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

Ladies and gentlemen, good afternoon. Welcome you to come to this China Coal press release. I'm Zoning. I'm very honored to be the host of today. So according to this China security [indiscernible] requirement and for all those Chinese sensex requirement of this improvement of the quality of that. So today, we are organizing this China Coal Shanghai Energy, [ Shaanxi ] Energy for the 2023 annual report, and we are jointly shared with you for the last year for our operational results and also looking forward to this future development. I also would like to thank all the analysts and investors for all the care and support for this China Coal and subsidiaries. We have China Coal, Executive President, Mr. [indiscernible] and [indiscernible] Independent Director of the Board of Officers and Vice President,[indiscernible]; chief Expert, General Manager of Petrochemical and Co-Industry [indiscernible]; and Director President of Shanghai Energy, Independent Director [indiscernible] of Shanghai Energy; the Chief Accountant [indiscernible]; and the President of [ Shaanxi ] Energy [indiscernible]; Independent Director, [indiscernible] for Shaanxi Energy; General Accountant of Shaanxi Energy [indiscernible] and the VP of Shaanxi Energy [indiscernible]; and Secretary of Board of Directors, [indiscernible] and all the people in charge of different departments today. We'll have 4 different items. The first one, we will introduce this strategic development of China Coal and the plan for 2024. And for all the different 3 companies, we will introduce the 2023 key work and all the different 2024 arrangements, and we will have the interactions with online and offline investors and analysts. First of all, we will invite Mr. Zhao, Rongzhe to share with us 2023 China Coal arrangement and 2024 plan.

Distinguished guests, ladies and gentlemen, good afternoon. Welcome you to 2023 collective performance press release of China Coal Holdings. I am Zhao, Rongzhe, member of the Standing Committee of China Coal Party Committee, Chief Accountant, Executive Director and President of China Coal, sincerely, thank you for your long-term customers and care for China Coal. So now I will briefly introduce the basic situation of China Coal and the subsidiaries for the strategic plan and the work arrangement. China Coal is a state-owned super large key enterprise supervised by the State-owned Assets Supervision and Administration Commission of the State Council. The only central enterprise in this whole coal industry and [indiscernible] important mission of ensuring national energy security. The main business includes the coal production, coal trade, coal chemical industry, power generation, coal mine construction, coal mine equipment, manufacturing and engineering and technical services. We have 3 public companies, Shanghai Energy and Shaanxi Energy. So we altogether have [ 0.1 million to 0.3 million ] staff with management asset amount of CNY 600 billion, and it was awarded as the A level business performance by state-owned enterprise Supervision and Administration Commission of State Council and ranked among the Fortune 500. So the basic is about coal production trade, coal chemical industry, coal mining equipment, manufacturing, et cetera. So in August 2006, with the approval of SASAC, China Coal exclusively initiated establishment of China Coal Energy and got listed in Hong Kong Stock Exchange in December 2006, and we came back Shanghai Stock Exchange in February 2008. At present China Coal holds 58.37% of the share of China Coal Energy. So China Coal Energy has been listed among the top 100 industries of the listed companies in China and has being rated as excellent A level by Shanghai Stock Exchange for consecutive 14 years. Shanghai Energy was listed in Shanghai Stock Exchange in August 2001 and now China Coal Energy holds 62.43% of the share. So after years of development, Shanghai Energy has formed a comprehensive recycling industry chain, integrating coal, electricity, railway energy services. So we currently have the coal production capacity of 11.49 million tonnes -- capacity of thermal power and new energy is 1.083 million kilowatt and the self-operated railway line is 186 kilometers, and the annual transportation capacity is also 13 million tonnes with a strong strength in the power field of power and water treatment and maintenance. We altogether have 15,000 employees with a total asset management of CNY 20.5 billion. So Shaanxi Energy is also listed on Shanghai Stock Exchange in December 2007. So in 2016, 30.31% of the share of Shaanxi Energy held by China Development Investment Corporation we transfer to China Coal. So Shaanxi Energy is mainly engaged in coal electricity energy and other businesses. The coal production capacity is 23.5 million tonnes with [indiscernible] capacity of a coal-fired power holding company is 798 kilowatts and installed capacity of share is 1.29 million kilowatts in 2022. He was elected this SASAC government demonstration enterprise -- so by the end of 2003, the total management is CNY 36 billion and 18,000 employees here. So energy is an important material basis for national economic and social development. So in report 20th NPC has said the energy evolution acceleration of construction of new energy system is very important as a stabilizer and ballast stone for the safe and stable supply of energy. So coal plays an essential role in holding an important role of the new energy development and the energy security. China Coal has similarly to the spirit of 20th NPC report and hope to achieve carbon peaking and carbon neutrality. So make overall plan for safeguard international energy security and promote the green and low-carbon transformation has improved that. So this is also like having the overall development. And then we also have the 2 joint ventures and to give full play to the coal electricity, chemicals [indiscernible] industrial chain, accelerate the construction of the 2 hedging mechanism had the downside risk of the coal market with coal electricity, joint venture and had the future carbon emission restraint mechanism with coal electricity joint venture and renewable energy. So China Coal has planned by 2025 with the capacity to be improved and then use the [indiscernible] supply and to focus on this high-quality development, to hope to have this green and a low-carbon transformation at this first-class energy company. So Shanghai Energy will also focus on this local coal industry to vigorously develop the new energy vehicle and to also have this Shanghai and Jiangsu and Xinjiang large-scale land resources to also have the presence in the new energy and comprehensive energy industrial services and strive to build a transformation and development of institution enterprise. So seems -- will vigorously develop like coal and coal-fired power industry and the construction of wind power, PV, pump storage and other projects to also hope to build the energy demonstration enterprise. I have to say that China Coal is a 2 joint venture development model and development orientation of a holding listed company can not only give full play to this role of coal-fired power to ensure this bottom line of national energy security, but also gain time for the comprehensive realization of a clean and green [indiscernible], which is conducive to the improvement of this energy efficiency, hoping to achieve the carbon [indiscernible] carbon neutrality goals to improve this economic benefits. It is also in line with this high-quality development and the status quo of the Chinese energy resources and is also in line with the overall deployment of new energy security and the special distribution of Chinese energy resources. So in the 3 years of implementation of 14th Five-Year Plan, China Coal has accelerated the optimization of its layout based on the resources and orientation of the consumption, promoted the blending of the 2 joint ventures and to achieve remarkable result in its transformation and development. So the new breakthrough has been made in the scale of coal-fired energy generation. We have already got this new development characteristics for small inner brand and bigger outer brand to promote the realization of the production carbon emission. So we also consciously improve this 3-year action plan of SASAC to improve the quality of listing of the company controlled by the central enterprise and also achieve the excellent results in the midterm supervision and evaluation of SASAC. And we also established this ESG system to also promote this continuous development to also have this low carbon development, to also improve this quality and this comprehensive investment, to have this multilevel and virtuous development, to also effectively carry on this information. And therefore, Shanghai Energy and China Coal, and they also have this all together comprehensive capacity to be comprehensive significantly. So this is marked this 14 -- 75 years of China's establishment. This is also core year for the realization of the objective of the task of the 14th Five-Year Plan. So the China Coal and its listed companies have adhered to the guidance of present ESG. And we also have already got this central ones, and this is also like catering to all those different ones and then to actively participate in this new development ones. And they also will focus on those key strategies -- and then this is also like -- improve all those high level ones and to also continuously improve this organizational structure to also have this value creation and to also have this new quality improvement. This is also like accelerating the development of that. So this is also having these 3 different listed companies and then to also have all those internal construction and then to also focus on that. And this is also like having the specific operation to also have the investors to know that. And then this is also like accelerating the effective feature and then to also have this high-quality development to also make a bigger contributions. I hope that you could support and care for this China Coal and for all those 3 different listed companies. We will also use all the different businesses and to pay you back. Thank you.

