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    1898   CNE100000528

CHINA COAL ENERGY COMPANY LIMITED

(1898)
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China Coal Energy : 2021 INTERIM REPORT

09/14/2021 | 05:42am EDT

(A joint stock limited company incorporated in the People's Republic of China with limited liability) Stock Code : 01898

INTERIM REPORT

2021

Contents

Chairman's Statement

2

Management Discussion and Analysis of Financial Conditions and Operating Results

4

Business Performance

24

Investor Relations

31

Corporate Governance

32

Disclosure of Major Events

34

Report on Review of Condensed Consolidated Financial Statements

40

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

41

Condensed Consolidated Statement of Financial Position

43

Condensed Consolidated Statement of Changes in Equity

46

Condensed Consolidated Statement of Cash Flows

47

Notes to the Condensed Consolidated Financial Statements

48

Company Profile

82

Definitions

84

Note: In this report, unless otherwise indicated, all financial indicators are presented in RMB.

INTERIM REPORT 2021

1

Chairman's Statement

Dear Shareholders,

In the first half of 2021, China's economic operation strengthened and improved steadily as the economy gained further momentum. China Coal Energy studied the party history in depth as a source of wisdom, seized the development trend and remained steadfast in its strategy. With the continuous pickup in market demand, the Company insisted on making progress steadily and coordinated and promoted business development with quality in mind, laying a solid foundation for a good start to the "14th Five-Year Plan".

Deepening the supply-side structural reform and focusing on quality industry development. The Company formulated its development plan for the "14th Five-Year"period and set its long-termgoals for 2035, paid attention to the correlation between the current situation and the long-termimpact, made preparations to achieve the goals of "carbon emissions peak and carbon neutrality", and established the idea of "strengthening the primary coal business, optimising the coal, electricity and chemical integrated industry chain and developing new energy vigorously by leveraging its advantages" to build a world-classenergy enterprise that is "complemented by multiple types of energy, green with low carbon emissions, an exemplar of innovation and under modern governance". In the first half of the year, the Company continued to ramp up its advanced production capacity, and its assurance capacity of energy supply and market share increased significantly. The output of commercial coal was 56.49 million tonnes, representing an increase of 6.4% year on year and 11.7% over the first half of 2019; coal sales volume amounted to 148 million tonnes, representing an increase of 28.2% year on year and 43.7% over the first half of 2019. The Company focused on the clean and efficient use of coal and the coal, electricity and chemical integrated industry chain achieved continuous optimized development. The output of major coal-chemicalproducts was 2.31 million tonnes, representing an increase of 20.2% year on year and 8.0% over the first half of 2019. Electricity generation amounted to 7.03 billion KWh, representing an increase of 11.4% year on year and 114.3% over the first half of 2019. Key projects such as Dahaize Coal Mine with an annual output of 15 million tonnes of high-qualitythermal coal, Libi Coal Mine with an annual output of 4 million tonnes of anthracite and Pingshuo 2×350MW low calorific value coal power generation project progressed smoothly. The Tuke Project of Annual Methanol Output of 1 Million Tonnes from Synthetic Gas reached its designed load successfully in its first trial run. The comprehensive energy service capabilities continued to increase. The production value of equipment amounted to RMB4.78 billion, representing an increase of 3.2% year on year and 10.9% over the first half of 2019. The asset scale of financial operations was RMB57 billion, representing an increase of 54.3% year on year and 41.4% over the beginning of 2021. Meanwhile, the Company adhered to the national plan closely and actively promoted projects in the new energy sector.

Keeping up with market demand by continuing to enhance quality and efficiency and setting a new record for operating results in the same period in history. In the first half of the year, the Company registered revenue of RMB98.7 billion, representing an increase of 60.8% year on year and 61.7% over the first half of 2019. Profit before income tax was RMB14.4 billion, representing an increase of 149.3% year on year and 70.1% over the first half of 2019. Profit attributable to the equity holders of the Company was RMB8.5 billion, representing an increase of 237.9% year on year and 107.1% over the first half of 2019. Net cash inflow from operating activities was RMB20.4 billion, representing an increase of 122.4% year on year and 99.4% over the first half of 2019. The weighted average return on equity was 8.2%, representing an increase of 5.6 percentage points year on year and 3.8 percentage points over the first half of 2019. Ratio of profits to cost was 16.7%, representing an increase of 6.4 percentage points year on year and

1.1 percentage points over the first half of 2019. As at the end of June 2021, the Company's gearing ratio was 42.9%, suggesting a sound and prudent financial structure.

