A：Against a complex external backdrop in the first half of 2026, Xuyang Group maintained steady growth, posting a 36% year-on-year increase in net profit attributable to shareholders and achieving consistent improvements in operating performance. Cumulative trading volume reached 4 billion shares, up 2% year on year. The Group’s entire management team and all employees extend our sincere gratitude for your continued support and look forward to jointly witnessing the growth and transformation of China Xuyang. The Group is further expanding its production capacity, including 58 chemical processing lines and 14 coking lines, and by year-end will have achieved an integrated enrichment materials capacity of 300,000 tons and a silicon-carbon materials capacity of 500 tons. Through refined management and precise coordination, the average product price and price spread have been enhanced, further solidifying the company’s position as an industry leader. Furthermore, the Group’s independently developed world-largest 5,000‑ton‑per‑year amino‑alcohol‑olefin materials project has been successfully commissioned and has obtained EU product certification, with its application scope continuing to expand.

A：The core operating performance of Xuyang Group was bolstered in the first half of the year by rising coke prices and an improved outlook in the chemical industry, resulting in revenue of RMB 21.86 billion and net profit of RMB 240 million, a year-on-year increase of 485%. In terms of its medium- to long-term development strategy, the company continues to strengthen the foundation of its chemical business, while its new-energy segment maintains robust growth momentum. At the same time, it is proactively expanding into the negative-electrode materials and hydrogen‑energy sectors to enhance the Group’s resource integration and industrial synergy advantages.

A：The chemical business segment maintains its leading position in scale, with year-on-year revenue growth of 4.2% and a gross profit contribution of RMB 950 million, up 41.2%. The coke segment benefited from rising prices, with the unit price per ton increasing by 11% year on year, driving a 9.6% increase in revenue. The new-energy sector continues to grow amid robust market conditions, with production of key materials reaching 39,000 tons, a significant year-on-year increase. Total revenue amounted to RMB 523 million, up 123% year on year.

A：At the capital markets level, Xuyang Group’s stock trading volume increased significantly by 283% year on year, the proportion of shares held via Stock Connect rose markedly, and both market attention and liquidity achieved a substantial leap. The company has rigorously honored its commitments, having distributed six dividends totaling HK$4.03 billion, and continues to repurchase and increase its holdings, underscoring its confidence in the company’s long-term value.

A：In the coke business segment, global coking capacity is expected to see a net reduction of 6.08 million tonnes in the first half of 2026, primarily driven by capacity cuts at independent coking plants. Meanwhile, China’s coking industry is advancing industrial upgrading through ultra-low emission retrofits, yet the overall task remains formidable. As the restructuring progresses, the capacity landscape of the coking industry will undergo significant changes, and in the long term, coking coal prices are expected to trend upward in a volatile manner from their current lows.

A：The primary objective is to ensure supply-chain resilience, safeguard energy security, and enhance profitability by improving logistics efficiency. In particular in the Xinjiang region, where logistics costs are high and exhibit structural characteristics, developing counter-cyclical shipping capacity helps to bolster infrastructure development, reduce the cost of coal used for internal consumption, and optimize operational management. It also facilitates coal sales through collaboration among steel plants and expands international trade.

A：In the first half of this year, trade volume reached 6.57 million tons, generating profits exceeding RMB 50 million.

A：In the first half of the year, the company signed strategic cooperation agreements with various headquarters, achieving a railway freight volume of approximately 19 million tons. Furthermore, the total length of the dedicated railway lines for six subsidiaries of the Joyoung Group has reached 61 kilometers, allowing them to benefit from preferential policies and rates, with discounts ranging from 9% to 30%.

A：The new‑energy lithium‑battery industry is experiencing rapid growth, driven by strong demand from the electric‑vehicle and energy‑storage markets. Global lithium‑battery demand is projected to reach 3.2TWh in 2026 and further expand to 7.8TWh by 2030. The anode material industry has benefited from the growth in demand for lithium batteries, which is expected to reach 8.5 million tons in 2030, and the compound growth rate from 2025 to 2030 will remain above 23%.

