Sinolink Securities: The coal production and sales of Jinkou Coal Industry are stable but face short-term pressure, and there is immense future potential for asset injection.

According to the research report of Industrial Securities, Jinkou Coal Industry achieved a net profit attributable to the parent of 876 million yuan in the first half of the year, a year-on-year decrease of 39.01%; the net profit attributable to the parent in Q2 was 364 million yuan, a year-on-year decrease of 44.55%. The main business of coal production and sales has stabilized and declined, and profitability has declined. Affected by the market coal price and the backward long-term agreement price, the company's coal sales volume slightly declined in the first half of the year. In terms of prices: the average selling price of commercial coal is 422 yuan per ton, compared to 495 yuan per ton in the same period last year, a year-on-year decrease of 14.8%. In terms of costs: thanks to the company's excellent cost control capabilities, the sales cost per ton of coal is approximately 261 yuan, a year-on-year decrease of 2.9%. Overall, the gross profit per ton of coal is 161 yuan, a year-on-year decrease of 29%. The company continues to strengthen cost control, with a year-on-year decrease of 25.70% in management expenses in the first half of the year and a year-on-year decrease of 160.73% in financial expenses. With sufficient cash, it provides a solid guarantee for the future growth and development of the company and shareholder returns. Jinkou Coal Industry, as the coal asset listing platform of Jinneng Holdings Group, has high-quality coal assets and steady progress in asset injection, with broad prospects for future growth.