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As a leading coal enterprise in China, the Group’s business activities cover the entire coal industry chain, including coal production, washing, loading, transportation and coal trading. Taking advantage of the Group’s substantial capital investments in early stage, its Dafanpu Coal Mine is built as one of the best coal mines in terms of safety and efficiency in China. By leveraging the competitive edge of efficient operation, enhanced production technology and experience, increased cost-effectiveness and well-developed industry chain, the output and sales volume of the Group maintaining an upward momentum in generating a strong cash flow and profit.

The effective implementation of the supply-side reform has stabilized the coal industry, leading to the increase in profits of enterprises and stable price. Pursuant to the statistics released on www.cqcoal.com, the average price of Bohai-rim 5,000 kcal steam coal remained stable at the range of approximately RMB550 to 565 per tonne (inclusive of value-added tax) during the first half of 2018.

During the first half of 2018, the Group sold a total of approximately 2.51 million tonnes of commercial coal, increasing by 63% as compared with the corresponding period last year. The Group achieved a total revenue of RMB 1,150.4 million, representing an increase of 56.0% compared with the same period last year. During the reporting period, the average selling price of coal products per tonne decreased to RMB456 (net of value-added tax), decreasing by 4.8% period on period, but resulting in an increase of gross profit margin to 50.0% as compared with 40.3% in the corresponding period of 2017.

For the six months ended 30 June 2018, the Group recorded a consolidated net profit of approximately RMB415.5 million (six months ended 30 June 2017: consolidated net profit of RMB185.1 million), a significant increase comparing with the same period of last year. The Group achieved a substantial increase in cash flow for the six months ended 30 June 2018, with an EBITDA of RMB621.6 million.