Thank you so much for Mr. Zhao. Now I'm going to share with you about China Coal Energy and 2024 and the work and the 2023 performance. And you can see, year 2023, and we are going to strengthen and to accelerate and to observe everything, and we are going to improve the energy and we are going to operate a new high. And you can see the output of commercial coal and it was [ 134.2 million tonnes ], an increase of 15.05 million tonnes of -- in 2023, the company continues implementing a major national strategic deployment, went all out to enter the coal energy supply and strengthen the production -- organization optimized production. They out accelerated [indiscernible]. And the company gives a full plate to the ventures channels to strengthen the coordination of production and marketing and goes all out to ensure the supply of electric coal strictly implemented the national coal price policy, take the lead in the mainstreaming market order, fully guarantee the full payment of coal contracts. And in 2023, the sales volume of commercial coal was 284.9 million tonnes, an increase of 21.99 million tonnes year-on-year, 84% increase among them. The self-produced commercial coal increased by 15 -- 13.57 million tonnes with an increase of 11.3%. Secondly, and the company's -- the coal chemical business continued to strengthen. The basic management of production significantly evaluate the operations of -- device, effectively -- plant shutdown, pay close attention to energy saving and consumption reduction and abnormal working and condition management realized under the stable and long-term operation of the device. In year 2023, the output of the chemical products was 6.036 million tonnes, a year-on-year increase of 369,000 tonnes, among which -- and the output of [indiscernible] is 1.487 million tonnes, and that of the year is [ 2.06 million tonnes ], increased by 232,000 tonnes. And the company actively go against the fluctuation of chemical products. And with flexible address of the marketing strategy and marketing layout, we improved the consumer service. In year 2023, the sales volume of coal chemical products was [ 6.126 million tonnes ], an increase of 9.7%, among which the sales volume of olefin was 1.479 million tonnes, and the urea was [ 2.141 million tonnes ] increased by 349,000 tonnes, meeting sales by [ 1.919 million tonnes ]. Thirdly, the company continue to optimize their production and organization, actively released advanced production capacity, further promoted reduction of expenditure, improve the quality and efficiency. In year 2023, the unit sales of self-produced commercial coal was CNY 307.1 a tonne, a year-on-year decrease of CNY 15.83 a tonne, down 4.9%, among which and cost materials decreased by CNY 10.04 a tonne and 15.4%. And you can see that transportation expense and product charges decreased by [ CNY 4.45 a tonne ], down by 6.7%, mainly due to the change of -- the change of the sales structure, the proportion of sales [indiscernible] expenses has decreased and other costs decreased by [ CNY 7.13 a tonne ], down 18.9%, mainly in accordance with the management measure of the use of security fees. Of the cost of outsourcing mining, engineering increased by CNY 5.63 tonne, up by 16.9%, mainly according to the regiment of the product organization and the change of geological conditions, the engineering quantity of the outsourced device has increased. In year 2023, the unit sales of the polyolefin was [ CNY 6,375 tonne ] a year-on-year decrease of 7.4% and urea sales reached CNY 1,619 tonne, a year-over-year decrease of 14%. The urea sales of the -- was CNY 1,889 tonne, a year-on-year decrease of CNY 155 per tonne and down 7.6%. In year 2023, the average selling price and the company's self-produced commercial coal was CNY 602 tonne, a year-over-year decrease -- and among which, and the thermal coal and is CNY 532 tonne. And you can see that the coking coal, the average price was CNY 1,386 per tonne, and you can see and -- it dropped about 20.8%. The sale price of authorized trading coke was CNY 644 tonne, down [ CNY 186 tonne ] -- CNY 60 tonne to CNY 80 tonne year-on-year, down 20.7%. The sales part of the polyolefin was [ CNY 6,907 per tonne ], a year-on-year decrease of CNY 494 per tonne and down by 6.7%. And the sales price of urea was CNY 2,423 per tonne, a year-on-year decrease of CNY 189. The sales price of the [indiscernible] dropped by 11.1%. And you can see and we have achieved [indiscernible] high of the operational performance. In the case of a sharp drop in the coal prices and a significant year-on-year decline, and in the benefits of the coal industry, the company deepened the management, vigorously promoted the production and efficiency improvement of the whole industry chain and strive to maintain a steady growth trend in benefits since 14th Five-Year Plan. Equipment enterprise actively sees market orders of -- production significantly and efficiently and maintain good momentum production operation through transformation upgrading given [indiscernible] innovation. The total output value of coal mine equipment in the whole year was CNY 11.43 million, an year-on-year is 14.8%. The sales scale of financial business has reached a new high and in concentration of the funds and management efficiency are leading the industry. In year 2023, the company realized an operating income of CNY 192.969 billion, the total realized profit is CNY 33.049 billion, up 0.5% year-on-year with a 3-year compound growth rate of 12.6%. The net profit attributable to shareholders of the parent company was CNY 19.534 billion, a year-over-year increase of 7% with a compound growth rate of 19.2% in 3 years. Basic earnings per share was CNY 1.47 per share, up 6.5% year-on-year. The company's comprehensive gross profit margin is 25.1% and which is same and with that in 2023. The net cash inflow from operating activity was CNY 43 billion. The year-on-year change of the total profit in 2023 are as follows. The main profit increasing factors as follows: first, the asset impairment reserve decreased and profit increased by 85.16%. Second, sales volume, self-produced commercial coal increase and profits increased. Number three, the unit price of the sales produced commercial coal decrease and the profit increased by CNY 2.221 billion. Four, the financial expenses, decreased and profit increased by CNY 333 million. Fifth, coal chemical enterprises increased profits by CNY 403 million. Six, the power generation and heat business increased profits by CNY 254 million. Seven, the nonprofit expenditure is reduced. Number eight, less profit increased by CNY 217 million. Eight, the coal mine equipment business increased profit by 173 -- [ CNY 137 million ]. Nine is tax. And by the end of 2023, the company's total assets were CNY 349.638 billion, a year-on-year increase of 2.7%. Returned shareholders' equity belonging to the parent company was CNY 144.12 billion, a year-on-year increase of 10.1%. The asset liability ratio at the end of the year was 47.78% -- 47.7%, down 3.8 percentage points from beginning of the year. The ratio of assets to liabilities at the end of the year was 28.5%, which was 5.8 percentage points lower than that is at the beginning of the year. In 2023, the company's capital expenditure plans closely focused on coal, coal chemical industry, coal-fired power, new energy and the coal mining equipment, including capital construction projects, equity investment, technological transformation. In year 2023, the cap expenditure plan totaled CNY 18.02 billion with a total of CNY 15.757 billion, accounting for 87.44% of the annual plan. Among them, the [indiscernible] project was good and past completion acceptance smoothly. And [indiscernible] under the [indiscernible] coal mine have approved to increase the production capacity by 10 million tonnes per year. The construction of [indiscernible] coal mine -- progressed steadily. And the -- you can see, and [indiscernible] 660 megawatt coal electricity integration project was approved and investment decision was completed. The 263 MW and PV project in the first phase of Shanghai Energy and the new energy demonstration base and will be connected to the grid for the power generation. In 2024, the company plan to spend CNY 16.09 billion, an increase of 1.6% compared with actual commission in 2023. Among them, the planned capital construction project is CNY 8.726 billion. The planned equity investment is CNY 245 million. And the planned investment of technological transformation [indiscernible] CNY 7.038 billion. Divided by business sectors, the coal sector plan to arrange CNY 7.556 billion and the coal chemistry industry board -- and in-depth efforts were made to deepen and upgrade the reform of state-owned enterprises and various and face tests were completed through high standards. Six enterprises were newly selected to double 100 actions and scientific reform admissions and actions of the State-owned Assets Supervision and Administration Commission, complete reform of the headquarters company and its affiliated enterprises, attach great importance to science and the technology innovation regarding innovation as the first driving force to lead the development. [indiscernible] of ecological civilization and [indiscernible] for few ecological environmental protection responsibilities of the central enterprises. In 2023, the investment in environmental protection was CNY 3.03 billion, an increase of CNY 1.15 billion, up 61%. No sudden environment incidents occurred throughout the year. Nine, since the company went public, the profit distribution policy has remained stable. During 2021 to 2023, the accumulated cash dividend was CNY 15.317 billion since listing, the total cash dividend of the company has exceeded CNY 30 billion, giving maximum consideration to the overall interest of all shareholders and a systemic development of the company. By the end December 31, 2023, the net profit attributable to shareholders of listed companies in the audited consolidated financial of companies in 2023 is as follows -- and is follows: and you can see the Board of Directors of the company suggested that the 30% of the net profit of [ CNY 19.534 billion ] attributable to shareholders of listed companies should be included in the consolidated financial statements in 2023 in accordance with Chinese Accounting Standards for Business Enterprises. And in 2024, the company adhered to general tone of steady progress, continue to promote the stock efficiency improvement and incremental transformation focused on improving the ability of scientific and high-quality development of the enterprises. The annual production and sales volume of self-produced commercial coal is planned to be 129 million tonnes. And above all, the production and sales volume of polyolefin products is 1.45 million tonnes, and production and sales volume of [ urea ] more than 1.85 million tonnes. We are willing to carry out special actions to improve quality, increase efficiency and stabilize growth, focus on the [indiscernible]. First, [indiscernible]-- planning and building a world-class energy enterprise in the 14th Five-Year Plan, continue to optimize the industrial layout to promote development and construction of the 2 joint ventures demonstration projects with high quality. The [indiscernible] is to carry out in-depth reforms around the strengthening core functions and improve core competitiveness. Number three, we adhere to the world-class batch marking, continue to deepen the management, accelerate transformation with digital intelligence. Number four, and we are going to further improve the scientific and technological innovation system, strengthening construction of -- ability and gather the [indiscernible] scientific research for a joint force of innovation. And the fifth is to coordinate deferment of safety, do a good job in safety and environmental protection from strict to data, improve it. [indiscernible] compliance management long-term mechanism, if we prevent and resolve all kinds of major tax and effectively improve control risks in key areas [indiscernible] to further promote special actions to improve the quality of listed companies controlled by said enterprises and continuously raise, improve corporate governance and information disclosure qualities, drive communication with investors. And for dear investors, analysts, company management and all colleagues will be in line with the initial mission, make persistent efforts for [indiscernible] participating in China style energy produce and build new achievements of the world-class enterprise were high-quality development. Thank you so much for listening. So now please give a warm applause to Mr. [indiscernible] and Mr. [indiscernible] to introduce the business performance of Shanghai Energy and the 2024 work arrangement.

