China Coal Energy Company Limited (1898) Earnings Call Transcript & Summary

Welcome to join us in China Coal Energy Company 2022 Half Year Conclusion Event. And before the [indiscernible] speech, we will have the Q&A session. I welcome the moderator, honorable stakeholders, investors and the sector junction of the President Board factory. Welcome to join us to in 2022, the half year conclusion thanks for your support. And today, we have the Chief of the Financial Sector, Chaitali, and also the Korea Department, [indiscernible]; the Security Department, Finance Sales Center and Chemical Center. Allow me to introduce about the situation of the industry as well as for the half year performance and the plan for the next half year. And before the introduction, I would like to offer you an elaboration at all standard according to the China accounting standard. 2022, the first half year recalling. In the first half year, as stabilization policy has put into implementation and all has been returning very stably, especially for the release of the capacity and guarantee of the coal supply can be realized during the January to July, that's 2.56 billion tonnes, 11.5 percentage growth. We can see that yielding amount has been growing a lot. In the first half year, that 55 00 for big truck, especially for the steam coal, actually, the average price of RMB 721 per each tonnes, like RMB 4 for each tonnes less. And also that is lower than the limit RMB 49 lower than the limit. And in the market [indiscernible] 5500, the steam coal, the price of 11 55 and 209 growth. The price is at RMB 1,583 tonnes, the lowest price is RMB 773, the average is RMB 1,176 per each tonne. From January to July, import is around 179 million tonnes, 18.2 percentage less. And July, the import is around 23.52 million, 22.1 percentage dropping and also like 10.9 percentage less compared to the previous months. The first half year operation situation, I will introduce something on that. If any year that they're following the China Central Department and the Center of the CPC as well for international Chinese state asset and security department, and we have been working in high-quality development as our very guideline and to guarantee stability of the coal supply, to guarantee stability of the economy as well as for the growth of the social economy to make our part of contribution. At first need guarantee the supply of the power stably -- guarantee the growth the first release on the capacity of the coal, especially for the commodity coal that's around 59.523 million tonnes, like 2.47 million tonnes growth, 4.4 percentage growth. And for the commodity coal sales, 130 million tonnes, 22.237 million tonnes less, 14.4 percentage. And also for the made in China, 58.65 million tonnes, a 4.7 percentage growth. And also for other sales, what we call contract is 68.96 million tonnes, the 27.6 percentage of dropping. The pricing 752 for the commodity, 210 percentage growth, 58.7 percentage growth, contract is 833 and 243 growth, that is 41 percentage growth. And also for the product that 237 for the clinical product and also for [indiscernible] 26.91. And for PPE, that's 38.31. And for the [indiscernible] is 100.241. And for the methanol, 97.01. Sales is 0.71, that's production and the sales. And for chemical, for the price of the [indiscernible], that's 25.3 percentage growth. Methanol RMB 1,919 for each tonnes, like 224. And [indiscernible] growth 13.2 percentage growth. Third, about the equipment as well as for finance business growth. For the equipment of the code as 1.5E, that's 7.7 percentage growth, revenue was 54.15E, 9.2 percentage growth. [indiscernible] 100 million Chinese units. And also finance, as we case revenue is 11.225E, that's a 3.8 percentage, 3.8E more. 51 percentage of growth. That's the finance situation for revenue. For other businesses, including importing for the aluminum, as well as recruitment for other parts and for the revenues around 40.72E. And second, I would like to use about the market situation as well as for performance growth, 2021 half year, the revenue is around 1,180E that's 15.5 percentage growth. And also for the profit -- net profit behind to stakeholders, 133.77E, 75.7 percentage of growth. And [indiscernible] for the profit of the stakeholders, that's 145.29E, that is 9.5 percentage growth. And apart from a finance company, as well as for the other reasons of the asset processes and flows, and we got the cash in 200E and 49E, 7.2 percentage of growth for [indiscernible] for each stake. And also for the waited asset income, that's 11 percentage, that is 3.82 percentage growth. And for the debt, [indiscernible] and 3.5 percentage less compared to the previous year. And for the total debt, that's around 5.3 percentage of ratio and 5.2 percentage [indiscernible]. And for operation cash for each stake of [indiscernible], so 0.37 for each stake. And for each stock and for the profit, [indiscernible] RMB 0.8 or 9.2 percentage growth. I would like to use about the programs as well as for the project and for the green technology allocation. For the last -- for the previous half year, especially for the [ 1,500 one ] for the high quality of steam coals mainly to guarantee especially as we consider that a pilot program has been adjusted from 5 million to 20 million tonnes. That's proved scope of permitted quotation. And also for the [indiscernible], especially for the PE project has become into the production. The [indiscernible] project has come to production, had annual yielding. That's 0.9 million tonnes. For the annual 4 million, especially for smokeless for [indiscernible] has 2x250 megawatts has also in progress, especially for 13 megawatts for Shanghai new energy has been coming to construction, especially we are working in all these areas for the coal production between the new energy and the coal energy. The third part, we are working on the introduction of the plan for a prospect for 2022, the latter half year, especially given the tight supply of the global energy as well as we are stabling the price as well as to facilitate the progress and we believe that the price will maintain at a very rational level and currently still at a high level, especially as the economy has been recovering and stable policies has coming to be lending. That means less fluctuations. Plans for 2022, latter half year, and we will be working on stability, especially during the -- stability to ensure the high-quality development and the green energy development as well as for the storage of the power and transformation of the status mainly centered on the 45-year plan to facilitate the project construction and to finish guarantee security work, especially to assure that can realize the national strategy. The second for the national state-owned enterprises with 3 planned, we are also in compliance with that to assure legislation and to instill more vigor in that path, especially to facilitate the refined management, improve efficiency and to finish our projects, reduce the cost, increase of the efficiency. First, facilitation about innovation and scientifical, especially for the coal energy and transformation, transferring our technologies and to facilitate development by technology-driven way is mainly about security, environment, protection for the COVID prevention and to ensure that the [indiscernible] governance improvement and information share in transparency, communication between the stakeholders is more fully. And we will always remember our original task and to [indiscernible] our development with all the effort from all different spectrum and to return to stakeholders to make our contribution. That's my introduction. Thank you. I now come to the Q&A session. I welcome for the questions.