Deepening reform and innovation and keeping up the vitality and momentum of high-quality development. In the first half of the year, the Company worked on the Three-yearAction Plan for the Reform of State-ownedEnterprises by establishing the board of directors for affiliated companies, setting the fixed-termappointment system and conducting contractual management on management members, rolling out the medium and long-termincentive plans on a trial basis steadily, strengthening strategic management and control transformation in accordance with the principles of specialisation, simplification and regionalisation. The headquarter led the "Larger Department Reform" and implemented competitive recruitment for all staff. The Company vigorously strengthened technological innovation. It obtained 93 authorised patents and filed more than 80 technological achievements. Two national technological projects

2 CHINA COAL ENERGY COMPANY LIMITED

Chairman's Statement

("Key Technologies for Electrical Parts and Control System of Mining Equipment" and "Research on Raw Materials and Manufacturing Technology of High-end Hydraulic Support") achieved results in their respective phases. The construction of five national first batch of intelligent demonstration coal mines including East Open Pit and Wangjialing were actively promoted. In response to the common technical problems in the industry, two major technological projects ("Prevention of Rock Burst in Mines in Inner Mongolia and Shaanxi" and "Key Intelligent Technology and Engineering Demonstration for Coal Mines") were implemented to intensify research on key technologies and lead the industry's technological advancement. The construction of "Digital China Coal" made solid progress, and such digital transformation would help the Company's high-quality development.

Acting in line with the philosophy of safe and green development and continuously reinforcing the foundation for high-quality development. The Company implemented the Three-yearPlan for Production Safety Rectification, promoted vertical management of safety supervision and further defined the bodies responsible for production safety at all levels, which all boded well for production safety. The Company vigorously carried out energy conservation, consumption reduction and environmental restoration projects, insisted on green development and strengthened ecological protection, and no environmental emergencies occurred. The Company continued to normalise epidemic prevention measures, and all employees were not infected. The Company strictly complied with the regulatory requirements of capital markets, continued to improve corporate governance and information disclosure, strengthened compliance management and internal control and has been rated as an Outstanding Enterprise in Information Disclosure by the Shanghai Stock Exchange for years.

In the second half of the year, China Coal Energy will study in depth and act in line with the spirit of General Secretary Xi Jinping's speech at the founding anniversary of the Communist Party of China, adhere to the keynote of seeking progress while maintaining stability, and implement the new development philosophy fully, accurately and comprehensively. The Company will also focus on the goal of building a world-class energy enterprise, vigorously improve the systematic, predictive and creative aspects of work, better coordinate development with safety, give full play to the driving role of reform and innovation and fully complete the targets and tasks for the year. First, based on the "14th Five-Year Plan", the Company will speed up the construction of key projects, actively carry out projects in the new energy sector and further optimise and transform its business structure in the industry. Second, the Company will push ahead with the Three-year Action Plan for the Reform of State-owned Enterprises, continue to deepen the reform of systems and mechanisms, address key and difficult issues and successfully complete the tasks in this phase. Third, the Company will run in line with world-class standards towards the goal of high-quality development, vigorously improve quality, efficiency and efficacy and fully complete the annual production and operation plan. Fourth, the Company will step up technological innovation, focus on safe, green and intelligent mining and clean, efficient utilisation of coal with low carbon emissions, advance key and core technologies. Fifth, the Company will continue to improve security capability, optimise the safety responsibility system, keep strengthening ecological preservation, environmental protection and energy conservation, further normalise epidemic prevention measures, coordinate liquidity management and effectively prevent and mitigate various risks to ensure its stable, sustainable and healthy development. Sixth, the Company will strengthen corporate governance, continue to improve the quality of information disclosure, strengthen corporate governance, keep communicating with investors, strive to enhance its corporate value and actively maintain its good image in the capital market.

