Baotailong plans to invest in the construction of a 2,000 Nm3/h fuel cell hydrogen project

What kind of company is Baotailong? ? ? ?

Baotailong New Materials Co., Ltd. was established in June 2003; it is a large-scale joint-stock enterprise that integrates new energy, nanomaterials, coal-based petrochemicals, the chemical industry, power generation, heat supply, as well as coal mining and processing.

Baotailong, a company primarily engaged in coal chemical industry, released its third-quarter report. Benefiting from rising coke prices, the company saw a significant year-on-year increase in both revenue and net profit. According to the third-quarter report, Baotailong achieved operating revenue of 2.595 billion yuan in the first three quarters of this year, a year-on-year increase of 49.35% ； The net profit attributable to the parent company was 123 million yuan, representing a year-on-year increase of 809.01%. With a significant increase in performance, Baotailong attributes this mainly to the year-on-year rise in sales volumes of its products coke and briquette coal, as well as to the increase in the selling price of coke. The prices of the company’s main products rose by 43.51% compared to the same period last year, and by 22.64% since the beginning of the year. In addition, the price of raw coal used in Baotailong’s production process increased by 43.76% compared to the same period last year, and by 50.66% since the beginning of the year. Baotailong stated that the prices of raw coal and its main products are at historical highs, and there is uncertainty regarding market prices in the future. Founded in 2003, Baotailong was listed on the main board of the Shanghai Stock Exchange in 2011. Its controlling shareholder is Baotailong Group, a private enterprise based in Heilongjiang. Jiao Yun, born in 1956, is the founder and actual controller of the Baotailong Group. According to his public resume, Jiao Yun has worked in the coal mining industry for many years; he started as a coal miner at the Xinjian Coal Mine of the Qitaihe Mining Bureau in 1975, and in 1996 he became the manager of the Yinhe Coal Mine in Qitaihe City. Before 2004, the Yinhe Coal Mine in Qitaihe City was a collectively-owned enterprise and a subsidiary of the Ginkgo Coal Mine. In 2004, the Ginkgo Coal Mine was restructured, and the people of Boli County transferred the mine along with three other enterprises under its control, including the Galaxy Coal Mine, to eight individuals including worker Jiao Yun for 2.44 million yuan. These eight people established a shareholding cooperative enterprise named Boli County Ginkgo Coal Mine. Most of the eight shareholders of the Ginkgo Coal Mine, aside from Jiao Yun, are his relatives. After 2001, Jiao Yun founded the predecessor of Baotailong Group and served as its chairman; in his early years, he used the profits from investing in the Ginkgo Coal Mine to increase Baotailong’s capital. Originally a traditional coal chemical industry enterprise, Baotailong has now evolved into a large joint-stock enterprise engaged in five main business segments: new materials, coal-based clean energy, advanced carbon materials, coal chemistry, and urban public services. Reporters from Shell Finance learned that coal, being at the very beginning of Baotailong’s industrial chain, is the primary raw material upon which its various industrial processes depend. In the past, Baotailong relied mainly on imported coal for its needs; however, since 2016, due to the macro-control measures imposed on the coal industry, Baotailong’s plans to build its own coal mines were put on hold. In the past two years, Baotailong has relied on imported raw coal for its needs. However, according to the capacity replacement plan disclosed by the Heilongjiang Development and Reform Commission, the company is currently accelerating its efforts to engage in coal mining at the upstream stage. Baotailong previously disclosed that the eight coal mines owned by the company, including the Machang mining area and the Dayan Coal Mine in Baoqing County, have all obtained mining licenses. The total resource reserves amount to 511.1086 million tons, with an overall annual production capacity of 4.65 million tons. Once operational, these mines will be able to supply some of the raw materials needed for the company’s coal chemical products, thereby reducing raw material costs. In September of this year, Baotailong announced a private placement plan worth 1.506 billion yuan; it plans to use 1.350 billion yuan of the funds raised for investing in the construction of coal mines, while allocating 156 million yuan to replenish working capital. Baotailong states that expanding into the upstream part of the industrial chain, with the goal of eventually replacing most of the coal purchased from external sources with coal sourced internally, is an important strategic direction for the company’s future development. On October 21, Bao Tailong’s secretary to the board told reporters from Beike Finance that the company plans to accelerate the construction of its 8 coal mines. Once all of them are completed, the annual production capacity of 4.65 million tons will ensure a steady supply of raw materials for the company, and this will constitute the main source of profit growth for the company in the future. Regarding the NDRC’s statement on October 19 that it would consider specific measures to intervene in coal prices, the company’s secretary to the board said that since the company obtains all of its raw coal from external sources, a decline in coal prices is beneficial for the company in the short term; however, the impact on profits will depend on changes in the prices of the company’s main products.