And we have multi-platforms for integrations. We have the phone as the priority for the questions arising, please. If you need to [Audio Gap] questions. #, okay, first, that number one. So in that way, you can ask the question if you want. #, okay, first and then #1. So you can raise your questions by the phone. Currently, there's no question. I would like to give the [ collective ] the question first. [indiscernible] that's 572 tonnes more for the asset tonnes, it is because of capacity increase of because of other reasons for such increasing [Audio Gap] 1,500 for the steam coal quality. 5 million to 20 million for coordination for the environment protection. That's dividend policies allocation. For the following [indiscernible] 6322, please ask you the question, please. Leaders are coming from Citibank.

I'm not sure if you can hear me.

Yes, please.

Congratulations for the first half year with such a very yielding profit. The 2 aspects I would like to ask. First mainly about the inflation. And for the end of the year, that will be mostly considered balance for the half year and for around 20 [indiscernible] less asset value. For the whole year, what will be the asset devalue? Second, I'd like to see, especially would you introduce about the full year prospect on the decrease of the financial situation.

Tim, please from finance sector. First, about asset devaluation. 19E for the asset value for the EP. And mainly, we are insisting on energy development -- green energy development, especially for 2021. [indiscernible] a very modernized vehicle like 1212 and also for 50 tonnes added scale. That means our guarantee, more guarantee for the production while guarantee supply for China coal, especially for geographic situation for the risk control, especially for the other mines, we are also working on evaluation, examine all these mines during the processive, especially with the asset devalue. We have been ready for that, especially for some mines, we have been working on the testing and for the lowering price, especially the coal prices at a high level for the chemical company also has some loss on the profit. We are also working on some like to ensure that asset has less value. That's what we call it. And for the latter half year, we are -- high-quality development is a very important governance. For the assets, we will still checking it very carefully. Based on the principles and requirement to ensure that to use a certain form to share the information. Second from the first quarter, second quarter, the cost for the latter, especially for the first quarter, the different mines need to have a material [indiscernible] and also maintenance can cause the less of the product yielding. That's to say, for the third quarter, first quarter has more cost, especially we still are working scientific management. So the cost is doing the regional scope. That's my answer to your cost -- to your question about the cost.