Distinguish the guests and all the investors and analysts and media friends, good afternoon, everybody. In the spring and in this beautiful March, and the spring is breezing and weather is warm in this beautiful season, and full of vitality and hope as the Chairman of Shanghai [indiscernible] Energy, I'm very honored and I'm very happy to meet you through his performance briefing. And first of all, on behalf of Shanghai Energy, I would like to extend to a warm welcome to our investors, analysts and media friends tuning to this meeting. I would like to extend my heartfelt and sincere greetings to friends from all walks of life. Now I would like to briefly introduce Shanghai Energy's business performance in 2023 and key work completion, the future equipment plan and key work management in 2024 to all shareholders, investors, analysts and media friends. Firstly, -- Shanghai Energy's operating good performance and key work completion in 2023. So year 2023 is a crucial year for Shanghai Energy to anchor new deployment goals and implement new deployment strategies. And it is also a crucial year for Shanghai Energy to promote reform and transformation with unprecedented efforts. Over the past few years, Shanghai Energy is always adhered to the guidance of President Xi Jinping thought on socialism with Chinese [indiscernible] a new era, actively implement the development and the requirement of stock efficiency improvement and incremental transformation, accelerated the implementation of the 12345 transformation with care, the guidance and help and support of China Coal and investors. The Board of Directors of the company, together with management and all employees [indiscernible] to overcome the -- work hard, and we deliver a very good report to all the shareholders. So firstly, the company's profits remain stable. The company overcame the complex geological conditions of the coal mines and the downward trend of the main products market. In 2023, the output of the raw coal was 8.0255 million tonnes, and other commercial coal was [ 26.4609 ] million tonnes. The output of [indiscernible] coal was 416,000 tonnes, and the power generation is [ 3.703 billion kWh ]. The aluminum processing output is 97,800 tonnes, and the equipment repair capacity is 19,300 tonnes. And the cost of the raw coal, the power generation, the power supply and the washing and all the processing, all decreased with the same caliber. The company's operating income of CNY 10.9 billion, net profit attributable to shareholders -- the companies of CNY 969 million. Secondly, the breakthroughs have been made in transformation, development. Adhering to a long-term perspective, and sizing of the situation, the company has studied and formulated medium- and long-term development plan, increased the acquisition of external coal and new energy resources, accelerated construction of the coal mines and new energy projects with the strength of the whole company and actively cultivating new profit growth points. In 2023, the investment was CNY 1.53 billion, 96% of the annual plan was completed. [ Xinyang ] coal mine project has basically completed up and will enter the third phase of project in 2024. And the integrated demonstration project of [indiscernible] headquarters and was headed in the -- was included in the list of the third batch of large-scale wind power PV basis in China and was included in a medium and long-term development plan of [ Hugo's ] new energy system. Thirdly, the reform has achieved landmark results, adhered to the high of -- development push forward the reform with unprecedented determination and strength and constantly stimulate the company's department of vitality. The reform of human resources optimization has achieved remarkable results through measures such as replacing labor services, dissolving labor contracts and through consultation, encouraging to move to the frontline. The cost reduced that improved efficiency has been achieved. And you can see that the high-quality completion of the [indiscernible] institution reform, a total work 112 institutions was streamlined and 1,046 [indiscernible] were reduced with the pressure drop ratio of 36% and 28%. A differentiated [indiscernible] mechanism around the need to value creation has been formed. The assessment and mechanism of minor ranging operation has been improved, and all of them have implemented smart unit accounting and the ability of self-finance and self-survival and the self-hegemonism of the mines. Number four, the overall security situation remain stable. Company always insists of safety as an important guarantee for production operation development. It embodies an ideological consensus. It is simply is absolute first, as first and forms some effective mechanism of keeping eye down to grasp safety. And you can see that we invested CNY 130 million throughout the year to initially realize the integration of visualization mechanism, standardization, the companies of [indiscernible] production remains stable with 11th and 6th anniversary of [indiscernible] production in [indiscernible] coal mine. Fifth and last, scientific and environmental protection work has been -- continuously improved the company's system of scientific and knowledgeable innovation as the first driving force to lead development with an annual -- investment CNY 470 million and the R&D investment intensity of 3.8%. The -- platform of 2 institutes, [indiscernible] National Enterprise Technology Center has the passed the annual assessment of National Development and Reform Commission. We actively fulfill our responsibility of eco-environment friendly, invested CNY 37.82 million and implemented 8 eco-environmental control projects. Sixth, actively creating maximum value returns to the shareholders. Since its listing, the company has realized a cash dividend for 19 years with a dividend count reaching CNY 3.324 billion, which is 3.79x of the risk capital of CNY 877 million from 2017 to 2022. The company's annual cash dividend accounted for more than 30% of the net profit attributable to ordinary shareholders of listed companies in the consolidated statements. In 2023, we continue to promote revenue, good profit growth and sustainable -- the company decided to distribute a cash dividend of CNY 296 million to all shareholders. The company pays great attention to market management, actively strengthen communication with investors. The market attention and trading activity with Shanghai Energy stock have been improved and enhanced in the future. The company will grasp the relationship between short term, medium term and long term and create greater value for shareholders on the basis of accumulating energy for the long-term steady growth of the company. Seven, Shanghai Energy future developmental plan. Facing a new strategy of national energy and security and the -- double carbon, Shanghai Energy adheres to the guidance of President Xi Jinping thought of socialism and trying to protest for a new era comprehensively studied and implemented Mr. Xi's thought. And we put forward the [ 12345 Deferment Strategy ] according to the 14th Five-Year Plan. And we put on the high-quality development of the company, create a new high energy source, and that recreating a new Shanghai Energy target, speed of industrial upgrading and base deployment, strive for regional development opportunities and create a new Shanghai Energy that is safe, efficient, multifunctional, green and low-carbon leading the science and technology, modern governance and long lasting foundation. Focused on 2 joint ventures, that is focused on 2 joint ventures of a coal-plus, coal-fired power, and coal-fired power plus new energy, extends the industrial chain of the coal and electricity to achieve strong chain replenishment, highlighting new advantages of energy inhibition and focus on the development of coal electricity, new energy and comprehensive energy services. Adhere to 3 orientation, that is adhere to orientation [indiscernible] international development strategy, integrating with local development planning and combining with the development strategy for China coal and development reality of that one, adhere to [indiscernible] modernization that is according to the 4 principles of scale: regionalization, integration and benefit core new energy resources are pertained. Number five, quality implementation of 5 strategies, including safety and stability, efficiency improvement, incremental transformation, reform and innovation and party building guidance to lay the foundation for the company's high-quality development. Strive to achieve the goal of [ 45 ] by the end of the [ 10th ] Five-Year Plan. The coal production capacity will be stabilized at around 40 million tonnes and the total assets of the 2 major industries will basically reach the peak. The key work regiment of Shanghai Energy in 2024. 2024 is a crucial year to achieve the objectives of 14th Five-Year Plan. It is also a year of upgrading Shanghai Energy's reform and transformation. On the guidance Xi Jinping's thought on socialism with Chinese characteristics in a new era, we will thoroughly implement work regiment of the second economic conference, the National People's Conference and the China Coal. In accordance with the company's [indiscernible] with the spirit of I don't have to and responsibility of I have succeeded. We will go all out to do a great job in safety production, management reform and transformation and we and -- well -- and strive for better results, mainly do a good job in the following aspects: the first is to overcome difficulties and organize production in a scientific and orderly manner, ensure the annual output of rock coal is 8.89 million tonnes, that of commercial coal of [ 6.25 million tonnes ], that of power generation is 3.6 million kWh, that of aluminum processing is 100,000 tonnes, that of railway freight is 12.3 million tonnes, that of equipment maintenance is 16,500 tonnes. And second, the fine management and improvement of management quality, and we ensure the annual operating income is CNY 11.294 billion, profit is CNY 1.235 billion. The third is to set up special classes and fully promote the implementation of [ 12345 Government ] strategy. In terms of the good resources, strive to obtain 1 or 2 high quality coal projects in terms of new energy resources. The basic goal is to obtain 200,000 gigawatts projects, and we are going to accelerate the current projects. And we are going to focus on ways to mine in Xinjiang and [indiscernible] projects, the power grid reconstruction in that one mining area and other projects. So we are going to secure the [indiscernible] investment throughout the whole year and to be CNY 1.78 billion, ensure that more than 70% of the objectives and taxes for new runoff reform of SASAC are completed. So we are going to strive to achieve more efficient industries and leaner institutions and leaner manpower and get the main business around scientific conventional innovation, and we needed to accelerate the speed of the scientific innovation. And we are going to ensure investment ratio in science technology, which is about 3.8%. And we are going to focus on the key points and actively got against the safety, stability and environmental risks, firmly adhere to the goal of zero-debt, of zero group visit and zero -- exceeding the standard to ensure that no major safety accidents and major [indiscernible] visits. Seven, and strengthen confidence and strive to improve the quality of the listed companies, fully implemented retirement of fast track and China Coal and we are going to create maximum value and for the shareholders continuously. So dear guests, ladies and gentlemen, the development of Shanghai Energy cannot be separate from your support. In the future, we need your valuable suggestions of Shanghai Energy's reform development. We will take this performance briefing as an opportunity and listen to your opinions and suggestions, and learn from the China Coal Energy and Shaanxi Energy, make 4 years of strength and further weakness and press ourselves and make great efforts to push the Shanghai Energy, safety production and strive to create a greater return to the investors, shareholders and the society. Thank you.

