【Guosheng Energy and Power】Huaibei Mining: 26 Years of Rising Quantity and Price Expected

（Source: Mingshuo Energy）

Summary

The company released its 2025 annual report. In 2025, operating revenue was RMB 41.125 billion, down 37.44% year over year; net profit attributable to owners of the parent company was RMB 1.506 billion, down 68.98% year over year. Coal as the core business: both volume and pricing fell in 2025; both volume and pricing are expected to rise in 2026. ➢On the production side: In 2025, the company’s output of commercial coal fell 15.4% year over year to 17.38 million tons, mainly due to phased factors such as the shutdown of the Zhuzhuang Coal Mine and insufficient work-face succession in some key mines. 2026 production is expected to grow. First, the company will speed up production at the Xihu Mine to ensure that the 815 work face and 816 work face are put into operation smoothly by late March 2026 and by late November 2026, respectively; second, it will advance the construction of the Taohutu Coal Mine, which is expected to be completed and put into production in 2026.

➢On the price side: In 2025, the company’s comprehensive selling price of coal was RMB 837/ton, of which coking coal was sold at RMB 1,201/ton, down 29.4% year over year; in March 2026, the company’s long-term agreement price for main coking coal was RMB 1,700/ton, which is clearly higher than the 25-year selling price.

➢The results of cost control are significant: The company has continued to promote cost reduction and efficiency improvement. In 2025, the selling cost of coal was RMB 497/ton, down RMB 39/ton year over year. The company aims to reduce coal cost by more than RMB 20/ton year over year in 2026.

Methanol selling prices are moving upward, and the coal-chemical business is opening up room for upside.

➢In 2025, the company produced 0.697 million tons of methanol, up 0.2893 million tons year over year, a growth rate of 70.96%; it sold 0.2591 million tons of methanol (excluding internal use), up 0.0607 million tons year over year, a growth rate of 30.59%, mainly due to a reduction in methanol used internally; the average methanol selling price was RMB 2,056.32/ton (tax-exclusive), down RMB 100.89/ton year over year.

➢In 2025, the company produced 0.5468 million tons of ethanol, up 0.1757 million tons year over year, a growth rate of 47.35%; it sold 0.5207 million tons of ethanol, up 0.1588 million tons year over year, a growth rate of 43.88%. The average ethanol selling price was RMB 4,887.79/ton (tax-exclusive), down RMB 111.63/ton year over year.

➢According to data from Jinlianchuang, in March, geopolitical conflicts intensified; the Iranian gas field was attacked; and installations were shut down. Shipping in the Strait of Hormuz was obstructed, causing a major tightening in the supply of China’s main imported methanol sources. Import costs rose significantly, and the fundamentals of methanol supply and demand continued to improve. Supported by the concentrated release of multiple positive factors, domestic methanol spot prices surged significantly. Taking Inner Mongolia’s north line as an example, the price at the beginning of the month was only RMB 1,890–1,930/ton, and by March 23 it had risen to RMB 2,400–2,440/ton. The increase in the range reached RMB 500/ton. Methanol-from-coal profits clearly recovered. As of March 24, northwest China’s methanol-from-coal profit was about RMB 535/ton, up nearly RMB 520/ton from early March.

“Strengthen the core business and improve the quality of industries; move toward transformation and development with full force” in 2026.

➢Accelerate the demonstration and preparation for ethanol expansion and quality improvement projects, striving to start construction before the end of the year; speed up coordination of the permit-processing for the projects of the eastern wind farm in Lieshan District and the central wind farm in Duji District, striving to start construction respectively by late September and by the end of the year; actively participate in competitive bidding for resources in non-coal mines, striving to acquire 100 million tons of stored resources in 2026, and start construction of one non-coal mine.

➢Coordinate and advance the construction of the “mine, land, and safety” three types of projects for the Taohutu Coal Mine. It is expected to be completed and put into operation in 2026. Fully advance the construction of the 2×660MW ultra-supercritical coal-fired power generation unit project for energy-accumulating power generation, striving to complete the “168” trial operation in the first half of the year. Accelerate the construction progress of non-coal mines, striving for the official commissioning of the Dashan Mine in Xixian County by the end of the year, for the Huaping Ganqing Mine to have conditions for commissioning and acceptance, and for the Nanzhao Qingshan Mine to have conditions for production.

➢Advance at a high standard the construction of the 20,000-ton pyridine alkali project and the 10,000-ton p-toluenesulfonic acid project, aiming to complete and put them into operation as early as possible. Solidly advance the acquisition and storage of deep and boundary-external resources from production mines within the province, as well as high-quality coal resources from outside the province, to strengthen the momentum for the development of the coal core business; based on existing products such as hydrogen and ethanol, actively plan and implement a number of high-end chemical new material projects.

Dividends continue to give back to the market. In 2025, the company plans to distribute RMB 2.5 for every 10 shares, for a total cash dividend of RMB 673 million, with a dividend payout ratio of about 44.7%.

Investment recommendation: Considering the shutdown of the Zhuzhuang Coal Mine in 25, the company’s coal production capacity will decline, so we lower our 26 revenue forecast. However, considering that the company’s Xihu and Taohutu are expected to be put into operation in 26–27, with volumes contributing to some extent, and that coking coal and methanol prices will clearly recover, together with a strategy of ongoing cost optimization, we expect the company’s net profit attributable to shareholders for 26, 27, and 28 to be RMB 2.92 billion, RMB 3.81 billion, and RMB 4.46 billion, respectively, corresponding to PE of about 12.8X\9.8X\8.4X.

Risk warning: Coking coal prices may fall short of expectations; methanol prices may fall short of expectations; project commissioning may fall short of expectations.

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