On October 29, 2025, Shaanxi Coal Industry Company Limited released its Q3 financial report. In the first three quarters, the company reported revenue of RMB 118.08 billion, down 12.81% year-on-year, and net profit attributable to shareholders of RMB 12.71 billion, a decline of 27.22%. Adjusted net profit stood at RMB 11.49 billion, down 31.95%, while net operating cash flow was RMB 27.72 billion, down 26.86%. In Q3 alone, revenue reached RMB 40.10 billion (down 1.45% YoY), with net profit at RMB 5.08 billion (down 5.80% YoY) and adjusted net profit at RMB 4.27 billion (down 17.34% YoY).
**Key Highlights:** 1. **Coal Operations:** Production and sales remained stable, with output rising 2.03% YoY to 130.37 million tons in the first nine months, while sales grew 0.4% to 189.20 million tons. Q3 output was 42.97 million tons, with sales at 63.21 million tons. Despite a 13.04% YoY drop in average selling price (RMB 540/ton), cost control was robust, with sales cost at RMB 376/ton (down 5.44% YoY), underscoring cost advantages.
2. **Power Business:** Total power generation fell 2.78% YoY to 31.55 billion kWh, with sales down 1.95% to 29.60 billion kWh. The company’s installed coal-fired capacity totaled 20,280 MW (8,960 MW operational; 11,320 MW under construction), signaling long-term growth potential.
3. **Investment Gains:** Q3 net profit included ~RMB 800 million from divestments. Exiting non-core investments may reduce earnings volatility, allowing focus on coal-power synergies for stable profitability.
4. **Future Capacity:** The company is advancing capacity expansions, including approvals for the Yushen Phase III/IV mines and Xiaohaotu No. 1, securing high-quality reserves in northern Shaanxi for sustained growth.
**Outlook & Rating:** With China’s thermal coal market expected to maintain mid-to-high price levels amid inelastic supply, Shaanxi Coal’s integrated strategy and low-cost reserves position it for growth. Excluding equity investment impacts, 2025–2027 net profit is projected at RMB 17.4/18.8/19.3 billion (EPS: RMB 1.79/1.94/1.99), warranting a "Buy" rating.
**Risks:** Macroeconomic uncertainty, geopolitical factors, policy shifts, and mine safety incidents.
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