The Reorganization And Integration Of Coal Enterprises Behind The "Coal Flying Dance": Unified Management And Coal Power Joint Venture

On November 16, China Shenhua announced that in October, the company's commercial coal output was 24.9 million tons, a year-on-year increase of 10.4%; and the coal sales volume increased by 10.4%.

Capital market foresight, has opened a "coal flying dance" market. Before 2012, China's coal enterprises experienced the "golden decade" and enjoyed numerous honors. However, with the adjustment of both sides of supply and demand, the curtain of structural reform on the supply side has gradually opened, trying to break through the shackles left over by history and radiate new vitality in the new era.

Behind the "coal flying dance" is the implementation of many coal restructuring projects that have been brewing for many years this year. At the end of October, the reorganization of Shenmei group, which had been planned for many years, was settled. The controlling right of Hongyang energy, a listed company, was changed. Liaoning Energy Industry Holding Group Co., Ltd. obtained the controlling right by means of agreement transfer. The listed company also changed its name to Liaoning energy.

"The historical trend of separation, separation and combination of coal industry also indirectly reflects the current adjustment of China's energy structure." On November 11, Li Chaolin, an expert in the coal industry of Henan Shenhuo Group Co., Ltd., said in an interview with the reporter of the 21st century economic report that the current trend of coal industry integration and speed-up is not only in line with the needs of national cost accounting and macroeconomic development, but also a process in which new energy and renewable energy continue to replace traditional energy.

In Li Chaolin's view, this integration has been carried out from central enterprises to provincial enterprises, and will continue in the future. In the process, a large number of coal enterprises with innovative business models have emerged.

Integration surging

In July this year, the joint reorganization plan of Shandong energy group and Yankuang Group was formally deliberated and passed at the promotion of Shandong provincial enterprise reform and cadre meeting. So far, the news of the merger of the two coal enterprises finally settled. According to the financial data of both sides in 2019, the total assets of Shandong energy group after restructuring will reach 637.9 billion yuan and the operating income will reach 637.1 billion yuan. This also means that the seven major mining bureaus of Shandong in history have been reunited.

In October, in order to give full play to the advantages of industrial cluster of energy enterprises in Shanxi Province, improve the degree of concentration, and promote the comprehensive reform pilot of energy revolution to achieve a major breakthrough, Shanxi Province plans to benchmark the state energy group, jointly reorganize three coal enterprises of Tongmei group, Jinmei group and Jinneng group, and simultaneously integrate the relevant assets of Lu'an Group and Huayang new materials technology group and the reformed China (Taiyuan) coal trading center, set up Jinneng holding group.

On October 30, Jinneng holding group was officially listed. This also means that Shanxi promotes the reform and reorganization of state-owned assets and state-owned enterprises to achieve a major breakthrough. After restructuring, it is roughly estimated that its future revenue will be about 600 billion yuan, which also makes Jinneng holding group the second largest coal enterprise in China and the third in the world after the state energy group.

"The target of Jinneng holding group is national energy group. The state energy group was formed in 2017 by the merger and reorganization of China Guodian group and Shenhua Group, two former world top 500 enterprises. " Li Chaolin said that at present, its asset scale is more than 1.8 trillion yuan, with revenue of 556.1 billion yuan in 2019 and coal production of 510 million tons.

This trend of integration will become particularly significant in 2020. In addition to the integration and speed-up of Shandong, Shanxi and other coal provinces, Ningxia, Xinjiang and Inner Mongolia, where coal resources are concentrated in the northwest, are also actively planning. According to the incomplete statistics of energy research think tanks before, at the level of central enterprises, China Coal Group, state energy group (Shenhua), Guoxin group and Chengtong Group are also building coal assets integration platform of central enterprises, and plan to merge and reorganize coal assets of China Resources Group, Poly Group, state investment Corporation and China Railway Resources Corporation.

For a long time, the concentration of coal industry is low, and there are still thousands of small enterprises below 300000 tons. Therefore, the reorganization of coal enterprises has become an important measure to solve the problems of scattered, disorderly and weak coal industry.

"China's energy resources are characterized by rich coal, lack of oil and gas. However, with the rapid development of energy industry, the use of coal is also declining year by year. At the macro level, the state is also guiding the use of new and renewable energy. " Li Chaolin analyzed to the 21st century economic reporter that the "golden decade" after the reform and opening up has promoted multiple market entities to participate in the market competition of the energy industry, stimulated the market vitality, and the energy structure is also constantly adjusting. The proportion of new energy and renewable energy has also made the discourse power of the coal industry gradually shift from the production side to the consumption side.

New joint venture mode

After integration, how to achieve endogenous growth by optimizing the internal structure has become the primary problem for these industry giants.

Li Chaolin pointed out that energy saving is a trend of great progress in science and technology. As a coal enterprise, it must adapt to the development of economy, adapt to the progress of science and technology, and try to improve efficiency. "For example, Henan Shenhuo Group has basically achieved a balanced income and support by adjusting its industrial structure. In recent years, it has gradually turned to electrolytic aluminum, which has also made us more than one billion yuan in the first half of the year."

The practice of the newly established Jinneng holding group is to focus on coal, electric power, equipment manufacturing and other advantageous fields, integrate the internal advantageous resources, and focus on the development of coal industry, power industry and high-end intelligent equipment manufacturing industry. The establishment of Jinneng holding group means that the strategic restructuring framework of Shanxi's seven major coal enterprises has gradually taken shape.

In Shandong, the establishment of Shandong energy group is also regarded as a leader in driving the transformation of new and old kinetic energy in Shandong. "Based on coal, a traditional industrial raw material, new energy group has gradually become a consensus in the industry to vigorously develop high-end equipment manufacturing and new energy and new materials." Li Chaolin believes that there is still room for further integration and development of coal, electricity and renewable energy.

Taking the State Energy Group established by the merger of China Guodian group and Shenhua Group as an example, after the reorganization, China Shenhua's coal circuit port and shipping industry chain integration mode is fully integrated with the market advantages of Guodian group in the field of power generation, creating a new mode of joint development of coal and power. On August 10, 2020, with the operating revenue of US $80.498 billion, the State Energy Group ranked No.108 in the list of the world's top 500 in 2020 published by Fortune magazine, and ranked No.15 among the 48 listed central enterprises funded and supervised by the state owned assets supervision and Administration Commission of the State Council.

However, Li Chaolin also expressed his concern: "the coal power joint venture mode can indeed reduce the cost of enterprises, but at present, due to the large consumption, many power plants are not profitable. The barriers between different energy sectors are still not completely broken through. "

"This means that these enterprises in the coal industry, while combining their respective advantages, have to find other ways to stabilize the economy. Coal resource itself is not renewable, so it must face the problem of resource depletion. In a sense, we must find a way out as soon as possible. " Li added.