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The Group is a leading and efficient coal enterprise in China with its business covering the whole coal industry chain. From coal production to washing, loading, transportation and coal trading, the Group seeks profit maximization in each of its business segment throughout the whole industry chain. The Group focuses on the development of Dafanpu Coal Mine and has built the Dafanpu Coal Mine into one of the safest and efficient coal mines in China. Benefitting from the advantages of environmental protection and the quality of coal products, well-developed industry chain, sound cost control and efficient production technology, the Group has experienced continuous remarkable growth in its turnover while maintaining a strong cash flow and profit.

Since 2015, the PRC government has been implementing supply-side reform, and contributing to the de-capacity in the coal industry, which resulted in an overall balance in supply and demand in the coal industry, and coal prices have remained stable during the year ended 31 December 2018. Drawing upon its high-quality coal layers, mining efficiency and mining cost reduction, the Group thereby has been achieving the best possible gross profit margin in the current coal market. The Group will strictly adhere to control production cost, follow the operating strategy of low-cost production and seize all competitive edges of its well-developed industry chain.

The Group has achieved a total revenue of approximately RMB2,443.4 million for the year ended 31 December 2018, with a significant increase of approximately 39.7% compared with the same period last year . This was mainly due to, on one hand, the increase in sales volume in accordance with market demand while the coal prices remained in a medium-to-high level in recent years. During the year ended 31 December 2018, the average selling price of the Group’s coal products per tonne slightly reduced by approximately 5.0% year-on-year, and the gross profit margin remained stable at approximately 44.9%.

For the year ended 31 December 2018, the Group’s consolidated net profit amounted to RMB807.0 million, representing an increase of approximately 49.4% compared with the corresponding period last year. For the year ended 31 December 2018, the Group has achieved a substantial increase in cash flow, with an EBITDA reaching RMB1,246.4 million.

The Group’s turnover and profitability has maintained a continuous growth during the reporting period, which was primarily attributable to the implementation of its all-around optimized management strategy, which included: (1) the Group has been gradually increasing the port coal storage, on-site delivery and distribution business, so as to enhance the Group’s price bargaining ability at port and to boost our gross profit margin in the best possible in the industry‘s average level; (2) the Group has been sparing no efforts to enhance sales channels during the reporting period and vigorously explore and widen various quality customer base, with a view to maintain high receivables recovery ratio; (3) the Group has been continuing to control sales, transportation, port and management costs strictly, thereby maximizing our profit.