I'd like to ask another question. The sales on the coal price about maybe in China coal or the imported coal. We can see Mainland China coal has been increasing, but actually imported coal has less price. I wouldn't see the reason behind it or any driving force behind it.

The sales manager, please.

You talk about the loan contractor coal. I think that's still at a very stable stage. From the average price of the half year, 721 compared with the beginning year price as far less. [indiscernible] 719 is very stable price for that, for the long-term contract cost. And first of all, for markets, I believe that a lot of fluctuation has been a lot of fluctuation for the previous half year average price RMB 1,176 as a price, from RMB 1,583 to RMB 793 [ for spot ] price between that scope. And this normal price is RMB 890. So basically, also because the second quarter has the lockdown of the COVID is the main reason.

Another question from the Internet collection and my investor coming from Shenzhen center. About the future performance, dividend promises. And do we have more dividend for the stakeholders and more share of dividends for the stakeholders or less?

The number affected by many factors, we believe, including the price of the product has a lot of impact for the prediction. There's a lot of opportunity there actually from the production, still maintain at a very rationale reason to guarantee the stability. That's the first question. Second question, you talk about the dividend-sharing proportion for stakeholders from [indiscernible] listed, we're meeting at a very stable proportion. One aspect we consider about the company's improved requirement and also to take into consideration of the listed company, their regulation there. So we keep a very stable and rational scope, and there's no prediction to rise a lot of proportion for stakeholders or shareholders. Any more questions from the phone end? Could you [indiscernible] investor. [Operator Instructions]

Sorry for the offline. I'm told the asset -- got 2 questions. The first question mainly about dividend per share. I would like to ask that for the cash flow situation and also about the asset allocation -- expenditure allocation, especially for the asset flow, that's around about 115E. But actually, [indiscernible] proportion for the net proportion. I think that the stable for the financial situation. I'm going to ask you for the near future for the expenditure of the asset -- capital even buying back and should we consider like more dividend for the shareholders? Second, I would like to ask that for the market fluctuation, including for the -- maybe some potential risk for electricity coal, for steam coal and for the next second half year prediction on the pricing driving our lowering.

The first question you have talked about, especially for the cash is very -- is rich. Currently, we have no buyback arrangement or if there is a kind -- if there is, and we will do it according to the procedures. About the expenditure of the capital asset we made the yearly annual plan, the first half year, the proportion is not so high, especially affected by the pandemic of the [ weather ]. We believe the later half year, the expenditure of the asset will be according to the plan to put more input and to enhance efficiency. A second question you have mentioned about for the future market planning and our market department, please. About a latter half year plan, especially with China policy with stabilization, the demand is returning. I believe that the price will be stable for the latter half year [indiscernible] price, especially given the limitation of NDRC has a very fluctuation range for the pricing for another half year [indiscernible] will be lowering -- the favor will be lowering for the market of the high price. So there's less possibility to drive price and a lot -- and also a very less possibility to have higher price compared to previous year. Second question, I would like to ask that NDRC this year, especially for the long-term contracts and has a very limitation about for the spot price and for a long-term contract, what's the proportion between the 2 different ways by procurement. And after the first half year, according to your understanding that for the next half year, what would be the change for the proportion of the long-term contract and between that and the spot price? NDRC has published the 303 policy papers and the #4 claim about the price of the coal has very elaboration of that part. And our company has followed that very strictly [indiscernible] for the policies as well as for the price. Our long-term contract as the main proportion for the sales. And we hope for the latter half of the year. All according to China policies, as we believe that long-term contract price RMB 771 million just like mentioned by the former, our President, Secretary General, 22 percentage of growing. And that is very important for the performance for our company. That's a part of that.

Would you repeat more on the sport -- about the spot price and for the buying channels top line, there are some risks for this spot price.

