On the evening of December 19, 2025, China Shenhua Energy Company Limited released its "Report on the Issuance of Shares and Payment of Cash to Purchase Assets and Raise Supporting Funds in a Connected Transaction." The company plans to acquire equity in 12 core enterprises from its controlling shareholder, National Energy Investment Group, through a combination of share issuance and cash payment, with a total transaction value reaching 133.598 billion yuan, of which over 90 billion yuan will be paid in cash.
During an investor conference call in August 2025, China Shenhua's management assured investors that "this acquisition will not affect the company's dividend policy or its stability." Now, with the detailed restructuring plan disclosed, this commitment is being gradually fulfilled, as China Shenhua is crafting a "shareholder-friendly" template for the A-share market.
The restructuring plan is designed with a 70% cash payment ratio, totaling over 90 billion yuan, complemented by approximately 40 billion yuan in share payments. Unlike acquisitions relying solely on share issuance, this high cash proportion effectively mitigates equity dilution. Post-transaction, China Shenhua's earnings per share for 2024 are projected to rise to 3.15 yuan per share, an increase of 6.10%; for the period from January to July 2025, EPS is expected to climb to 1.54 yuan per share, a boost of 4.28%.
Following the transaction, the injected assets are forecast to generate new profits during the commitment period. These profits will be shared among a relatively smaller number of shares, which is conducive to further enhancing post-restructuring earnings per share.
As a "dividend benchmark" in the A-share market, China Shenhua has long established a stable mechanism for shareholder returns. The company's "2025-2027 Shareholder Return Plan" indicates that the annual cash dividend for the next three years will be no less than 65% of the net profit for that year, a 5-percentage-point increase compared to the 2022-2024 plan. Furthermore, the target assets possess ample monetary funds. Upon consolidation by China Shenhua, it is estimated that approximately 40 billion yuan in monetary funds will be added, along with an annual increase of about 20 billion yuan in net cash flow, thereby enhancing the company's asset liquidity.
Since its A-share listing in 2007, China Shenhua has distributed cumulative cash dividends exceeding 510 billion yuan. Over the past three years, the company's annual cash dividend payout ratio has consistently remained above 70%. In 2024, the company distributed cash dividends of 44.903 billion yuan, accounting for 76.5% of the net profit attributable to shareholders for the year. In 2025, it implemented an interim dividend for the first time, distributing 19.471 billion yuan, which represented 79.0% of the net profit attributable to shareholders for the first half of 2025.
According to the transaction plan, this restructuring covers key energy sectors including coal production, pithead coal power, coal chemical processing, and coal logistics. Upon completion, China Shenhua's total asset scale is set to increase by over 200 billion yuan.
The growth in core metrics brought by the transaction is significant: recoverable coal reserves will surge by 97.71% to 34.5 billion tonnes; annual coal production capacity will increase by 56.57% to 512 million tonnes; power generation installed capacity will rise by 27.82% to 60.88 GW; and polyolefin production capacity will see a substantial boost of 213.33% to 1.88 million tonnes.
The significance of this restructuring extends beyond mere scale expansion; it lies in constructing a more complete closed-loop industrial chain encompassing "coal-power-transportation-chemicals." It substantially resolves the two-decade-long issue of同业竞争 (homogeneous competition) between China Shenhua and National Energy Investment Group. The trillion-yuan restructuring is reshaping the foundation for China Shenhua's future profitability from both the dimensions of business scale and industrial chain completeness.
The extension of performance guarantee periods for certain asset portfolios to six years stands out as another major highlight of this restructuring, serving to protect the interests of minority shareholders.
To enhance the quality of the target companies, focus them on their core businesses, improve their synergy with the listed company, and safeguard the interests of all shareholders, a pre-restructuring was conducted for Guoyuan Power, Xinjiang Energy, Wuhai Energy, Pingzhuang Coal Industry, and Baotou Mining under the coordination of National Energy Investment Group prior to the transaction. This involved剥离 (divesting) inefficient and non-performing assets to ensure the quality of the purchased assets.
To better protect the interests of minority shareholders, the performance guarantee period for the mining right asset portfolios of Xinjiang Energy, Wuhai Energy, and Jinshen Energy's subsidiaries is set at six years, which is longer than typical periods. This extended six-year performance guarantee mechanism for some assets ensures that China Shenhua can smoothly absorb assets that might incur short-term losses while locking in long-term growth potential, offering minority shareholders protection that far exceeds conventional market standards.
The multiple innovative designs of China Shenhua's trillion-yuan restructuring are setting a new benchmark for mergers and acquisitions among A-share listed companies.
The high cash payment ratio, extended performance guarantee period, and clear dividend safeguards constitute the core features of this "shareholder-friendly" M&A template. This model not only aligns with national policies encouraging listed companies to enhance core competitiveness through resource integration but also fully considers the protection of minority shareholders' interests.
Upon completion of the restructuring, China Shenhua will control more high-quality integrated coal industry chain assets, optimize its multi-regional coordinated energy supply structure, and enhance its energy strategic guarantee capability. While boosting energy security capabilities, this restructuring is expected to significantly increase the level of corporate free cash flow, providing a more solid profit foundation for the company to maintain its high dividend payout ratio policy.
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