On August 16, China Shenhua disclosed a preliminary plan for issuing shares and paying cash to purchase assets, raise supporting funds, and conduct related party transactions, clarifying the asset conditions of 13 target companies. This transaction involves 13 target companies with businesses covering coal mining, pithead coal power, coal chemical industry, and other sectors.
As of the end of 2024, the target assets had combined total assets of 258.362 billion yuan and combined net assets attributable to parent company of 93.888 billion yuan. In 2024, the target assets collectively achieved operating revenue of 125.996 billion yuan, combined non-recurring net profit attributable to parent company of 8.005 billion yuan, and combined non-recurring net profit attributable to parent company after excluding the impact of long-term asset impairment losses of 9.811 billion yuan (the above data is unaudited, without considering internal consolidation elimination effects, and Jinshen Energy's data is calculated based on associated company standards by multiplying financial indicators by shareholding ratio).
China Shenhua Target Asset Conditions (Unit: 10,000 yuan)
Note: The target assets include 100% equity in Guoyuan Electric Power, 100% equity in Xinjiang Energy, 100% equity in Chemical Company, 100% equity in Wuhai Energy, 100% equity in Pingzhuang Coal Industry, 100% equity in Inner Mongolia Construction Investment, 41% equity in Shenyan Coal, 49% equity in Jinshen Energy, 100% equity in Baotou Mining, 100% equity in Shipping Company, 100% equity in Coal Trading Company, 100% equity in E-commerce Company, and 100% equity in Port Company. To avoid same-industry competition in wind power business-related assets, some wind power assets of Guoyuan Electric Power and Xinjiang Energy in this transaction are planned to be divested outside the target companies. Inner Mongolia Construction Investment's losses in 2023 and 2024 and current negative net assets were caused by previous production suspensions. It has now resumed work and production, achieving profitability in the first quarter of 2025.
The significance of this transaction for China Shenhua is mainly reflected in two major aspects: enhancement of overall strategic deployment capabilities and empowerment of power industry development.
From the perspective of overall strategic deployment:
First, resource and capacity leap. The injected 13 target companies encompass large coal enterprises such as Guoyuan Electric Power, Xinjiang Energy, and Pingzhuang Coal Industry, as well as pithead coal power assets like Inner Mongolia Construction Investment, and key links including Chemical Company, Port Company, and Shipping Company. This directly brings "dual enhancement" of resource reserve scale and core business capacity. Taking coal alone as an example, the addition of mega coal mines under Xinjiang Energy, such as Zhundong Open-pit Coal Mine (approved capacity of 35 million tons/year, China's second-largest open-pit mine) and Hongshaquan No.1 Mine (30 million tons/year), enables China Shenhua to achieve a qualitative leap in high-quality resource control and supply guarantee capabilities.
Second, full-chain deep synergy. The transaction is not a simple asset aggregation but pursues "1+1>2" strategic synergy. Upstream, new coal mining entities provide more stable, low-cost resource guarantees. Midstream, coal chemical platforms (such as Chemical Company) enhance clean and efficient coal conversion capabilities, while pithead coal power assets (such as Inner Mongolia Construction Investment) strengthen coal-power integrated operations and achieve cascaded energy utilization. Downstream, ports (Port Company), shipping (Shipping Company), coal trading (Coal Trading Company), and e-commerce (E-commerce Company) construct an autonomous, controllable, and efficiently connected logistics network and digital marketing system. This seamless connection of the entire "production-transportation-sales-utilization" chain will greatly optimize resource allocation efficiency and reduce internal consumption and transaction costs.
Third, qualitative change in supply guarantee capability. The injection of new assets, particularly coal mines and pithead power plants in strategic resource bases like Xinjiang and Inner Mongolia, along with supporting port and shipping assets, enables China Shenhua to build a multi-regional coordinated supply guarantee network spanning east and west and radiating nationwide. Relying on intensive unified management platforms, the company's cross-regional resource allocation will be more rapid when responding to surging electricity and coal demand during critical periods such as "peak summer" and "winter heating," fundamentally enhancing emergency response capabilities and supply stability, truly shouldering the central enterprise's core responsibility of ensuring basic energy supply.
From the perspective of empowering power industry development:
First, pithead coal power layout strengthens supply guarantee foundation. Target assets such as Guoyuan Electric Power and Inner Mongolia Construction Investment have core businesses including pithead coal power. This model of building power plants near coal mine pitheads has natural advantages of stable coal sources, low transportation costs, and fast fuel supply response. After integration into China Shenhua's system, it will further strengthen the listed company's ability to convert energy locally in core coal production areas. During peak electricity demand periods, these pithead power plants will become key support points for ensuring regional and even cross-regional electricity supply, and their stable operation is crucial for alleviating grid pressure and ensuring residential electricity use. Although Inner Mongolia Construction Investment experienced losses due to production suspension, it has achieved resumed production and turned profitable in the first quarter of 2025. Its capacity recovery and integration into the integrated system has significant importance for regional power guarantee.
Second, full industrial chain synergy optimizes power costs. China Shenhua's unique "coal-power-railway-port-shipping-chemical" integrated model is unprecedentedly strengthened through this transaction. Upstream self-owned coal mines ensure low-cost, stable fuel supply for pithead and railway-adjacent power plants. Self-owned railways, ports, and shipping significantly compress logistics costs and improve efficiency. Coal chemical business achieves coal value appreciation. This deep synergy effect transmitted to the power sector means stronger cost control capabilities and profit resilience. Even during coal price fluctuation periods, it can provide strong support for stable power business operations, ultimately benefiting the overall stability of the power system.
Third, intelligent and green empowerment for sustainable development. The injected assets are not only large in scale but also possess advanced green and intelligent genes. For example, all open-pit coal mines of Xinjiang Energy have met the autonomous region's intermediate intelligent coal mine requirements, actively promoting unmanned and minimally-manned production, significantly improving safety and efficiency. Their adopted "topsoil restoration + underground pipeline micro-irrigation" intelligent ecological restoration system significantly improves vegetation survival rates in mining areas, becoming a national-level green mine benchmark. These advanced green mining and intelligent operation experiences, promoted through China Shenhua's platform, will provide strong driving force for clean and low-carbon transformation at the source of the coal-power industrial chain (coal production), helping the entire power industry develop toward safer, more efficient, and more environmentally friendly directions.
As the listed integration platform for "coal, power (pithead coal power), transportation, and chemical" assets under China Energy Investment Group, China Shenhua will further integrate coal mining, pithead coal power, coal chemical, and logistics service business segments through this transaction, significantly increase the listed company's resource reserve scale and core business capacity, further optimize full industrial chain layout, create favorable conditions for promoting clean production, reducing operating costs, and enhancing sustainable profitability. This benefits the company in reducing transaction costs, optimizing capacity matching, and improving overall profitability, thereby achieving "1+1>2" strategic value that exceeds simple business aggregation.
China Shenhua's A-share stock will resume trading from market opening on Monday, August 18.
Additionally, China Shenhua announced that the company plans to conduct mid-term profit distribution for 2025. The mid-term profit distribution amount will be no less than 75% of the net profit attributable to company shareholders achieved in the first half of 2025, and no more than the net profit attributable to company shareholders achieved during that period.
China Shenhua's performance forecast for the first half of 2025 shows that the expected net profit attributable to company shareholders for the first half of 2025 is between 23.6 billion yuan and 25.6 billion yuan.