The Company's management and staff of all levels will keep their original aspirations and missions in mind, make persistent efforts and forge ahead, make positive contributions to the healthy development of the national economy and capital market and reward all shareholders and investors with excellent performance.

Wang Shudong

Chairman

Beijing, the PRC

25 August 2021

INTERIM REPORT 2021

3

Management Discussion and Analysis of Financial Conditions and Operating Results

The following discussion and analysis should be read in conjunction with the Group's reviewed condensed interim financial information and the notes thereto. The Group's condensed interim financial information has been prepared in accordance with the International Accounting Standard 34 "Interim Financial Reporting".

  1. OVERVIEW

In the first half of 2021, the Group adhered to the high-quality development as the guide, deepened its reform and innovation, seized the favorable opportunity of continuous recovery of production demand, scientifically organized production, strengthened the synergy of production and sales, greatly improved quality and efficiency, as well as took scientific control of cost leading to significant growth in operating results and steady improvement in operation quality. The Group realised revenue of RMB98.720 billion, representing a year-on-year increase of 60.8% and an increase of 61.7% when compared to the first half of 2019; profit attributable to equity holders of the Company amounted to RMB8.545 billion, representing a year-on-year increase of 237.9% and an increase of 107.1% when compared to the first half of 2019; net cash inflow from operating activities amounted to RMB20.410 billion, representing a year-on-year increase of 122.4% and an increase of 99.4% when compared to the first half of 2019.

The Group actively released the advanced coal production capacity and production volume of commercial coal amounted to 56.49 million tonnes, representing a year-on-year increase of 3.42 million tonnes; sales volume of self-produced commercial coal amounted to 55.74 million tonnes, representing a year-on-year increase of

2.42 million tonnes. The Group kept up with the market and strengthened marketing organization with the sales volume of proprietary trading coal of 88.50 million tonnes, representing a year-on-year increase of 26.93 million tonnes. Coal chemical enterprises strengthened lean management and maintained the device of work safety, stable production, long-period operation, fully-loaded operation and optimum operation. The increase in production, sales volume and selling prices of major coal chemical products offset the impact of rising procurement prices of coal effectively, which contributed profit from operations of RMB1.757 billion, representing a year-on-year increase of RMB862 million. Equipment Company promoted reform and innovation to stimulate the vitality of the system and mechanism, realizing revenue of RMB4.956 billion, profit before tax of RMB239 million, representing a continuous year-on-year growth. Finance Company leveraged the advantage of information technology of the digital financial platform and strengthened the lean capital management, realizing profit before tax of RMB470 million, representing a year-on-year increase of RMB65 million. The profitability of shareholding enterprises of the Group improved, the share of profits attributable to associates and joint ventures was RMB1.853 billion, representing a year-on-year increase of RMB1.589 billion.

4 CHINA COAL ENERGY COMPANY LIMITED

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

China Coal Energy Company Limited published this content on 14 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 September 2021 09:41:06 UTC.


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Financials
Sales 2021 190 B 29 713 M 29 713 M
Net income 2021 13 531 M 2 119 M 2 119 M
Net Debt 2021 49 201 M 7 705 M 7 705 M
P/E ratio 2021 4,53x
Yield 2021 6,53%
Capitalization 91 245 M 14 289 M 14 289 M
EV / Sales 2021 0,74x
EV / Sales 2022 0,68x
Nbr of Employees 41 593
Free-Float 42,0%
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Number of Analysts 12
Last Close Price 4,44 CNY
Average target price 5,07 CNY
Spread / Average Target 14,2%
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Managers and Directors
Qiao Lin Chai Chief Financial Officer
Wen Zhang Wang Chairman-Supervisory Board
Shu Dong Wang Chairman
Ke Zhang Independent Non-Executive Director
Cheng Jie Zhang Independent Non-Executive Director