In a significant late-night development, China Shenhua Energy Company Limited (CHINA SHENHUA), a leading coal giant in the A-share market, issued a flurry of 88 announcements. Among them, the "Draft Report on China Shenhua's Issuance of Shares and Cash Payment for Asset Acquisition and Fundraising" revealed plans to acquire related assets from China Energy Investment Group and its wholly-owned subsidiary Western Energy for a staggering RMB 133.598 billion.
Concurrently, China Shenhua proposed jointly increasing capital in China Energy Group Finance Company Limited ("Finance Company") alongside China Energy Investment Group, proportionate to their shareholdings. China Shenhua's contribution will be RMB 6 billion. As of December 19's market close, the company's total market capitalization exceeded RMB 800 billion.
**Details of the Late-Night Announcement** On the evening of December 19, China Shenhua disclosed plans to acquire 100% equity in multiple subsidiaries under China Energy Investment Group, including Guoyuan Power, Xinjiang Energy, Chemical Company, Wuhai Energy, Pingzhuang Coal, and others, via a combination of A-share issuance and cash payment. The total transaction value stands at RMB 133.598 billion, with a 30% equity and 70% cash payment split (RMB 93.519 billion in cash).
The deal does not qualify as a major asset restructuring under regulatory standards, as the target companies' combined assets, net assets, and revenue each account for less than 50% of China Shenhua’s metrics. The transaction involves 12 target companies spanning coal, pithead coal power, and coal chemical sectors, aiming to enhance core business capacity, resource reserves, and industrial chain optimization.
Post-transaction, China Shenhua’s coal reserves will rise to 68.49 billion tons (+64.72%), recoverable reserves to 34.5 billion tons (+97.71%), and annual output to 512 million tons (+56.57%). Earnings per share (EPS) are projected to increase to RMB 3.15 in 2024 (+6.1%) and RMB 1.54 for Jan–July 2025 (+4.4%).
**Revised Transaction Scope** Initially, the plan included acquiring 100% equity in an e-commerce subsidiary, but this was later excluded without altering other targets. The adjustment does not constitute a material change to the restructuring plan.
**Shareholder Approval Pending** The proposal requires approval at an upcoming shareholders’ meeting, with details to be announced separately.
**Additional Capital Injection** Separately, China Shenhua and China Energy Investment Group agreed to jointly inject RMB 15 billion into Finance Company, raising its registered capital from RMB 17.5 billion to RMB 32.5 billion. China Shenhua’s 40% stake translates to a RMB 6 billion contribution. The move aims to bolster the finance arm’s capital adequacy and risk resilience, facilitating better liquidity management for the group.
**Market Performance** China Shenhua’s shares closed at RMB 40.59 on December 19, with a market cap of RMB 806.463 billion. As China’s largest listed coal producer, the company operates across coal, power, logistics, and coal-to-olefins.
**Financial Snapshot** For the first three quarters of 2025, revenue fell 16.6% YoY to RMB 213.151 billion, while net profit attributable to shareholders dropped 10% to RMB 39.052 billion. Q3 revenue declined 13.1% YoY but rose 9.5% QoQ to RMB 75.042 billion, with net profit down 6.24% YoY but up 13.5% QoQ to RMB 14.411 billion. The company attributed the downturn to lower coal sales volumes and prices, as well as reduced electricity sales and tariffs.
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