A：In the first half of the year, the negative electrode materials segment posted a profit. Xiangfu New Energy achieved full-year profitability, with net profit—excluding the impact of share-based compensation—down 67% year on year, while its scale‑adjusted net assets increased by 368% year on year. In the first half of the year, negative electrode material production reached 42,000 tonnes, with sales totaling 39,000 tonnes, up 64% and 68% year on year, respectively. The newly built 200,000-ton integrated anode material project, along with its supporting green‑power facility, boasts industry‑leading designs in production line engineering and logistics‑transportation, which will further reduce costs and enhance overall competitiveness.

A：Although the hydrogen energy sector faces challenges such as a decline in the production and sales of fuel cell vehicles, it remained profitable in the first half of the year, demonstrating strong operational and technological resilience. The five-ton-per-day hydrogen energy demonstration project in Dingzhou has been put into operation, with the goal of becoming the country’s first integrated demonstration project for liquid hydrogen production, storage, transportation, refueling, and utilization. In the second half of the year, we will continue to deepen our focus on the hydrogen energy sector and advance its development in a steady and orderly manner.

A：The competitive edge of our methanol products lies in their significant cost advantage; compared with both coal-to-methanol and natural-gas-to-methanol, we are less affected by fluctuations in raw material prices. The sustained high levels of product prices are directly reflected in strong revenues and robust returns, with profits readily apparent.

A：We maintain a limited network of futures delivery warehouses in Hebei Province and the northern region, while also having established positions on both the futures and capital markets fronts. In July, we commenced methanol exports. Due to government policy adjustments and geopolitical factors, the supply‑demand balance is unlikely to improve significantly in the short term, leaving prices under control.

A：After several years of high profitability, the ammonia‑synthesis industry has had a ripple effect throughout the entire supply chain. In the second half of this year and next year, we expect exports of synthetic ammonia to increase steadily. At the same time, we will ramp up investment in areas such as supply-chain certification, carbon-reduction and low-carbon certifications, and the production of specialty asphalt.

A：The Group has established a presence across multiple chemical product segments. For example, rising raw material costs along the phthalic anhydride supply chain have boosted margins in the industrial‑grade phthalic anhydride sector, while lower costs and a tight supply‑demand balance are benefiting the downstream styrene industry. In addition, we are actively advancing technological upgrading projects to enhance efficiency and exploring new energy opportunities, with particularly significant investments and development in the hydrogen‑energy sector.

A：The Group has an extensive layout in the aromatics product line, with the world's largest production capacity and cost advantages. In the future, with the growth of downstream demand and cost control, it is expected that profitability will continue to be stable, especially in extreme cases, the cost self-sufficiency rate can reach a high level.

A：The Group’s full-year revenue target is 1.8 million tons, with the potential to exceed 2 million tons; export volumes have reached a record high, expected to total approximately 700,000 tons. Going forward, the company will focus on five key areas—its core coking business, new chemical materials, the new‑energy sector, data governance, and environmental protection—to drive its transformation into a service‑oriented enterprise with an innovative manufacturing base. In the coking and chemical sectors, it will continue to upgrade production capacity, strengthen its market influence, and extend the industrial chain, while placing equal emphasis on digital transformation, green and environmentally friendly practices, and the development of innovative manufacturing capabilities.

A：This year, in the caprolactam business, our primary focus is on market expansion and product sales. Although no specific details were provided on customer acquisition, it was noted that the industry as a whole has stabilized after experiencing production cuts and price volatility. If operating at full capacity, the caprolactam project is expected to generate a certain level of profit; however, the specific figures were not explicitly disclosed during the discussion.

A：At present, the Group’s asset-liability ratio remains relatively stable and has not increased significantly. Although bank loans have increased, structural adjustments have lowered interest rates and reduced short-term liabilities, keeping the overall debt-to‑asset ratio at a relatively low level. The future goal is to further reduce the asset–liability ratio over the next three to five years through sustained investment and structural optimization.

