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On March 7, Ningxia Baofeng Energy Group Co., Ltd. issued a announcement stating that it plans to use its subsidiary Inner Mongolia Baofeng Coal-based New Materials Co., Ltd. as the investment entity to build a 4×1000,000 tons per year olefin demonstration project in the Tuk Industrial Project Area of the Sulihe Economic Development Zone in Wushen Banner, Ordos City, Inner Mongolia Autonomous Region. The announcement states that the total investment in the project is 67.3 billion yuan, of which 62.5 billion yuan is allocated to construction costs (including value-added tax). The funds for the project come from 30% in the form of the company’s own capital, while 70% comes from bank loans or other financing methods, ensuring the smooth progress of the project’s construction. During the reporting period, Bank of Communications Co., Ltd. and the Inner Mongolia Branch of Industrial and Commercial Bank of China entered into Comprehensive Strategic Cooperation Agreements with the company, agreeing to provide credit lines of 20 billion yuan and 30 billion yuan respectively for the company’s project construction, resulting in a total credit line of 50 billion yuan. The project aims to be completed by 2023. It is understood that this project is one of the key demonstration projects among the four modern coal chemical industry demonstration zones outlined in the \"Plan for the Innovative Development of the Modern Coal Chemical Industry\" issued by the National Development and Reform Commission and the Ministry of Industry and Information Technology during the 13th Five-Year Plan period. The DMTO third-generation technology used in this project belongs to innovative technologies for the clean and efficient utilization of coal, and it falls under the category of technologies that are encouraged according to the \"Guidelines for Industrial Structure Adjustment (2019 version)\". According to the company’s interim financial report, it achieved revenue of 15.928 billion yuan in 2020, a year-on-year increase of 17.39% ； Net profit was 4.623 billion yuan, a year-on-year increase of 21.59% ； Basic earnings per share was 0.63 yuan, representing a year-on-year increase of 16.67%. In 2020, the projects funded through the company’s IPO were successfully implemented, which led to a significant increase in the production of polyethylene and polypropylene products. The company was able to meet its entire demand for methanol as a raw material for production, which played an important role in improving its financial performance. Currently, the company has a production capacity of 1.2 million tons per year for polyolefins, 4 million tons per year for methanol, and 780,000 tons per year for fine chemical products. Currently, the third-phase olefin project at the Ningdong facility has officially commenced construction, with completion and operation expected by 2022. Once fully operational, it will add an annual olefin production capacity of 1 million tons, further expanding the company’s production scale and reducing production costs. Baofeng Energy’s 4 million tons per year olefin project was approved under the 13th Five-Year Plan, and the first phase of the project has been authorized ； Furthermore, the company’s 4 million tons per year MTO project in Inner Mongolia is a model of modern coal chemical engineering in terms of technology, scale, and expected benefits. As a pioneer in China’s energy sector and a leader in high-end coal-based new materials, Baofeng Energy has launched a new development strategy centered on two hubs. It is working to improve the industrial chain at its Ningdong facility, establishing new production capacity in Inner Mongolia, and aiming for a 5-fold increase in its output. In June 2020, with the approval of the people’s government of Ordos City, Baofeng Energy’s 4×1000,000 tons/year olefins project was included in the \"Overall Plan for Establishing a Modern Coal Chemical Industry Demonstration Zone in Ordos City\" (Ordos Government Document No. [2020] 35). It is reported that this master plan (revised draft) has been approved by the Development and Reform Commission and the Industry and Information Technology Department of Inner Mongolia Autonomous Region, with a requirement that Baofeng Energy’s 4 million tons per year olefin project be completed by the end of 2023. This project is part of the 13th Five-Year Plan; the first phase, with an output of 2.6 million tons per year of olefins, has been approved (Document No. Wu Fa Gai Fa [2020] 105). At present, the environmental impact assessment for Baofeng Energy’s 4×1000,000 tons/year olefins demonstration project in Inner Mongolia is under review in accordance with the established procedures; the progress is expected to be faster than that of other similar projects, with completion anticipated ahead of schedule ； The preparatory work for project construction, such as geological surveys, the construction of temporary facilities, and the completion of the necessary infrastructure works, is progressing in an orderly manner; construction is expected to begin ahead of the original schedule. A responsible official from Baofeng Energy said that this project can actively promote local economic development and create job opportunities in the society. Upon completion of the project, it will further strengthen the company’s leading position in the coal-to-olefins industry, help enhance the company’s overall profitability, increase the benefits for its shareholders, and meet the requirements of maximizing the interests of both the company and its shareholders. It is also reported that, while implementing the new development strategy of having \"two centers,\" the company is also making significant efforts to promote the development of the hydrogen energy industry, thereby accelerating the transition from fossil fuels to renewable energy sources. The 200MWp solar power generation and 20,000 cubic meters per hour hydrogen production facility via water electrolysis, which was constructed in 2019 as part of a comprehensive demonstration project capable of producing 160 million cubic meters of green hydrogen per year, was completed and put into trial production in February 2021. Once all the projects are in operation, the company could become the first to achieve true carbon neutrality by using green hydrogen to replace fossil fuels. On January 11, 2021, the People’s Government of Ordos City approved the request submitted by the People’s Government of Wushen Banner regarding the use of the olefin-related capacity indicators specified in Ordos City’s overall plan for developing a modern coal chemical industry zone for the 1.4 million tons per year production phase of the second stage of Inner Mongolia Baofeng Coal-based New Materials Co., Ltd.’s 4×1000,000 tons per year coal-to-olefins demonstration project. At the end of January 2021, the dynamic compaction work for this project commenced. On January 18, 2021, Baofeng Energy stated on the interactive platform that the risk assessment for social stability related to the second phase of the project in Inner Mongolia had been completed and filed ； The project application report has been prepared, and the process for approving the project is underway in accordance with the established procedures. It is reported that on July 28, 2020, the 2.6 million tons per year production unit of Phase 1 of Baofeng Coal-Based New Materials Co., Ltd.’s 4×10 million tons per year coal-to-olefins demonstration project was approved by the Inner Mongolia Autonomous Region Development and Reform Commission. On December 18, 2020, the second public notice regarding the environmental impact assessment for the 4×1000,000 tons/year coal-to-olefins demonstration project of Inner Mongolia Baofeng Coal-based New Materials Co., Ltd. was released. On November 30, 2020, a public announcement was made regarding the social stability risk assessment for the 1.4 million tons per year production unit of Phase II of the 4×10 million tons per year coal-based olefins demonstration project operated by Inner Mongolia Baofeng Coal-based New Materials Co., Ltd.