We are working on facilitating about the development of the coal for the part importing. And imported coal turning better, we believe.

My name is [ Chano ]. I'd like to ask you 2 questions. One is mainly about the -- our industry this year from beginning of the year to the end of the year, including the [indiscernible] for the energy guarantee. Actually, first half year is very limited quotation. Though we set up a goal, actually, we put into the new added capacity that's very limited. So I would like to -- I want to know that from your analysis, does that mean the latter half year, new added capacity will be realized very fast in our NDRC Energy Bureau has been actively to earn more input of increasing the capacity, like enlarging of the more supply or the more proving for building new project [ of idea ], how many capacities we put into the new building projects? Does that mean that spot driving price can be curved like 1,200 or 1,100 maybe dropping, especially we know that daily consuming as part of price. And there are some kind of fluctuations of spot price. If the policies from the NDRC or the other energy bureaus administrative can be landed, so does that mean that the [indiscernible] will be dropping? Second I would like to ask is that for the cost for the Mainland China cost, will still be like -- especially we understand that the 3 quarters in the first quarter, there will be more rising on the cost. Like 50to 60 cost rising, even 90 to 100 more of the cost.

About the cost rising elaborate a little bit on that first question. About the 3E, actually, 300 million, now lending so fast. For the current mines that will be very beneficial, but for new buildings, not so fast, taking some time, especially from the national scope. We do not have a specific data to support that it still takes some time to respond to the policy. Actually, we believe that to have a very specific speculation, as you know, such kind of answer we can get from that equity formation. So we still believe that spot price is still running at a very high price in the near future. Secondly, you will talk about the cost. You're Very right. Yes, according to the number of reasons or situations of the habit, bascially that means we have the tradition that [indiscernible] are conducted at the latter half year, cost will be rising. And also, there are some pre-arranged work, mainly for preparation work for the first half year. So the second half year, that means more higher cost compared with the previous half year, even less compared with 325 [indiscernible] cost. So currently, we are running the cost well. [indiscernible] investor to ask you the question.

I have mailed to the company for 5 questions. I still have 4 more questions. 5 questions, first, have you answered recently. 270E tonnes and 140E tonnes for renovation for yearly exploration, that means that can be running 120 years for exploration mining if we do the math for the renovation and [indiscernible]. Another is for the depths, for the 800E and actually in cash, only 300 for the cash left. That's a contradiction. The third question is that for 800 cash, and actually the debt is 850E. For 190, for other type of -- other debt type of debt, does that mean the deposit or something like [ blurred ] there and profit is like 200E. If we have 400E for each year without consideration of the debt, a 2-year time we can be without debt coming that means winning the money and also about dividend, and after 2 years, if a company has become only the cash in, does that will be like the other -- like 100 percentage you're winning the money?

The first question about the running period for the [indiscernible] mines, the total renovation and the year term is not calculated. It's not doing the math in that way. Different mines renovation are different and vary. And also the capacity, the volume and operation situation is different, conditions different, and also about the situation in different mines are different. Also, we are working on backup resources exploration. We have no idea that when we're going to explore a new asset. For the back half, reservation is also what we are striving for. So if you do them as well as [indiscernible] years, it's difficult to answer. I cannot -- but in general, our current reservation can support our company running to have a stable growth that is enough resource to maintain that, guarantees that. Second question is mainly about our finance sector, about the cash flow and also -- why is mainly for -- we have deposited for the cash. For more than 3 months, we are -- we make it into the fixed deposit. Second is mainly for the production. There are limitation for use of the cash. That is also what is behind the limitation of user cash flow. So there is a gap between the cash in and the cash deposits. Second is about the dividend for the future about the company's performance, there are lots of reasons to impact that first, taking the first half year situation, like 400E for 1 year's performance, there is very uncertainty there. For the new [indiscernible] have such a 400E revenue or RMB 40 billion revenue, we still have no idea. According to the 25-year plan and for future arrangements and for improved investment, I believe that the dividend proportion, we will have no further arrangement. If there is arrangement, we will let you know at the very first time. Very clear question, clear answer. We are now, especially for the coking coal can be running for 90 years. And for others, steam coal and for other coals -- other type of coals maybe running longer. Last question about the previous half year to predict the whole year's revenue or profit, that's just an assumption. And 720 as a price. And managing Australia, the $400 for each tonnes of coal in Australia, and we just JPY 720 for each tonne. So if we can continue our good days, I think that will [indiscernible] share more profit.