A：On the capital expenditure front, the figure for the first half of this year stood between RMB 1.2 billion and RMB 1.9 billion, a decrease of approximately RMB 300 million compared with the same period last year. In the second half of the year, we expect to invest an additional approximately RMB 2 billion, of which RMB 1.46 billion has already been committed. Key investments include the new-energy sector, with new-energy investments—calculated on a listed-company basis—approaching RMB 1 billion. In addition, the discussion touched upon projects such as technological upgrading and the development of new processes and products, as well as the optimization and adjustment of the asset–liability ratio.

A：The Cangzhou park is currently undertaking renovations to implement environmentally friendly projects, such as converting the oxidation process to a hydration process. Upon completion, these upgrades are expected to significantly enhance profitability. At present, the Jilin project within the Cangzhou industrial park is being operated with the most stringent cost-control measures in place, and there are plans to expand its capacity to a 400,000‑ton integrated Jilin‑line facility.

A：The company employs a flexible strategy for managing its chemical inventories and exports, adjusting stock levels based on feedstock price differentials, market assessments, and other factors, with the aim of maintaining raw material inventories—such as coal and gasification products—for more than 30 days. In inventory management, the company leverages customer advance payments to balance the supply chain and ensure safe, stable operations. In the face of market price volatility, the company will promptly adjust its raw-material procurement and product-sales strategies to maintain stable profitability.

A：In the first and second quarters, by optimizing inventory management, the company generated profits exceeding the marketing department’s total bonus pool for the entire previous year, primarily attributable to improvements in procurement‑sales‑inventory operations and an expanded price spread. In the first half of the year, export volume totaled approximately 350,000 tons. Export prices were roughly RMB 1,000 per ton higher than domestic sales, with the premium potentially reaching as high as RMB 2,000 per ton. In addition, the company has benefited from certain tax‑relief measures on the export side; for instance, certain products exported to Brazil qualify for the lowest applicable tariff rate. Moreover, through effective communication with Brazil’s Ministry of Industry, Foreign Trade and Services and the professional management of its import‑export team, the company has successfully reduced its tax and duty burden.

A：The company aims to achieve a full-year sales target of 660,000 tons, which would be the highest level on record. At present, our products have been exported to neighboring regions including Northeast Asia, Japan, South Korea, and Taiwan, and we are also exploring the export of certain chemical products to Europe in solid form. However, due to rising freight rates and challenges in maritime and container shipping, the cost of long-distance transportation has increased.

A：Newly commissioned projects have reached full production between May and the end of July, with gross margins expected to be approximately RMB 1,000 to 1,100 per tonne. In August, we will carry out routine maintenance on the parking equipment and implement process adjustments. Following these adjustments, product quality is expected to improve further, and energy consumption is anticipated to decrease as well. In addition, the Yuncheng industrial park has planned a new 200,000-ton‑per‑year project and has reserved coal‑use and coal‑to‑hydrogen quotas, with the aim of achieving its targeted production capacity and profitability in the future.

A：Leveraging 31 years of experience in coking and chemical‑industry management, the company has adopted a vertically integrated development model, cultivating core competencies and competitive advantages across sales, operations, production, and R&D. In the field of new materials, Binhai Energy leverages its independently developed asphalt and activated carbon, ensuring a plentiful, stable supply at a significant cost advantage, which helps to expand the market application of its silicon–carbon materials. Meanwhile, by leveraging the chemical industry’s expertise and advanced management practices at Binhai Energy, the company is strengthening synergistic collaboration between the two entities in R&D, manufacturing, sales, and other areas, thereby further enhancing Binhai Energy’s core competitiveness.

A：We have acquired a 44.5% stake and purchased an additional 5% to 6% on the market, bringing our current holding to 69.5%, with an additional 9.32% under control. Going forward, we will engage with regulatory authorities to explore the possibility of further increasing our equity stake and leverage the power of the capital markets to enable the battery company to deliver high-quality, stable anode materials.

