Key Changes in the Current Quarter
- Revenue and Sales Volume Declined While Profit Showed Resilience: Total operating revenue for the first quarter of 2026 reached RMB 34.189 billion, representing a year-on-year decrease of 10.9%. Meanwhile, net profit attributable to shareholders of the listed company stood at RMB 3.844 billion, down just 3.2% year-on-year. The smaller decline in net profit compared to revenue indicates effective cost control and favorable product pricing strategies acting as buffers.
- Contraction in Core Coal Production and Sales: Influenced by market demand and active pacing adjustments, self-produced commercial coal sales volume dropped by 2.98 million tons year-on-year (reducing revenue by RMB 1.462 billion), and outright trading coal sales volume decreased by 7.77 million tons (reducing revenue by RMB 3.778 billion). However, average selling prices for both self-produced and trading coal recorded slight year-on-year increases (up by RMB 4 per ton and RMB 11 per ton, respectively), partially offsetting the impact of lower sales volumes.
- Significant Optimization in Cash Flow: Net cash generated from operating activities surged by 1,501.2% year-on-year to RMB 5.747 billion. This was primarily driven by a substantial year-on-year reduction in working capital occupation, significantly improving liquidity management and cash recovery.
- Divergence in the Coal Chemical Segment: Urea performance was standout, with sales volume surging by 17.3% and average selling prices rising by 5.3%. Although polyolefin sales volume increased slightly by 4.8%, its profitability was compressed by a market-driven decline in selling prices (down 8.8%).
Outlook for the Next Quarter
- Stable Coal Supply-Demand Dynamics and Long-Term Contract Pricing: The domestic Chinese coal market is expected to maintain a balanced supply-demand fundamental. As power plants and other downstream enterprises prepare inventories ahead of the peak summer electricity consumption season, purchasing demand is projected to find support. Long-term contract fulfillment rates should remain stable, safeguarding baseline revenues.
- Cost and Price Fluctuation Risks in Coal Chemicals: Fluctuations in international energy and chemical feedstock prices will continue to impact profit margins for polyolefin and methanol products. The company will need to optimize production processes and control raw material expenses to counter cyclical pricing pressures in downstream chemical products.
- Continuation of Cash Flow Strengths and Refined Operations: Building upon the significant improvements in first-quarter cash flow management, the company is expected to further deepen supply-demand balancing and working capital control, while steadily advancing its modern coal chemical bases and related logistics infrastructure to maintain a sound balance sheet structure.
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