I'm going to say congratulations for the very good performance for the half year. I'd like to show my concern about [indiscernible] still shutting down or why can't put into production again? 20 million tonnes capacity, how many can use for electricity? How many used for chem? And the sales price [indiscernible] chem coal, what will be the pricing for that? Second, for the chem coal. How many tonnes will be used for the chemical coal mainly in China proportion, how much proportion can be increased if we start put into running? [indiscernible] progress and our manufacturing development.

For the chem question from a -- all the investors that you have the situation the previous half year. According to the contract capacity requirement, from 1,500 to 20 million -- from 15 million to 20 million increasement next year that we put into 20 million, next year. 50% is used for chemical, other 50% for sales. [indiscernible] 10 million tonnes, 50% made in China, 10 million tonnes, [indiscernible] 80% made in China. [indiscernible] put into production has provided the coal now. After accomplish China coal supplied by ourselves with 80% can be supplied by ourself. About the coal price according to the price, the market no matter for the chemical of sales outside or according to the pricing market. Thank you.

[indiscernible] from Tianjin Company. So consolidation for such a very revenue, I ask a small question. First question. About the cash leaders mentioned about a 45-year plan. Could you offer us a number for the future several years? What will be the maintenance for the current asset input for 45-year plan what will be the input of the fixed asset [indiscernible] maintenance fixed asset. Second is about [ decarbon ] for our coal industry is very challenged, I believe, [indiscernible]. Do we have new investments into the dual carbon coal project. The third is that the market response about the carbon have fluctuation down -- for the average for the very similar parameter compared with the other years of coal. And there is a response that is less [indiscernible] for each unit of coal. The first is about the expenditure of the fixed assets and the development [indiscernible], please.

Remove the mask if you want. [Audio Gap] mainly including for the new construction of the under construction mine. And would you please speak through the phone, so we can hear clearly. Plus to guarantee the construction of the other construction mines. [Audio Gap] for the import of fixed assets and also production arrangements for the future. And still at about [indiscernible] level for the FX asset input. But for each year, we got a new plan. For next year beginning, we will arrange for a new plan for the fixed asset input. Thank you. Second about our energy plan -- new energy plan. Our company are devoting ourselves to also in the semi year plan, we are building very actively on the wind power and the solar power. And also, the West and North area, we are earning for the new resources for arrangement of renewable energy and -- but we will keep you transparent.

For the wind and the solar, would you introduce more on that? What's the scope? And what's the scale for the sovereign wind input?

There's no specific plan for how much we will invest into the wind and solar currently.

About the quality of the call at each unit can provide how much in summer our production of the mine [indiscernible] in Mongolia. And for sure when I hired -- for [indiscernible] there's a number of each different resources. Thank you.

