
current assets
Disposal of equity instruments at fair value through	0	2
other comprehensive income
Proceeds from disposal of derivative financial	0	106
instruments
Investments in associates	(1,497)	(704)
Cash and cash equivalent disposed of to establish	(1,510)	0
Beijing GD Power Co., Ltd.
Repayments of net cash received from Shenhua	(1,562)	0
Contributed Entities during the transition period
Dividend received from associates	158	51
Interest received	1,216	712
Decrease/(increase) in restricted bank deposits	44	(818)
Placing of time deposits with original maturity over	(680)	(2,213)
three months

- 30 -

		2019		2018
		RMB million	RMB million
		(unaudited)	(unaudited)
Maturity of time deposits with original maturity	677		1,633
over three months
Disposal of financial assets	31,473		0
Investment in bank wealth management products	(31,087)	0
Investments in other equity instruments	(31)	0
Collection of entrusted loans	9,465		0
Net cash used in investing activities	(3,787)	(13,897)
Financing activities
Capital element of lease rentals paid	(132)	0
Interest element of lease rentals paid	(22)	0
Interest paid	(2,435)	(3,188)
Proceeds from borrowings	2,770		31,562
Repayments of borrowings	(11,707)	(23,439)
Repayments of bonds	0		(3,208)
Contributions from non-controlling shareholders	340		189
Distribution to non-controlling shareholders	(1,051)	(4,800)
Distribution to shareholders of the Company	(17,498)	(18,310)
Proceeds from bills discounted		470		29
Net cash used in financing activities	(29,265)	(21,165)
Net increase in cash and cash equivalents	23,705		32,760
Cash and cash equivalents as at the beginning of the	61,863		71,872
period
Effect of foreign exchange rate changes	39		71
Cash and cash equivalents as at the end of the	85,607		104,703
period

- 31 -