A：In the context of the broader chemical industry, the company’s anode-materials business has garnered strong endorsement from numerous leading corporations. We seconded front-line employees from the Coking Company to the Focused Finance Company, successfully transforming the previously dirty, chaotic, and poorly managed plant into a clean, integrated facility, and engaged in exchanges and knowledge-sharing with numerous private equity firms and analysts. Recently, the company organized a group visit to the Shangdu District industrial park, where the green‑energy project’s operational performance was demonstrated to be excellent.

A：Within our R&D department, we are exploring the possibility of building a production line with an annual capacity of 60,000 to 100,000 tons; the specific project is still under development. For specific data on the industrial chain and future outlook, please stay tuned for further updates, including our field visit to Shandong and the high-carbon project within 1907.

A：In response to fluctuations in market prices, particularly the impact of the rising share of Mongolian coal, we have implemented a series of measures in cost control and structural adjustment to reduce operating costs and maintain our competitive edge. As for the gradual phase-out of coking capacity, there is indeed a global trend of aging coke ovens being retired due to economic and environmental considerations. At the same time, new coking capacity is undergoing structural shifts worldwide, as evidenced by the rising export volumes of Indonesian coke. For the company, we need to flexibly adjust our sales strategy, with a focus on achieving a balanced development between emerging and traditional markets.

A：In response to the exit of coking coal capacity from the international market and shifts in trade patterns, we are, on the one hand, increasing our procurement of imported coal to ensure both supply quality and cost-effectiveness; on the other hand, we are proactively expanding our presence in emerging markets such as Indonesia and closely monitoring international coking coal price trends. In response to adjustments in domestic and international coal‑mine production‑restriction policies and shifts in coking‑coal demand, we are refining our procurement strategy to ensure a stable supply of raw materials while reducing costs. At the same time, we will increase investment and supporting measures in the chemical sector to enhance overall profitability.

A：Our chemical industrial parks, such as those in Tangshan, Cangzhou, Dongming, Yuncheng, and Jiaohua, are characterized by the integration of diverse chemical production processes, including coking and synthetic ammonia. The differences among these parks primarily lie in their choices of chemical technologies, raw material costs, and strategies for maximizing economic returns.

A：Following the commissioning and subsequent revamp of the ammonia synthesis unit, we have commenced supplying town gas to the surrounding area. At present, the price of gas sold within the industrial park already enjoys a competitive edge over that in other parks.

A：At present, methanol is being sold at RMB 2,900 per tonne, but there remains significant room for further price appreciation. The next step is to fully leverage methanol to further produce hydrogen, while optimizing operations to maximize the added value of chemical products.

A：When comparing coking and chemical processes, we not only consider the price differential but also place greater emphasis on cost levels and the speed of return on investment. For example, by optimizing processes, coal ash and slag can be efficiently recycled and utilized between coking and chemical industrial parks, while also exploring the use of sulfuric acid as a byproduct to enhance economic returns.

A：Although rising prices of coke and coal have boosted industry-wide profits, our region’s profitability remains above the sector average. Cost advantages are realized through an efficient operating model, accurate market forecasting, coal‑blending technologies, and robust cost control. At the same time, by strengthening collaboration with strategic customers, the company enhances brand premium and reputation, thereby sustaining stable profitability.

A：We reduce costs by advancing intelligent manufacturing, optimizing supply chain management, and enhancing logistics efficiency, and we are committed to cutting expenses on a monthly basis. Furthermore, maintaining a strong reputation with customers, ensuring timely fund availability, and leveraging existing brand influence to expand market share are all crucial strategies for sustaining a cost advantage.

A：The existing methanol plant in Yuncheng is not yet operating at full capacity and is currently conducting an assessment of its 50,000-ton capacity. Plans are underway to evaluate whether a production scale of 70,000 or 100,000 tons would be more advantageous. The product has undergone validation in select applications and is now being ramped up for volume production. Methanol production costs enjoy a cost advantage of approximately RMB 300 per tonne over market prices.