[indiscernible] and we will offer you further information if we got more better on that. Thank you. We have more questions from phone. [Operator Instructions] There is no question from the phone line. Thank you. Now the answer from the net, and a very interesting question. Currently that the social economy has a lot of challenging and also some people said that we need to survive as a full priority. And do we misestimate the risk? And should we take the -- reducing the debt as our priority? Is there any priority to reduce the debt? Given such a challenge of this economic crisis worldwide. Any potential for the future risking prevention aspect with all the banks we have set up a very connection with the bank providing us very better proportion for the future financing. We have a very potential for future financing for the [indiscernible] exchange for the other benchmark. We are high-quality proportion for the asset portfolio. That is very guaranteed. Third, and we are enhancing the management assets, that means we have very good capability to manage our assets. For the future, we have readiness on that. And do we have the plan to reduce the debt. Currently, we have no platform reducing debt because on the debt, that's all according to the standard, which we do not reduce the debt. And earlier, yes, that's another question from Tenet. For next half year planning and for the coking coal price with international price airlines was a fraction in the China market, the sales manager please. The 2 questions I repeated. Firstly, that for the latter half year for imported the coal market, what's the planning on that? I'd like to answer the imported coal first. For imported coal price, it has a reduction compared with the previous year. International market, demand is huge supply mainly affected by the Russian war, Ukraine war, and rising the coal price in Russia and Ukraine has been rising a lot. And also the international market has been affected a lot. Importing of the coal will not be increasing in the near future. The second question I'd like to repeat for the steam coal price and the coking price of the coal will not be affecting the Chinese market. And I think I will answer all the parts of the question [indiscernible] for a while. [indiscernible] at security Washam, investor to answer ask your questions. Congratulations for such a very performance for the first half year for the project I've led to ask the first year that we can see [indiscernible]. There's no reporting about the progress. Is that because of delay of the progress of the construction that had [ all ] mine? Last year, we can see the [indiscernible] running end of the year that finished the completion of the construction, that 5 million tonnes of increasing. Actually, there's no review of the approval of production for next year as all the procedures can be finished next year with the 20 million tonnes, it can be -- quotation can be realized. And also about the project -- and the 2 projects, I'd like know more on the 2 projects. About [indiscernible] because the geographic situation are because of the other reasons and the gas and for the other disasters and very difficult challenges in there. But that is a slower comparison to the [indiscernible]. But actually, we are working side by side about [indiscernible] like you have asked about that as this year. Coming to the China [indiscernible]. We are working on the approving for the production for the procedures. Currently, we are working on the procedures to contract of the 20 million always running well, working -- we are working on it. Second about the chemistry, especially we have understand that the chemical profit price actually is dropping actually for the previous half year, we can say about urea is very good actually for the methanol and for the for the polyolefin, actually, the pressure there, especially for the product and for the profit as compared with second quarter, would you introduce a little bit on the PPE or the polyolefin price or the market situation? For the chemical -- from the chemical department, please. To answer the question for the chemical for the previous half year and stable, the market fluctuation is huge. The main reasons behind [indiscernible] for the coal price, the coal price in July, August still running high the price, that's good for the coal company, actually for the chemistry industry, that means very cost actually for methanol and for the olefin price. No rising on that. That's why less profit for the chemistry company. Urea and for ammonia [indiscernible] actually is working better. But for the latter half year stable because the big bio product, especially for chemistry products and has been dropped internationally. And currently, our olefin and methanol is still at the very cost margin, and we are not dropping further. Actually, if we anticipate higher rising, that will be also less possible but stable anticipated for the latter half year. That's my answer. China [indiscernible]. I would like to ask a question about Dahaize mine as a shareholders, actually, we can launch on my construction program. And I would like to ask that Dahaize mine, the quality [indiscernible], how much cash or the progress of the exploration, first question. And [indiscernible], from the market department about the [indiscernible] 1,500 for the -- is mainly for the steam coal used for power use, for steam coal use. Can you talk about the cost? About the [indiscernible] cost from the first half of the year, put into running -- putting into running in July to around -- putting into running that discounting cost is low. And also the equipment, the new maintenance is very less cost. But actually, because just putting into production, the production is still not coming to the peak. So the cost compared to the other mines is still high, at 200 for each tonne normally for [indiscernible]. You're talking about the price. The price according to the market price, I'd like to ask specifically for exporting to other countries. And how do we understand that -- does that mean according to -- that's not without the action by the contracted price? Or we just sell it by the international market price [indiscernible] mainly through our railroad to transport to other countries according to the NDR requirement and to maintain that at a rational level. Still not only about market product, mainly to guarantee the security supply of the China's power of exporting to other countries. Also based on the long-term contract for exporting for sales for [Audio Gap] [indiscernible] is number one, and to ask a question by the phone if you want. Number one, to ask for questions -- another question from Internet.

Foreign Language] How many proportion is used for electricity, how much proportion is for the chemistry?

