China Shenhua Energy, the listed unit of the mainland's largest coal producer Shenhua Group, saw its share price fall after it predicted small production and sales growth this year despite posting an annual result that was in line with market expectations.
The company is aiming for a 2.8 per cent rise in production volume to 289.9 million tonnes and for sales to grow 6 per cent to 410.5 million tonnes. This contrasts with last year's output growth of 14.8 per cent and a sales rise of 23.7 per cent.
Sanford Bernstein senior analyst Michael Parker said the growth drop-off looked odd, given the firm had made a hefty gross profit margin of 73 per cent from its own mines.
'Instead of guiding production growth down, why isn't Shenhua doing everything it can to produce as much coal as it can?' he wrote in a research note. 'Where does the growth come from [this] year?'
China Shenhua chairman Zhang Xiwu played down the issue, saying targets would likely be overshot.
'Based on figures from this year's first two months, we believe we can achieve 300 million tonnes of output and 425 million tonnes of sales for the full year,' he said. This represents an output growth rate of 6.4 per cent and sales growth rate of 9.7 per cent.