Thank you, Mr. [ Mao ]. Now please invite Mr. [indiscernible] to introduce the business performance of Shaanxi Energy 2023.

Distinguished guests, ladies and gentlemen, good afternoon. So first of all, I'm very happy to be here and to present you and on behalf of Shaanxi Energy. On behalf of the company, I would like to extend my heartfelt thanks to friends from all walks of life. 2023, Shaanxi Company adhere to the general terms driving for progress and while maintaining stability, fully implemented the development idea of improving efficiency by stock, incremental transformation and 2 joint ventures. And [indiscernible] on efforts for Shaanxi people, the company's safety situation was stable and improved, many production operation indicators reached the best level in history. Over the past year, Shaanxi Company has made great achievements in promoting enterprise commodity, coal production, sales volume profits, total assets, operating income, labor productivity. And asset liability ratio reached the better level in history and operating performance achieved the growth. For the past year, Shaanxi has deepened reform and innovation to improve efficiency. Four scientific and technological treatments have been identified as intentional leading and advanced level and [ 114 ] industry and professional science and technology work, the company was shortlisted in the list of [indiscernible] State-owned Assets Supervision and Administration Committee. and was identified as the first batch of digital transformation pilot enterprises. And for the past year, Shaanxi has optimized its layout and made all our transformation with a global vision and strategic thinking. We will consciously integrate and serve the major strategies such as integrated [indiscernible] river delta of all arrangements for the headquarters economic zone and core functional zone and industrial [indiscernible] zone. And we are going to accelerate in the construction of development pattern of 3 industries synergies: coal, coal-fired power and new energy. In year 2023, the company achieved an operating income of CNY 12.845 billion, an increase of 7.01% over the same period of last year. The total profit was CNY 3.438 billion, an increase of CNY 200 million, of 6.17% of the same period of last year. The net profit attributable to the owners of the parent company was CNY 2.109 billion, an increase of CNY 33 million or [ 1.77% ] over the same period of last year. And in '23, the owner's equity attributable to the parent company was CNY 13.519 billion, an increase of 17.59% of the end of last year. At the end of the year, the asset liability ratio was 59.15%, down 3.98%. The net cash flow generated in operating activities in the whole year was CNY 3.796 billion, an increase of CNY 789 million or [ 26.25% ] of the same period of last year. The annual earnings per share was CNY 0.14, an increase of 1.5%. Secondly, completion production and operational indicators of the coal sector. In 2023, the company closely focused on the annual output target of [indiscernible] such as [indiscernible] and geological structure, adhered to all service production, continuously strengthen the production, schedule reorganization and production plan management, scientifically optimize mine production layout, fully released a high-quality production capacity and ensure the company's high and stable production. In 2023, the company produced more than 14 million -- not -- more than 19 million tonnes of commercial coal, an increase of 5.16% compared with the same period of last year. In 2023, the company resolutely implemented the decision-making arrangement of the CPC Central Committee and a Senior Council and we made every effort to do a good job in energy supply, effectively play the role of the central enterprises [indiscernible] energy supply. 2023, the sales volume of the company's commercial coal and -- was CNY 90 million -- more than CNY 90 million and -- [ 908,068 million tonnes ], an increase of 8.7% of the last -- same period of last year. So you can clearly see that we basically show the responsibility of the central enterprises. In 2023, the comprehensive tax-free price of commercial coal was CNY 551.38 per tonne, up CNY 1.3 million per tonne, the completion of coal-cost indicators. In 2023, the company adheres to the concept that all costs can be controlled and does a good job of increasing revenue and reducing expenditure, reducing costs and increasing efficiency, strengthen the whole process of cost control, implement responsibility of cost control and strictly -- and assess the targeted cost [indiscernible] mechanism, strengthen system cost reduction, technology cost reduction and expenditure reduction and achieve good results in the cost control of the commercial coal throughout the year. The completion of production operating indicators of the power sector in 2023. The company continued to strengthen management of equipment operation, maintenance and defect elimination to realize the safe and reliable operation of the unit, actively analyze the situation, study countermeasures, strive for the understanding and support of the provincial energy bureau and provincial electric power dispatching center and adopt a deep peak safety method. In 2023 [indiscernible] plant, generated 10.39 million kWh, a decrease of 2.67% over the same period last year. The electric consumption and -- reduced by 27.8% compared to the same period of last year. The average electricity price, excluding tax is [ CNY 0.04098 ] per kwh. Total profit for the whole year was CNY 877 million, an increase of 9.06% of the same period of last year. The main [indiscernible] 2024, and you can see -- and we will celebrate the 75th anniversary and -- over the [indiscernible] of the People's Republic of China and [ 35th ] anniversary of development and construction of Xi Jinping's mining -- Xi Jinping's guidance. And we will undoubtedly implement the spirit of the 20th National Congress of China and Center Economic Work Conference, adhere to the general [indiscernible] strategic support and make overall plans, recommend and layout. The first thing to [indiscernible] headquarters economic zone, make 4 years and of the industrial base of industrial cities and superior resources of the capital cities and fully integrated into the construction of the [indiscernible] metropolitan area. And we are going to build a strong core functional area focusing on doing a good job, coordinating the main mine and power plant projects in [indiscernible] and other regions, undertaking 2 joint factures plus have actively doing a good job in the construction and reserve of [indiscernible] power plant and new energy projects. So we are going to vigorously develop new energy resources. And we are going to boost the economic development of the interprofessional [indiscernible] area with the strategy security, build a coal-fired product, new energy projects in [indiscernible] and strengthen the role of the state-owned enterprises in accelerating the high-quality development of the old [indiscernible] areas. And in 2024, it is an important year for Shaanxi Group to realize transformation development. The company will actively promote the implementation for new energy projects, speed up the process of thermal power project, study and lay out strategic emerging industries and make every effort to build an energy demonstration enterprise in Eastern China that is multifunctional, green, low-carbon, intelligent and efficient and modern governance to drive and to create the new situation and -- of the 3 industrial [indiscernible] development of coal. And all employee of Shaanxi and -- will keep in mind their initial mission, may pursue efforts and forge ahead and constantly improve the quality of the company development, make positive contributions to the health development of the capital market and give back to all the shareholder, investors with excellent performance. We look forward to share the achievements of the company's high-quality development with all investors. Thank you.

