China Shenhua Energy (01088) plans to spend approximately RMB 618 million to acquire a 50% equity stake in a coal-to-gas company.

China Shenhua Energy (01088) announced that on October 23, 2026, the board of directors reviewed and approved this acquisition. Pursuant to the Equity Transfer Agreement, the company's wholly-owned subsidiary Xinjiang Energy intends to acquire, for a cash consideration of approximately RMB 618 million, a 50% equity interest in the coal-to-gas company held by Western Energy. Upon completion of this acquisition, Xinjiang Energy will hold 100% equity interest in the coal-to-gas company, which will become an indirectly wholly-owned subsidiary of the company and be included in the scope of the company's consolidated financial statements. It is understood that the coal-to-gas company is primarily responsible for the investment, development, construction, and operation of the Zhundong 2 billion cubic meters/year coal-to-gas project. The project is located in the Xiheishan Industrial Park of the Zhundong Economic and Technological Development Zone in Xinjiang, with Phase I involving the construction of a 2 billion cubic meters/year coal-to-gas production line. The total estimated investment of the project is RMB 15.077 billion. Construction commenced in October 2025, with feed-in and trial operation planned for the end of 2027. As of the end of March 2026, cumulative investment completed amounted to RMB 1.775 billion. Given that the raw coal and fuel coal required by the coal-to-gas company are mainly supplied by Xinjiang Energy's Hongshaquan Coal Mine, this acquisition is conducive to further deepening the industrial synergy of the group's coal chemical business, optimizing the layout of the coal chemical industry, and strengthening the integrated operating structure. In addition, this acquisition helps reduce the ongoing coal supply connected transactions between the group and China Energy Investment Corporation.