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Shenhua Energy Expects Coal Sales to Surpass Target This Year

China Shenhua Energy Co. (1088), the listed unit of the nation’s biggest coal producer, said it expects 2012 sales volumes to surpass a target set at the end of last year because of rising demand.

Coal sales may increase to 425 million metric tons, based on the “positive results” seen in January and February, Chairman Zhang Xiwu told reporters in Hong Kong today. The company’s previous sales target was 411 million tons, he said.

The unit of Shenhua Group Corp. reported an 18 percent gain in annual profit on March 23 as growing domestic demand drove sale volumes to a record and prices soared to a three-year high. Its earnings were also helped by the company’s 8.7 billion-yuan ($1.3 billion) acquisition of assets from its parent last year that boosted recoverable coal reserves.

Shenhua is “seriously and actively” pushing for additional asset injections from its parent, President Ling Wen said at the media briefing, declining to give a timeline.

The company said March 1 that it will buy stakes in three companies and rail cars from its parent for 3.45 billion yuan. The purchase will reduce competition with Shenhua Group, increase coal imports from Mongolia and better integrate transportation networks for its coal-power business in Jiangsu province, according to the unit.

Shenhua has fallen 4.9 percent in the past year in Hong Kong trading, compared with the 10 percent drop in the benchmark Hang Seng index. The stock declined 1.8 percent to HK$33.25 as of the midday break.

Net income increased to 45.7 billion yuan in 2011, beating a mean estimate of 45.4 billion yuan in a Bloomberg survey of 19 analysts. Benchmark coal prices in China, the world’s largest user of the fuel, surged to 855 yuan a ton on Oct. 23, the highest since Oct. 20, 2008.

To contact the reporter on this story: Aibing Guo in Hong Kong at

To contact the editor responsible for this story: Andrew Hobbs at

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