So thank you so much for Mr. [indiscernible] introduction. Now let's go to the Q&A session. And this Q&A session will be divided into online and offline. So we will respond to the -- set questions first.

[indiscernible] security. So first of all, I would like to congratulate and on the 3 listed companies of China Coal and congratulate on your performance and rewards and including shareholders. And like analysts and investors, and we can clearly feel that China Coal and its listed companies implementing the City Council's guidance and the requirements and from the security and I clearly see your efforts, and I see the results. And in here, I'd like to take this opportunity to ask 3 questions. So the first question is that I wanted to ask Mr. Zhao from China Coal. And how does the company to see the future development of the coal and energy? And I wanted to see the future trend of the coal and energy industry. And secondly, in last few years, we clearly see the transformation of Shaanxi Energy under the 2 joint ventures. And I wanted to ask, and in terms of promoting the 2 joint ventures, and what about the opportunity? And the third question and go to Shanghai Energy and Shanghai Energy is aiming to build up a transformation-based company, especially transformation for the new energy industry. So what are the new projects and the highlights of the future development? So these are 3 questions, 2, 3 companies.

So we are going to ask Mr. Zhao first.

Okay. So in terms of development and the trend and from the big picture, and I would say -- and China's economic development has a very good resilience and very stable. Of course, these are the basics. And from the industry's perspective, and you can clearly see that, energy, and is very important support for economic development and coal plays a very, very crucial and bottom-up role in the energy industry. So go to the futures of China's energy. So on the long run, and you can see coal and energy are still the most basic energy. So this first thing. And secondly, so of course, we have the 2 ventures and plus to actively promote and fire -- electricity and new energy. So -- and having this new projects, we can better optimize the energy structure. So number three, the advancement of the technology. And for coal, and we focus on the clean development and [indiscernible] and clean usage of the coal. And you can see the intelligence of the coal and is improved and there is a high frequency for clean usage of the coal. So that is why I believe with the economic development of China, so coal will contribute more and clean coal will contribute more.

Thank you. Thank you so much for Mr. Zhao. So the next question go to Shaanxi Energy. So the 2 joint projects of Shaanxi, the first coal is coal plus coal electricity. Of course -- and firstly, we needed to ensure the stability of coal industry. So the coal output capacity is more than 20 million tonnes. So now we actively look for the resources from other places and to assure under the long-term growth and we are aiming to achieve this output. So the second joint project is a coal plus electricity. So in the past, and you can see and power and electricity only accounted a small portion. And for now, and we are planning to build 4 electricity plants. So after 2 years, probably maybe up to the first half of 2026 and then you can clearly see that. So it will achieve more than 880 million kWh. So which means -- so the coal produced by Shaanxi can be consumed by Shaanxi so that is why, and we can achieve the coal electricity and the joint operation. So in that case, and the company's capacity can be enhanced, can be improved. And secondly, we can control the risks. And -- because in that case, the cost is lower and the profits of electricity is higher, and it will also bring more efficiency to the enterprise. And another joint project, yes -- the coal plus new energy, coal electricity plus energy. So we started to do this now and we are making these key projects. And we are making to -- including into the 14th Five-Year Plan, and we are aiming to achieve more than 1 million [indiscernible] and wind power plus PV. So this also kind of offset of the risks. So in general, the 4 strategies of Shaanxi: power, coal, new energy, electricity. So we have the coordination development of the 3, energy. So 3 categories for energy. Thank you. So the third question is about transformation and development of Shanghai Energy. Thank you so much for your long-term support to Shanghai Energy. So Shanghai Energy has more than 50 years experience in coals and now we have 3 things to share: so the one is to strengthen the power of the coal, and we needed to have the lean management of electricity, and we needed to develop the new energy. So recently, and we stabilize and the output capacity of coal and in the headquarter, and we will keep this 7 million tonne capacity. So we have more than 1 billion tonne storage. So for the headquarter, the output is 7 million to 8 million tonnes, and we are going to accelerate the -- deploying of the two coal mines in Xinjiang. So we've already invested the first project in Xinjiang. And we are going to accelerate the construction of another project in Xinjiang. So by the end of 2025, and we are aiming to start the operation. And today, we can improve the output of the coal. And in terms of headquarters, so we are going to accelerate the development of new energy, and we are going to develop the PV and the phase 1 project. And we have completed first -- we have first -- completed first phase and in the future. So in Jiangsu Province, so we needed to -- we will build a temporary pilot, and we are going to build and the -- and mega -- megawatt level and new energy project. So we needed to have [indiscernible] in energy storage. And we are aiming and to build the first 2-in-1 pilot zone of the 2 grid and in Jiangsu Province, and we are going to make the comprehensive coal energy -- comprehensive energy pilot zone and in Xinjiang we are going to expand the output on the basis of the 2 coal mines and with a guidance of the national strategy. So we are going to accelerate the output of these coal mines in Xinjiang. So we are going to use multiple ways and to improve the scales and of the power generation in Xinjiang, at the same time, and we're going to capture and get to the high quality of coal resources and new energy resources throughout the whole world. So we are aiming and to -- and build the new energy equipment capacities more than 55 million gigawatt.

Okay. So I have 2 questions. So the first question. So you can see, I wanted to ask about the capital related plans in the following 3 years. And secondly, compared with the other companies -- and compared with the competitors in the company and in the future, do you have any new...

Sorry. Sorry, can you repeat your question? Which company, sorry? Okay. So you're asking China Coal Energy. So China Coal Energy and China Coal Energy cash dividend, right? Okay. I'm going to ask your first question. So in terms of the capital plans and for China Coal Energy and basically and -- so it is about CNY 16 billion to CNY 18 billion. So this is not a very high level of course. So in year 2024, the capital expenditure in 2024 are normally and used for key projects like in the aluminum K and the coals for Shanghai Energy and the -- under the coal chemical. So that is why. And in recent years and for the new projects and the chemical coal and in general, so we are going to keep the stable -- keep it stable. And in terms of the China Coal Energy, the profits and the arrangement, and we are going to ask my colleague to share.

