Shenhuo Co., Ltd. net profit decreased by 7% in 2025; planned commodity coal production for 2026 is 6.95 million tons.

On March 24th, Shenhuo Co., Ltd. disclosed its 2025 annual report showing that the company achieved revenue of 41.24B yuan in 2025, a year-on-year increase of 7.47%; net profit attributable to shareholders of the listed company was 5.6B yuan, a decrease of 7% year-on-year; basic earnings per share were 1.81 yuan, down 6.22% compared to the previous year.

Clearly, Shenhuo Co., Ltd. in 2025 is “increasing revenue without increasing profit,” continuing the trend from 2024. At that time, accounts receivable grew by 1.99% year-on-year, while net profit attributable to the parent decreased by 27.07%.

The annual report shows that the decline in net profit was mainly affected by the coal business. Due to the overall loose supply and demand in the coal market and a general decline in prices, the company’s coal business (mining industry) revenue was 1.26B yuan, a sharp drop of 18.94% year-on-year, with gross profit margin significantly reduced to 7.7%.

At the same time, due to halted construction and production of coal mines and lower-than-expected benefits, Shenhuo Co., Ltd. made asset impairment provisions of 486 million yuan for Hecang Coal Mine, 444 million yuan for Damo Ling Coal Mine, 178 million yuan for Liuhe Coal Mine, and 146 million yuan for Xuehu Coal Mine during the reporting period, totaling asset impairment losses of 1.29B yuan, which is the most direct reason for the full-year profit decline.

However, Shenhuo Co., Ltd. still states that in 2025, its coal production ranked third in Henan Province and it is one of China’s major anthracite producers; the company’s headquarters is located in Yongcheng Mining Area, one of China’s six major anthracite production bases, giving the company many advantages in its coal business.

Regarding resource reserves, the annual report shows that as of December 31, 2025, the company’s controlled coal reserves totaled 7.99B tons, with recoverable reserves of 606 million tons.

In the face of the overall decline in coal prices, Shenhuo Co., Ltd. leveraged its dedicated railway lines and regional advantages in East China and Central China to accelerate the development of a multimodal transport system combining rail, water, and road, successfully building an efficient, low-cost logistics and transportation system, effectively hedging the industry’s profit pressure risks.

Looking ahead to 2026, China’s coal industry will continue to be in a new stage of ensuring national energy security and promoting green, low-carbon transformation in a coordinated manner. It is expected that the supply and demand of the coal market will continue to be generally balanced and loose, but structural and seasonal contradictions will still exist. With the deep implementation of policies promoting clean and efficient coal utilization, optimizing capacity structure, and stabilizing long-term contract prices, supported by the potential macroeconomic recovery, the coal price center is expected to stabilize under the joint influence of policy guidance and market regulation. The company will continue to leverage its product and regional advantages, actively respond to market changes, deepen internal management, promote technological innovation, further reduce operating costs, enhance core competitiveness, and achieve sustainable development.

In stark contrast to the coal business is the electrolytic aluminum business. In 2025, Shenhuo Co., Ltd.’s electrolytic aluminum reached full capacity for the first time and achieved production and sales balance. Meanwhile, driven by macroeconomic recovery and improved market expectations, the electrolytic aluminum business realized a total profit of 28.98B yuan, a year-on-year increase of 48.66%. Revenue from electrolytic aluminum products reached 3.31M yuan, up 11.49% year-on-year, with a gross profit margin of 30.06%.

Operational data shows that in 2025, Shenhuo Co., Ltd. produced 7.1653 million tons of coal (including 3.87M tons from Yongcheng Mining Area and 3.8523 million tons from Xuchang and Zhengzhou mining areas), and sold 7.2168 million tons (including 3.3458 million tons from Yongcheng Mining Area and 3.871 million tons from Xuchang and Zhengzhou mining areas), completing 99.52% and 100.23% of the annual plan, respectively.

It produced 108.3k tons of aluminum foil (including 83.3k tons from Shangqiu plant and 25k tons from Shanghai plant), and sold 107.4k tons (including 81.7k tons from Shangqiu plant and 25.7k tons from Shanghai plant), completing 80.23% and 79.58% of the annual plan, respectively.

The annual report states that in the future, the company will adhere to integrated operation of coal, electricity, and aluminum, consolidate and strengthen its coal and deep-processing sectors, optimize aluminum, electricity, and upstream and downstream industries, striving to form a solid, refined, and resilient real economy; strengthen capital operations, actively seek opportunities in new energy, new materials, clean coal utilization, environmental protection, high-end intelligent manufacturing, and financial investment, and accelerate the cultivation of new growth points. Meanwhile, it will explore ways to upgrade industry quality through equity cooperation, asset-liability structure optimization, revitalization of inefficient and idle assets, and disposal of ineffective assets, truly forming a dual-driven industrial pattern of asset operation and capital management that complement and promote each other; through industry upgrading, extending and supplementing the supply chain, and asset integration, it aims to improve development quality and efficiency, enhance overall competitiveness, and achieve sustainable and healthy enterprise development.

However, it also points out that the company is one of the larger electrolytic aluminum producers domestically, but mainly relies on external purchases for raw materials like alumina, which causes the production costs of electrolytic aluminum to be significantly affected by upstream product price fluctuations; at the same time, although the company has actively participated in coal resource integration, compared to industry-leading enterprises, its coal resource reserves are relatively limited, which somewhat constrains the further growth of its coal main business.

In 2026, Shenhuo Co., Ltd. plans to produce 1.7 million tons of aluminum products, 6.95 million tons of commercial coal, 770k tons of carbon products, 121k tons of aluminum foil, 280k tons of cold-rolled products, and generate 9 billion kWh of self-supplied electricity; achieving balanced production and sales.

Editor | Xu Heyang