China Shenhua (01088) has disclosed preliminary first-half results, with net profit anticipated to fall between RMB 25.6 billion and RMB 27.6 billion. This marks a significant year-on-year decline of 15.8% to 21.9%, yet it aligns closely with projections, representing 51% to 55% of annual forecasts and 50% to 54% of market expectations.
The implied second-quarter net profit, ranging from RMB 12.2 billion to RMB 14.2 billion, shows a 5% to 19% year-on-year decrease, while quarter-on-quarter performance fluctuates from a 9% dip to a 6% rise. The company attributes the profit downturn primarily to lower average coal prices and reduced sales volumes.
A 'Buy' rating has been maintained, with a target price set at HKD 36.3.
Restated figures indicate first-half coal output at 165.4 million tons, down 1.7% year-on-year, and sales at 204.9 million tons, plunging 10.9%, accounting for 49% and 46% of full-year estimates, respectively. Power generation totaled 98.78 billion kWh, and dispatched electricity reached 92.91 billion kWh, both declining approximately 7.4% and 7.3% year-on-year, each representing 48% of the annual outlook.
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