On March 30, China Shenhua Energy Company Limited (601088), a leading coal producer, disclosed its latest annual report. The company reported revenue of 294.916 billion yuan for 2025, a decrease of 13.2% year-on-year. Net profit attributable to shareholders was 52.849 billion yuan, down 5.3% from the previous year. Basic earnings per share stood at 2.66 yuan.
The company stated that during the reporting period, influenced by factors such as the supply-demand dynamics in the coal market, its coal sales volume and average sales price decreased by 6.4% and 12.1% respectively. This led to a 17.7% year-on-year decline in revenue from coal sales. The power segment also faced pressure. Due to factors including reduced utilization hours for coal-fired power and lower electricity prices, electricity sales volume and the average electricity sales price fell by 3.9% and 4.0% respectively, resulting in a 9.3% decrease in revenue from power sales.
In contrast, the coal chemical business performed steadily. Benefiting from a low base effect due to maintenance in the same period last year and increased production, sales volumes of polyethylene and polypropylene increased by 12.6% and 11.5% year-on-year respectively. This drove a 1.7% increase in revenue from the coal chemical business.
Regarding profit distribution, China Shenhua continued its tradition of high dividend payouts. For the end of 2025, the company proposed a final cash dividend of 1.03 yuan per share. Combined with the interim cash dividend distributed earlier in the year, the total cash dividend for the full year is expected to reach 41.811 billion yuan, representing 79.1% of the net profit.
According to Wind data, since its A-share listing in 2007, China Shenhua has distributed cumulative cash dividends totaling 502.339 billion yuan. Its average annual dividend payout ratio is 63.58%, and this ratio has averaged as high as 229.79% over the past three years.
In terms of resource reserves, as of the end of 2025, China Shenhua's retained coal resources increased by 7.05 billion tonnes year-on-year to 41.41 billion tonnes. Its recoverable reserves increased by 2.22 billion tonnes to 17.31 billion tonnes.
Notably, in December 2025, the company disclosed a plan to acquire coal mining, pithead power, coal chemical, and logistics service businesses from its parent company, China Energy Investment Corporation, through issuing A-shares and paying cash. Upon completion of the transaction, the company's retained coal resources are projected to increase to 68.49 billion tonnes, a growth of 64.72%. Recoverable coal reserves are expected to rise to 34.5 billion tonnes, up 97.71%. Coal production capacity is set to increase to 512 million tonnes, a growth of 56.57%.
Looking at the industry overall, China's energy supply security capability improved effectively in 2025. Raw coal production and commercial coal consumption remained stable, further highlighting coal's role as a baseline energy source. Throughout the year, coal prices experienced wide fluctuations, with the average price center declining.
On the supply side, domestic coal production maintained steady growth. Data from the National Bureau of Statistics showed that industrial raw coal production above the designated size reached 4.83 billion tonnes in 2025, a year-on-year increase of 1.2%. Although imports decreased by 9.6% to 490 million tonnes, they remained at the second-highest level in history. On the demand side, national commercial coal consumption was 4.99 billion tonnes, down 0.7% year-on-year. Coal consumption for power generation, which accounts for about 58.3% of total consumption, decreased by 2.1%, while coal consumption for the chemical industry increased by 10.2%.
Influenced by the loose supply-demand balance, the average coal price declined significantly, leading to a substantial contraction in industry profits. According to Wind data, the average spot price for 5,500 kcal thermal coal at Qinhuangdao Port in 2025 was 696.88 yuan per tonne, down 18.49% year-on-year. Total profits for the coal mining and washing industry were 352 billion yuan, a decrease of 41.8%.
Entering 2026, factors such as conflict in the Middle East have driven a recovery in international demand for coal and power, pushing coal prices higher. As of March 27, the average spot price for 5,500 kcal thermal coal at Qinhuangdao Port had risen to 761 yuan per tonne. In the first two months of the year, total profits for the coal mining and washing industry increased by 4.5% year-on-year, indicating signs of recovery in the sector.
Looking ahead to 2026, China Shenhua anticipates that domestic coal demand will remain generally stable. Demand for thermal and coking coal is expected to be largely steady, while demand for chemical coal still has room for growth. Coal production is projected to remain generally stable, and coal imports may hold steady or see a slight decrease. The coal market is expected to achieve a basic supply-demand balance, with prices fluctuating within a reasonable range.
China Shenhua is the largest listed coal company in China. It is an A+H share listed subsidiary of China Energy Investment Corporation. The company was founded in 2004, listed on the Hong Kong Stock Exchange in 2005, and on the Shanghai Stock Exchange in 2007. Its business encompasses six segments: coal, power, railways, ports, shipping, and coal chemicals. As of the close on March 31, China Shenhua's share price was 46.75 yuan per share, with a total market capitalization of 992.585 billion yuan.
Comments