The company announced its 2024 semi-annual results. The company released its 2014 semi-annual report. 24H1 achieved revenue of 17.65 billion yuan, or -19.3% year-on-year, and achieved net profit of 2.23 billion yuan, or -58% year-on-year; of these, Q2 achieved net profit to mother of 0.94 billion yuan in a single quarter, -27.1% month-on-month and -51% year-on-year.

Safety supervision pressure has subsided, and Q2 production increased sequentially.

24H1 achieved 27.67 million tons of raw coal production, -6.3% year-on-year, of which Q2 raw coal production was 14.43 million tons, +9% month-on-month and -2.8% year-on-year.

24H1 mixed coal produced 13.77 million tons, -10.1% year over year; Q2 produced 7.32 million tons, +13.5% month-on-month and -3% year over year.

The 24H1 injection coal output was 9.7 million tons, -5.1% year on year; Q2 production was 4.85 million tons, which was the same month on month, -6.4% year over year.

24H1 achieved commercial coal sales of 24.55 million tons, or -9.5% year over year, of which Q2 sold 12.74 million tons, +7.9% month-on-month and -11.7% year over year.

24H1 mixed coal sold 13.85 million tons, -9.8% year over year; Q2 sales volume was 7.3 million tons, +11.5% month-on-month and -9.5% year over year.

Coal injection 24H1 sold 9.36 million tons, -4.7% year over year; Q2 sales volume was 4.77 million tons, +3.9% month-on-month and -8.6% year over year.

Prices are falling, and the bottom is expected to be reached in August.

The average price of 24H1 ton of coal was 683 yuan/ton, -11.6% year over year, of which the average price for Q2 was 677 yuan/ton, -1.8% month-on-month and -1.5% year-on-year.

The cost of 24H1 ton of coal was 371, +10.1% year over year, of which Q2 cost 365 yuan/ton, -3.3% month-on-month, and +12.3% year-on-year.

Increased reserves guarantee the company's sustainable development. The company purchased coal prospecting rights in the Shangma block of Xiangyuan County for 12.126 billion yuan, with corresponding reserves of 0.82 billion tons. The coal prospecting rights in the Shangma block of Xiangyuan County, Shanxi Province, which were contested this time, are close to the company's headquarters and main mining area. It is a sustainable coal resource that the company has been actively seeking, and will further increase the company's coal resource reserves.

Investment advice. In view of the significant decline in coking coal prices, we lowered our performance expectations. The company's net profit for 2024-2026 is estimated to be 4.48 billion yuan, 5.02 billion yuan, and 5.46 billion yuan, respectively, and the corresponding PE is 9.5X, 8.5X, and 7.8X respectively.

Risk warning: Coal prices have collapsed, coal sales have fallen short of expectations, and production has declined beyond expectations.