Yes. So we really care about this question. So in terms of the dividend. So in recent years -- okay, so back to 2017. And -- so we are going to have this -- we always have the 30%. And gradually, so for the high-quality [ development, ] so you can clearly see that we have the feedbacks and to -- so the -- to the shareholders and you can see -- and for the each share, and each share is RMB 0.4. And you can see -- and for the -- and parenting and profits, so you can see higher and higher. So what does that mean? So from the management level, so we also -- and ask our partners, including the external companies. So the -- we needed to assure the high-quality development. So this is the best reward to the shareholders. So this is the foundation. Secondly, we need to have more stable and reasonable proportion. So we needed to take care and of development and stability and reform. So sometimes -- and people really care about the result of high-quality development. So we also and fully consider our promise and to the capital market, so in year 2026. And -- so we are going to arrange the profits from 20% to 30%. So we always insist on the cash dividend. We don't do other discount-related dividend. And you can clearly see that for Shanghai Exchange and encouraged and those -- and well performed companies and to -- and have this percentage of 30%. So whatever difficulties, we encounter, and we always insist on that. So we insist on the high-quality development. So that is why high-quality development and when you see -- and you can see the capital -- and on the report. So there's a financial commitment for China Coal. Actually, for our group. So we needed to firmly take advantage and of the capital market and super efficient, and we are going to assure the safety of the loan. So that is why we put the financial company under China Coal, so which means China Coal that's not only provides the internal resources and for this CNY 90 billion, so CNY 30 billion of them and are for loan. So those capitals and we needed to consider about the needs of the development. And if we remove this CNY 30 billion and we have CNY 60 billion left and we have special funds for safety and for environment. So if we add all this up, so in general, so there are over CNY 10 billion. And if we deduct this and CNY 10 billion and then we have CNY 50 billion. And you can see and the total number is more than CNY 70 billion. So including the base capital and the interest and the total sales is about CNY 200 billion. So in general, we think -- so you can clearly see that -- so for the capital ratio, you only needed to NAV capitals, and then we will arrange that well. So that is why, and we needed to have some other alternative ways. So of course, those alternative ways will not be considered by us. So we -- and we -- so that is why, and we need to be sure of this. And we will [indiscernible] all these out and then we and -- well and have the high quality and rewarded to the shareholders. So -- because we need to clearly sort out and -- everything and we needed to clearly sort out the accounts. So you can see and we have these 2 major contributors to the profits of China Coal. And we can clearly see that -- so we basically get the recognition of the other capitals. So that is why. And you can see -- and the capital operation is very good. So it doesn't require the listed companies still using some alternative way. And for example, we take care of the large investors and large shareholders or something. So actually -- and we can take full advantage of our own capitals and then we can enjoy the high-quality development. So that is my response.

My name is [indiscernible]. And very happy honored. And to come to and this collective performance reveal and it's a great honor for me and to have this face-to-face talk to all the leaders. And there are two questions. And to Mr. Zhao. The first question is that actually, and under China Coal and there are and very good coal resources. And for coal, and we mentioned the China Coal, right, so in terms of coal. So how part of the electricity assets, the power assets. So any other plans for the listed companies? And secondly, and in terms of the coal supply chain. So there are some new supply side and for the coal. So compared with 2023, what are differences? These are the 2 questions.

So the first question goes to Mr. Zhao.

Okay. I'm going to answer the first question. And on China Coal and compared with the other state-owned companies are working with the other state-owned companies and central companies. And we did a lot of the [ rocket ] projects. And maybe some projects already started. Okay. Of course, we needed to improve the storage. At the same time, and for these projects, so basically, we're owned and by -- under the other state-owned companies and central companies and because at the corporate level and we promoted these projects. So these are good for the 2 state-owned companies to coordinate. So there are some procedures actually, are very complicated to proceed. So that's why. And by doing this, it is better for us to implement the projects and for this new energy projects and [ rocket ] projects. So in the future, so how do we achieve or how do we achieve the security-based target. Of course, and we will have some further research. But for now, we don't have this arrangement for now. So if we have further arrangement, so of course, we will report to public timely. So in terms of another question related to the market. So like the price-related issues or something, we are going to invite Mr. [ Jiayu ], the VP and to share with you more details.

So I'm going to answer the second question. Actually I think -- and we can -- and share -- and from 2 different perspectives. So the first perspective we said by now. And the coal and supply system and it's improved and the supply assurance is also strengthened. And you can clearly see and that the long term and medium term of the coal and especially the power coal and electricity coal, and you can see the superefficient requirement is higher and higher and the transporting insurance and capability is improved. And you can clearly see that last year, and we reached the historical high and so that is why we have very, very clear supply. So you can see the market is basically, okay. So you can see the market pattern of 2024. So the market pattern -- and it's basically balanced and transferred to lose pattern. The overall supply and of the coal is basically very stable. And so the demands of coal, according to our forecast, so the demands and are growing steadily. And you can see -- so the market scale in general, so we need to consider about the periodical and seasonal based. So there will be a new balancing point. Of course, so people consider in recent years. The coal price is higher, but this higher is more likely reasonably high. So we think the fluctuation actually is narrow and narrow. So in year 2024, and I think in 2024 you can see the market has fluctuated. And secondly, and you can clearly have low quality coal price on the short term. So there's some changes and for the downward of the price, but you can see and this is the value season and of consumption. And you can see the coal demand -- the strong coal demand in Northern China, basically ended. So in a shorter term, so things are getting better in terms of the price. So on the long term, by now, the current coal price is still at a historical high. And in year 2015, you can clearly see -- and you can see the price is [ 370 ]. So although the price is decreasing but the price is still and over [ 850 ] -- around [ 850 ]. So at the beginning of the year, the price was [ 950 ]. So that is why in terms of the price to the market, so it is high compared with the past. So the price is still as you see still very high in terms of the coal price. And you can see, we face the stress to the downward. You can see electricity coal mechanism, so it's very stable. So it is also very good to the market, friendly to the market. So the price fluctuation, okay. So I'm not sure whether I -- my answers satisfy you.

So thank you so much for sharing with us about the results of the performance. I have several questions. The first question goes to you on the China Coal. In terms of the 2024, the producing and consumption plan of the coal? The same question goes to Shanghai Energy and the investment and of the new mines and the basic info of the producing capacity. And the third question go to Shaanxi group, and you can see the equipment of the coal and electricity and for the equipment capacity plan. So these are 3 questions, 2, 3 companies.

So the first question concerning the producing and output of next year. Okay. So producing and consumption is very simple. So we were strictly follow the approved and verified capacity -- output capacity. So fully output and fully consumed. Yes, we've already review the arrangement of the capacity coal is more than [ CNY 120 million ]. And in terms of Weizigou project, so we are going to ask Mr. [ Mao ] from Shanghai Energy.

So Weizigou Coal and [ SASAC] project and from Shanghai Energy, and it is very huge. So now we accelerate the construction of Weizigou Coal. And we basically completed phase 1 project. And by the end of 2024, and we will complete the phase 2 of the project, and we will enter and phase 3. And by the end of 2025, I think we will start producing. So this is our plan for now. And in terms of Weizigou and coal, and in terms of the coal quality, so it is very competitive in Xinjiang because you can see -- so it is over 5,000 and it is low dust and the thermal capacity. So you can clearly see that it is very high quality. So with Weizigou Coal for now and the output is 2.4 million tonne. However, and you can say the geologic condition is very good. And it is good enough for beauty, a bigger coal. So according to the output capacity and according to Xinjiang standard, national standard, so we will accelerate the speed of producing. Okay. So Mr. Qi is going to the unions for coal and electricity.

