Shaanxi Coal Industry (601225.SS) Financial Analysis and Outlook
I. Key Operational Changes in the Current Quarter
- Significant Optimization of Operating Cash Flow: Net cash flow from operating activities reached 9.677B CNY this quarter, a sharp year-on-year increase of 37.27%. This was primarily driven by a reduction in current account payments, reflecting improved efficiency in cash recovery.
- Rapid Growth in Power Business: As a focus of the integrated transition, the power sector performed impressively. In Q1 2026, power generation and sales volumes grew by 20% and 21% year-on-year, respectively. Multiple projects under construction (such as the Binchang CFB project and the Phase III of Yiyang Power Plant) have commenced production, effectively supporting the expansion of generation capacity.
- Pressure on Costs and Financial Expenses: Financial expenses rose by 61.35% year-on-year, primarily due to an increase in interest-bearing debt. Meanwhile, credit impairment losses increased due to higher provisions for expected credit losses on accounts receivable, which created some pressure on net profit.
II. Outlook for the Next Quarter and Second Half of the Year
- Improvement in Market Supply and Demand: Looking ahead to the second half of the year, the coal supply side faces limited elasticity due to factors such as coal export controls in Indonesia, geopolitical conflicts pushing up energy prices, and stricter domestic safety supervision. It is expected that the market supply and demand for the whole year will shift from loose to balanced-to-tight, and coal prices are expected to remain elevated, with thermal coal consumption projected to grow by approximately 3% year-on-year.
- Dividends of Coal-Power Integration: The company’s focus for capital expenditure has shifted toward power projects (with a planned capital expenditure of 16.76B CNY in 2026). As power generation capacity is further released, the optimization of generation costs and the growth of power sales volume will serve as the second growth curve to mitigate coal market volatility and enhance profits.
III. EPS Forecast for the Coming Year
Based on projections from market research institutions, Shaanxi Coal Industry’s net profit attributable to parent company shareholders in 2026 is expected to be approximately 20.1B CNY. Based on current financial data and share capital structure, the EPS forecasts from market analysts are as follows:
- 2026 Full-Year Forecast EPS: The consensus forecast ranges from 2.00 CNY to 2.20 CNY.
- Core Drivers: This forecast is primarily based on the upward trend in average coal prices (with an expected average price for Qinhuangdao 5500 kcal thermal coal between 800 CNY and 900 CNY per ton) and the operational improvements brought about by the capacity release of the power sector.
Source:
- https://www.chnfund.com/article/9c1fbe61-58fa-7566-5c2f-3a20d0df6dd7
- https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=601225&id=12181343
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