Event:
On Jun 3, we paid a visit to Xinji Energy in Beijing and had a talk with management regarding market concerns.
Comments:
Coal output growth likely to speed up.
The company currently boasts four operating coal mines with a combined capacity of 10.55m tons (production of 10.22m tons recorded in 07) and three in-construction coal mines with a designed capacity of 13.00m tons. Of the three in-construction, 1) Liuzhuang Mine is planned to have an annual capacity of 8m tons, of which 300 tons has been reached. Judging from current coal supplies, we expect the project to produce more than 3m tons of coal in 08E. Meanwhile, the company is stepping up the construction of the remaining 5m-ton/year facility. 2) Banji Mine, funded by IPO proceeds, is planned to have a coal capacity of 3m tons and come on stream in Jul-Oct 09E. 3) Kouzidong Mine, with a designed capacity of 5m tons, will go into operation ahead of schedule in 10E. As such, the company will be able to output 23.55m tons of coal and 20.00m tons of raw coal in 10E.