According to a coal industry 2025 H1 interim report summary, leading companies' performance in H1 2025 generally exceeded expectations, with the period judged as the bottom for the next 3-5 years. During H1, coal prices continued declining under pressure testing conditions, with industry profitability further deteriorating. Q2 2025 marked the sector's most challenging period, with downside risks being released.

The report highlights that pricing remains the most critical factor affecting industry performance, while the sector's overall cost management has proven effective. Despite year-over-year declines in 2025 H1 financial metrics compared to 2024, leading companies maintained resilience amid performance declines.

**Key Market Analysis:**

**Demand Side Performance:** In H1 2025, thermal power generation accounted for 64.8% of total power generation, remaining the primary electricity source. Total social electricity consumption reached 4.8 trillion kWh (up 3.7% year-over-year), while total power generation was 4.5 trillion kWh (up 2.3% year-over-year). Thermal power generation totaled 2.94 trillion kWh, declining 2.4% year-over-year.

Q2 2025 showed gradual recovery in social electricity consumption growth, with thermal power growth turning positive. Q2 social electricity consumption reached 2.46 trillion kWh, growing 6% year-over-year.

**Supply Side Dynamics:** Influenced by low base effects, H1 2025 raw coal production reached 2.4 billion tons, up 5.4% year-over-year. However, production declined by 80 million tons compared to H2 2024, indicating voluntary production cuts within the industry.

**Coal Price Trends:** H1 2025 Huanghua Port thermal coal (Q5500) averaged 685.9 yuan/ton, down 22.4% year-over-year. Q1 averaged 730.7 yuan/ton (down 19.86%), while Q2 averaged 641.7 yuan/ton (down 25.3%).

H1 2025 Jingtang Port prime coking coal averaged 1,377.7 yuan/ton, down 38.5% year-over-year. Q1 averaged 1,440.86 yuan/ton (down 42.27%), while Q2 averaged 1,315.3 yuan/ton (down 37.2%).

**Financial Performance:** The coal sector achieved total revenue of 578.1 billion yuan in H1 2025, declining 18.6% year-over-year, with net profit attributable to shareholders of 54.2 billion yuan, down 31.3%.

Q2 2025 sector revenue reached 293.5 billion yuan, declining 16.5% year-over-year but increasing 3.1% quarter-over-quarter. Net profit was 24.2 billion yuan, down 37% year-over-year and 19.7% quarter-over-quarter.

Despite average industry profit declines of 30% in Q2, leading companies including China Shenhua, China Coal Energy, and Yankuang Energy outperformed industry decline rates, continuing to exceed sector performance.

**Cost Management and Profitability:** Pricing remains the most significant factor affecting industry performance, with the sector demonstrating effective cost control. H1 2025 average selling price for self-produced coal among 13 A-share listed companies was 520 yuan/ton, down 22.8% compared to 2024, with price declines being the core factor in performance deterioration.

Benefiting from enhanced cost management efforts, H1 2025 per-ton coal costs averaged 345 yuan/ton, down 19.6% compared to 2024. Per-ton gross profit was 175 yuan/ton, declining 28.6% compared to 2024.

While Q2 coal prices continued declining, increased cost management by listed coal companies significantly narrowed gross profit decline margins, performing notably better than coal price decline rates.

**Financial Health Indicators:** Financial metrics showed slight deterioration in H1 2025 compared to 2024, though leading companies maintained resilience despite performance declines. Operating expenses remained stable year-over-year but expense ratios increased due to declining operating cash flows.

The coal sector's debt ratio continued optimizing, declining from 49.2% in 2020 to 47.2% in H1 2025, benefiting from high industry prosperity, improved enterprise profitability, and continuous asset structure optimization.

Among subsectors, thermal coal demonstrated relatively strong operating net cash flow performance in H1 2025.

**Risk Factors:** Macroeconomic growth below expectations, large-scale imported coal influx, and supply releases exceeding expectations.