Okay. So for Shaanxi Group, okay, so we are going to talk about the output of Shaanxi Group. Actually, in -- during the 14th 5-year plan, Shaanxi Group, okay, so focus on the transition and of coal and electricity and by now. So during the 14th, 5-year plan, we are going to invest in 4 power plants,coal related power plants. And we are going to build the pretty integrated producing. So we already started this project in year 2022. So the 2 units, and we have completed the key units, the major plant and the construction of the whole site is basically completed. And now, we have already entered the installation of the device equipment, and we are aiming to achieve the double units output in 2022 -- 2024. So another question is Shanghai project. The total investment is about CNY 7.86 billion. So the capacity and is about 1,000 megawatt. And by now, we already started the construction of the project, and we have completed the procedures of construction for the project. And Shanghai Power project, so is aimed to be completed in 2024. So the third project is [indiscernible] project. So the total investment is about CNY 5.3 billion. So we are going to build up 160-megawatt coal and generation. So by now, we have completed procedures for starting the project. And we are aiming to officially start the construction recently. So it is aimed to be completed and in year 2026. And we are going to investing CNY 1.3 billion in 2024 for this project. The fourth project is Luan power plant. The total investment is CNY 5.6 billion. So we are aiming to build the 2 secondary coal generation. And so it includes a lot of different facilities. And by now -- so we are preparing for this project. So it is aimed to start in the first half of 2024 and completed in 2026 and start operation. So we are aiming to invest CNY 700 million in 2024. So these are the new plants and for Shaanxi Energy. So thank you so much.

I'm [ Jai ] from [ Debang Securities ]. So I have 2 questions to Shaanxi Energy. So the first question, so you can clearly see that the company invested a lot in thermal power. So I wanted to ask about the new policies. So how will these new policies and impact your future operation? Secondly, so like Shaanxi, boss, leaders that a lot of projects will be completed and start operation in 2024. So how do you consider development and the dividend and -- like the coal and new energy? So what is our focus in 2024 -- 2026?

So let's give the floor to you, Mr. Qi again.

Yes, actually, in November 2023, the central government have this new announcement in terms of the new price system. So all the coal and all the coal power projects, so are included in this new policy. So the capacity price policy is different for different regions and different time. So in 2024 to 2025, and for the capacity price and is the RMB 100 for each kw and the electricity grid company and amounts that price accordingly. So after -- under this new price system of the capacity price. So you can see for this coal and power technology, you can clearly see these new policies included, details included. And in terms of the details of capacity price, you can see a lot of revaluation and application. So -- and will be distributed clearly and by the -- by China Energy Bureau. So if the unions have got the 3x deduction of the whole year of the whole month and again, so you will get the punishment and we remove the -- so you can clearly see the thermal power system and condition of [indiscernible] our province is very good and you place the capital rate is 95.77% on average. The capacity price capture is 96%. So that is why, in this case, so Shaanxi group -- so in January and February and [ pithead ] integrated power and actually, it's better than the average performance of the province. So in general, we can clearly see that in terms of the implementation and of the price capacity -- capacity price because on the Shaanxi Group and basically have the high parameters and the big units and we have the power plant, especially the -- and pithead power plant. So that is why in terms of the capacity price, new policy, actually, we benefited a lot from that. So this is the first response. And secondly, and in terms of the 14th, 5-year plan and after completing these projects, the next step for development and like that of usage [indiscernible] and the new coal and new energy and system. So by relying on the coal and electricity, of course, we will focus more on the new energy. So during the 14th, 5-year plan and for the new energy capacity, so we'll be over 1 million kw, and we will take the advantage of new energy to offset the coal and coal electricities impacted to the operating performance.

[ Xiang ] from [ Dongwu Securities ]. Here, I have 2 questions. The first question. So the coal chemical projects in Xinjiang area secondly, so in front of that one. So this low thermal coal and generation products, the carbon reduction. So this affected by the price subsidy. And thirdly, and the Luan project of Shaanxi Energy.

Sorry, can you repeat the question?

So the coal chemical factory in Xinjiang and in front of that one and this new and the thermal -- this new thermal and subsidy and the third question is concerning the Luan project.

Okay. the first question related to the coal chemical. So we're going to invite Mr. [ Zhang ] to answer the question.

Okay. So I'm going to respond to this question. Okay. So Xinjiang is a key region for us to develop the coal chemical industry. So in the future, so the deployment of the coal chemical in Xinjiang, so we will use the natural gas. We need to actively capture the natural gas. Secondly, in Xinjiang, so we will have the -- also premium raw materials. So these premium materials, so -- includes 2 kind of materials. The first one is the premium polymeric materials. So the second one, we will have the premium and the carbon-related materials, for example, the premium active carbon materials. And we also have the premium hard carbon materials. So which is the materials for the energy storage. So and this is a very good materials under which, the [indiscernible]. So we have very good coal. So under this coal phase is basically used for the carbon emission. So these are the major supply chain in Xinjiang. Of course -- so for the premium carbon emission projects. So the premium active carbon and welcoming soon and next step, we are going to have the composite materials for the harder -- hard carbon and the premium and the polymeric materials. Yes, actually, so the premium carbon -- active carbon materials and in Xinjiang region of course. So we -- you still needed to adhere to the official announcement from the company and the subsidies. So we are going to ask questions. Thank you so much for your question. Shanghai Energy, okay. So we have our own strength and for the integration of the coal and electricity. So we have our own coal and by screening and we have the coal -- coking coal and for the clients. And basically -- and you can see that -- so those are the affiliated projects of the coal washing and we also have our own and coal slide. So you can see under the other -- the affiliated projects of the coal wash and is very low. The price is very low. So that is where we have our strength. And for the power generation, okay, so for Pingshuo and this project is still under construction. So probably maybe after completing the project, I think we have clear answers to that. By now, I don't have further info for that project. And concerning the storage and the storage of Shaanxi, so we are going to hand over to Mr. Qi again.

Actually, and this project in Luan -- so we are still and do the research for this project. So because we are still and -- due -- and this [ pump to storage ] policies and from the central government. And there are different kind of guidelines and different plans for that. And the next step, and we are going to apply this. And for now, we don't have the specific working regiment for the pump to storage power station.

[indiscernible] Security. And thank you so much for organizing this activity. So I have several questions. So the first question goes to the 3 listed company, and this is the same question to the 3 listed company. So from the official site of China Coal, and we saw -- so in terms and of the intelligent related investment of the mines, you have made a huge investment, for example, and you have the first round intelligent mines. And in terms of the intelligent-related mines investment, so any efforts in the future? Or do you see any solid results of cost reduction and efficiency improvement? So the second and third question and go to you on the China Coal Energy. So the first question. And for the overall China Coal, the sales structures and it assumes that how many percentages go to related sales? So we see and our [indiscernible] is aiming to invest in large vessel and including wind power, CO2, and it's more likely multi-energy plan. And internally, how do we evaluate this project? So these are the questions.

And in terms of the encouragements, and all coal encouragements and intelligence and -- you can clearly see that. And the accelerating speed is very, very fast in terms of the intelligence for mines. So we still needed to see the overall results. So from a big picture for example, reduce the staff, reduce the labors; secondly, improve the safety; and thirdly, and improve the efficiency. And in terms of the energy reduction, of course, reduce labors. So by intelligence and basically, so there would be nobody in there. So actually, if there's nobody under the mine, of course, it is safer, right? So we don't need to worry about the accidents. So this is about reducing the labors. So in other places, and we basically see and a lot of the mines basically are no labors. So the safety is hugely improved. So this is not only about the smartness and intelligence of the machines. So we still need to consider about the supporting of the large model data and in terms of the forecaster, the alarming, of course, the safety is secured. And the performance has also improved. At the same time -- so by this smartness and intelligence, we can -- and it can improve the premiumness and high efficiency of the coal machines. So in terms of progressing of the smartness and intelligence, by now, you clearly see and from WeChat accounts, like [indiscernible] so basically, and we achieved the advancement level by now. So for the smart coals and including the coal production, so we have more than 80 of the coals of the mines and working locations, including the smartness and intelligence. And in terms of the Big Data, so we basically already build out the 14 controlling platforms, and we also have 15 Big Data centers. And from the corporate level, we are aiming to build up the whole group's and smart controlling platform. So including these smartness. Of course, for the next stage and the smartness will be hugely improved. So in other way -- and in terms of the corporate efficiency, in safety, and the environmental protection and of this and will be improved. I think to the investors. So it is also very positive, very good. So in terms of the investment, so we still needed to improve the investment. And on the other side, so we needed to strengthen the PR and we also needed to and improve the scientific contents. And on the other side, to the smartness, and we still need to strengthen the evaluation, and we needed to make it better. So in terms of sales structure, we are going to invite the next one, Mr. Zhang.