50-50, we have told that already [Audio Gap] [Operator Instructions]

We need to see some matters about cut the costs and increase efficiency of the company. So question from Internet. What is about the production to have optimization management to reduce the cost of production. Second for financing. We are -- especially our support policy preferences with very good channels, top lines, and our financing costs can be reduced by the priority policies. [indiscernible] production procedures to cut the cost to optimize the operation to maintain a very low cost level. [indiscernible] for financing and to have a lower cost to reduce -- to assure the cost at a very stable level. [Audio Gap] Currently, China is facilitating electricity supply. So do you have a plan to construct new mines to support electricity production?

I'd like to answer the question. The company has a coal as the very pillar. We will devote ourselves further to assure that the national security of the power supply. So for the future, we will continue to build the new mines. That will be our very direction development. The coal will be our pillar, and we will guarantee a security of supply of energy. And also we will play for advantage of our status to also to use more different kind of coals to improve the transferring efficiency in order to improve efficiency of the -- to use the low thermal coal to produce more thermal.

Another question from Internet. For the chemistry coal, for the first half of the market situation and for the latter half year prediction for the chemistry coal.

We have answered the question. But if you want to, you can repeat. For the first previous half year, the chemistry market as per urea and for the ammonia urea, nitrogen, ammonia nitrogen and for other products is fair. But entering into the July, there are some dropping for the chemistry, mainly because the international market or the big bulk product in the July and August is like a season. And we predicted that for the latter half year, the price will be fluctuating, but there will be no rising where we -- in the very -- very big rise, no big rise. But also we believe that the current coal price in the latter half year, if we maintain a level of the cost of the coal price, then there will be less profit compared with the first half year for the chemistry. That's my answer. Thank you.

[indiscernible] Good afternoon, leaders. I would like to ask about the cost of the exploration of the mine -- the coal.

Geographic situation with all the challenges of the geographic challenge facing the cost [indiscernible] department, currently that for the open mine, there's not too much change at a normal scope.

Another question I would like to ask on Wangjialing project. Is that a new project or the new added project or the current project?

Wangjialing is a new added project. It can only be maintained for 3 or 5 years. And currently, that will be like extended to the East. That's just a subsidiary project. It's not the official funded project. To guarantee that the project can be high efficient is [indiscernible] a very effective exploration. We build up a square, we built up a [indiscernible] to ensure that it can be maintaining the requirement to guarantee the stability, to guarantee the efficiency. What we call is just like some subsidiary projects or extensive project as my question.

Another question from the Internet. In July the chemistry department has a dropping. What's the reason behind it? Is that because of maintenance? If it's because of maintenance, when we can return?

Yes, you have answered yourself. It's because of maintenance. As you know we are in maintenance. And really in August 5, we have been returning to production on [indiscernible] in August 15 had returning to back and running. That means maintenance has ended.

Another question from Internet asking about the chemistry and for the coal. What's the advantage of integration between the coal production and the coal chemistry?

The integration between the coal and the coal chemistry advantage, that is very important and we have been proving again and again. I think that the coal is a very pillar. Just like we have mentioned, the coal self-supply, 80% just like I mentioned. Not only about the price, but also about the quality. If we procure that from the other part of the market, we cannot guarantee the stability and quality. Second, in China coal and coal chemistry integration is a very important connection. We use a lot of derivative products from the coal production. We are very frontier in this aspect. Not only for protection of environment but also in the West and North area solve the problem of the water recycling, solve the problem of the water shortage in the West and North area. We reuse the water, recyclable water, to produce derivatives.

About the chemistry of the enterprise for the internal buying from our self-made coal and sales, comparative sales. what's the price gap?

Currently, our chemistry coal, according to the market price, it has got 2 parts, 2 different legal persons. That is all based on the market price. [Operator Instructions] If there's no questions from phone end, that's the end of this event. We will be answering the question from Internet mainly. All the investors, all the analysts, do you have any questions? If no questions, the phone Q&A comes to the end. Thanks a lot for your longtime support and caring. I hope you can support us and help us further. If any questions, you can call our security department and we are very willing to answer any questions you ask. Thank you. Now we can end the phone part and the Internet still running. Thank you so much for joining us by the phone, and thank you. I wish you all well. Thank you so much. Thank you for joining us.