So there are lot of factors. So -- actually, in terms of sales of the costs are very stable, basically. So under this mode, of course, a lot of the factors are related to the market and according to the national policies. At the same time -- so it is also ready to the regional reports and regional capacities, and it also related to the quality of the coal. So from the strategic level, so you can see the sales are very stable. And you can see the percentages of the ratio 1/3 under the 1, less than 50%. So roughly -- so these are the structures of the sales. So actually, and for [indiscernible] project is our science innovation project. It is also the green fossil and the projects and [indiscernible] two and hydrogen, so these are like the clean energy. And you can clearly see that. So it has different -- the different conversations. So the progressing of this project, so we have completed the local and the filing. And we have completed procedures inside the group, and there are 2 other procedures, which are not completed. The first procedure is about the evaluation and we are actively talking to the relevant bureaus. So we are aiming to complete all the procedures in H1 of this year, and then we can start the construction in H2. And if we could start the construction in H2 and then we can start the operation in 2026. Thank you.

So according to Shaanxi Group, and I have 2 questions. So in the past years, so we haven't seen any entity cost, in the past few years, however. So there's an additional CNY 8 million in entity cost. So what was this entity cost for? And for the follow-up and entity cost, do you have any plan? The second question, and by 2023, you can see the investment -- return on investment is improved. So can you please explain why? And can you tell -- share more about the Shaanxi and the power plant in 2023, so the operation, construction?

So first of all, I'd like to explain to you briefly. So the entity cost added in 2023. So by CNY 8 million. So actually, it is the professional report. So from the accountant perspective, so actually, Shaanxi Group really, really cares about entity, and we invested a lot in the entity. So most of the projects are related to the safety output of the cost. So that is why -- so at the accountant level, you clearly see -- so the safety producing cost and the mine maintenance cost. Okay. So you can clearly see that in recent years, and we have one more entity cost. So in order to have more discount of the entity and there are some rules from the government. So if there's some kind of entity cost and then the tax can be reduced or redeemed. So that is why since year 2023, we put this entity and tax-related together. So that is why we put entity into this accounting book. And last, you said, in year 2023, so we have the newly added CNY 8 million. So -- because -- so we put this in there for the tax reduction, of course, and -- so it is within the law. So entity is notably for the safety producing of the coal. So in order to better meet the requirements of the SASAC as I see and Shaanxi Group will further build-up the core capabilities to improve the core competitiveness to achieve the high-quality development. In the future, we will continue to expand the technology and entity cost investment, especially, and we are going to improve the hazard control and for coal mines to better achieve the green and efficient development for Shaanxi Group. So you can see that the income is CNY 90 million and there's an increase of around CNY 10 million. So basically, so the ROI and of the storage-related companies is increased. So there's increase of the storage-related companies by CNY 30 million. So your judgment is totally right. So the income normally come from this new energy plant. So in year 2023, the capacity, the great purchase price has no big differences, but the income increased due to the purchase cost of the coal -- raw coal. So that is why, and due to this structure change, and then you can clearly see that the purchase cost of the coals -- raw coal is reduced. So that is why our profits will increase last year. So that is why the ROI is better.

I'm [indiscernible] [ from Fonto Security ], I'm a researcher. I have several questions, and I wanted to ask the leaders. The first question is, for China Coal, the coal chemical of China Coal. Actually, this year or the next years, so there are a lot of investment for the fossil energy. And for coal chemical, I clearly see that you have some further investment in chemical -- coal chemical. So they were the B2 impacts. The first one is that capacity will be improved. And you can see the oil price is very high. So in the future, so the price is still high. So basically, you can see the average cost very high. So I'm not quite sure about this capacity, especially and the influence to coal chemical. And the second question and go to and the Shanghai Energy. And this year, you can see the year 2023 is a year, which is the huge -- which there were huge increasement and of the installment of the units. And in year 2024, the power generation will be huge. So like some of the leaders have said, the coal capacity, and the power generation and of this and you have got the new layout and to new energies. So how do you -- how does the company duly balancing? So my question is that if the capacity is improved, so do traditional energy like coal and new energy investment, so what would be your investment strategy?

So the first question goes to Mr. Zhou.

This is a very realistic question. And recently, we are responsible for all those different batches of all the different quantitative projects, and then they are always a large investment there. However, we can already see that for this quantity integral projects for all those different projects and then according to my knowledge and -- because previously, I was also doing the job of this petrol finding and then in the last few years, we have started to do that. And then the next thing is we can already see that for this oil refinement one. So for this petrochemical one, this is actually having this big problem cost. And I can say that whatever kind of that, so for this coal, petrochemical or like oil chemical, they all like compete about the cost. So you can see it's about the coal chemical. So the first one is it is in line with this national strategy because we are also doing all those different coals, and we are rich in the coal ones. And for all the different projects that we are doing now, they are all based on this -- the original source. And for this electricity and coal, and they are all integrated. And the next thing is about the high end of the product quality. So these have already shown that for our coal chemical, this is about our own competitive advantage. And then in the end, you can already see for this oil, chemical and petrochemical, we have already launched a lot, although they have launched a lot we require actually a big amount there. So for petrochemical, especially for this high oil price has already brought a very big impact. And we are -- based on our cost advantage and for our overall advantage, so for all those product advantage, especially for all those integrated management, and we are all having huge cost advantage there. So for all kind of product competition is all about the cost. So this is also like we have this impact, but it's not too big impact. And then at the same time, we also could have this high quality development as our future direction. The second question we will have this Shanghai Energy [indiscernible] to answer that.

Thank you so much for your question. So for the question I have to say that this is like the traditional energy industry are going to this new energy direction. We have to answer that. So for Shanghai energies and how to hold this old and new energy transition, this is what we are thinking about, especially for this coal resources and the traditional energy, we are sticking to our new -- own principle. First of all, you can see for this overall resource, you have to have a very big storage. Second one is about the quality has to be like quite high. And the third one is also about this overall, like region, the place has to be good. Only we satisfy all the different demands for the coal resources, we could have that. So it would also make sure that in the future, when we have the coal resources, I would have this competitive advantage. So previously either have this good quality of the coal or have this better competitive edge. So for new energy, how to do that? And the first thing is we pay attention to this Shanghai Energy, this is a new energy. This is mainly using our production and then to develop the PV session. And then our advantage is for this Shanghai Energy, we have our own -- for the electricity grid. And therefore, all those new PV electricity could be connected to my grid. And then with my own grid, I could also have some other different equipment to transmit that. So for all these PV have basically have already been accumulated. And now we also need to have about 0.2 million kilowatts. We are also expanding about some different expansion. And then we have already got -- the first batch of the user is already over 0.2 kilowatts. So I have to say that for this newly invested for the PV, we also will have this guarantee of that. At the same time, we also have already strengthened the cooperation with the national grid. Even if I use that, and therefore, this all producer ones can also connect to the national grid. And for the national grid, we are also having this President [ John ] overall sharing. We have already got this overall plan. So for all these, they cannot be consumed. I could also have this consumption. So for this Shanghai Energy and the away from there. So the key is also to -- like have this all the private entity ones and then we could go there. So that's all.

So thank you, Mr. Wang. Because of limited time, so basically, that's all for today's Q&A session. And for all the distinguished guests, just now for all those 3 different Shanghai experts, and then they have already introduced the situation. They have already answered all your questions because of limited time. So I will say that I cannot have a more detailed communication with you. So after the meeting, you could also communicate with this investor relationship department to have this further communication with us. We also will further answer your questions. So for China Coal and for all those listed companies during the development, we have already got all those big support from all the different departments. And now we have already come to this new stage of this China Coal's high quality development. We also will strengthen this continued development to constantly enhance the quality and then to also have this first-class energy company. So lastly, I would like to thank all the different experts for answering, and I would like to thank you for the participation. So China Coal 2023, the group press release is coming to an end. Thank you so much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]