A：The efficiency of the company’s management model and the sophistication of its supply chain are key drivers of scale expansion. At present, the company has established a comprehensive supply chain management system, leverages big data for precise coal blending, and has built a database that covers more than 2,000 coal mines both domestically and internationally. The company’s future market and regional objectives have not yet been clearly defined; however, it is continuously optimizing resource allocation, enhancing its level of intelligent manufacturing, and striving to build a green supply chain while solidifying its industry-leading position.

A：We are backed by a robust in-house team, including R&D, smart manufacturing, engineering, finance, management, and marketing teams, all of which can provide online support and enablement. This enables operating‑managed enterprises to better anticipate market trends, adjust their inventory strategies, and achieve substantial returns.

A：In operational outsourcing, our robust quality assurance and strong brand reputation give us a competitive edge, enabling us to unlock greater opportunities for projects. These comprehensive capabilities and advantages enable us to achieve excellent results in operations and asset management.

A：Looking ahead, in the steel sector, we will prioritize consignment services and potential equity partnerships over greenfield project development. If suitable opportunities and returns materialize, we may take an equity stake, but the overall holding will be capped at around 20%, with the bulk of our business focused on operations and asset management services. We plan to achieve an overall operational scale of approximately 50 million tons around 2040 and will continue to advance this goal.

A：Not all of our enterprises offer managed services; we require a set of criteria for long-term collaboration. Our primary target customers are state-owned enterprises and integrated steel companies, and we are currently actively engaging with such firms to explore collaborative opportunities.

A：Whether in the coking, chemical, or new‑energy sectors, we have established both global and nationwide supply chain networks, with procurement and sales operations spanning markets across the globe and throughout China. This layout enables any factory hosting to effectively leverage the national supply chain network, reducing costs and enhancing efficiency.

A：Through our custody services, we can help clients reduce losses or increase profits and clearly quantify the specific cost savings achieved. For example, two additional trust‑management enterprises will be added in the near future, with the aim of reducing losses and increasing profits by optimizing their operations.

A：On the commercialization front, we are progressively expanding Ye Qing’s applications into civilian sectors, including the low‑altitude economy, autonomous heavy trucks, and aviation, and have already engaged in discussions with numerous aerospace, nighttime‑operation heavy‑truck, and industrial‑equipment companies, resulting in preliminary intentions to enter into cooperation agreements. In terms of storage and transportation, with the issuance of the Ministry of Transport’s new standards, we have successfully launched the first Yeqing–Cao vehicle‑haul service connecting Beijing, Tianjin, and Hebei, and will gradually extend this offering to a broader customer base.

A：The company’s hydrogen‑energy business boasts a cost advantage, driven by economies of scale and a flexible production model. As market demand expands and technology advances, investment scales and energy consumption will decrease, thereby further reducing costs and sustaining economic competitiveness.

A：International coking coal prices have been on an upward trend recently, primarily driven by rising domestic and global coal prices and the recovery of demand in international markets. Regarding the company’s production‑launch plan, we have successfully operated multiple projects and maintain a clear baseline for capacity expansion in Indonesia. Going forward, we will progressively ramp up production capacity in line with market conditions and policy developments.

A：Over the past few decades, coal sales have been predominantly based on short-term pricing, with limited consideration given to achieving a profit balance across the entire value chain from procurement to the point of sale. With regard to the procurement and sales of coke and coal, the company is actively seeking a long-term, stable supply chain and is progressively advancing reforms to the pricing mechanisms and practices for both coal and coke, with the aim of fully unlocking production capacity. Meanwhile, with regard to the 3.6-million-ton coking project and the 4.8-million-ton plan, the company will proceed with its subsequent investment initiatives only after ensuring that its existing capacity is fully profitable and operating stably.

A：The company plans to drive growth through the independent yet synergistic operation of five business segments, including coke, chemicals, new energy, mining, and green power. Each business segment has clearly defined investment and output projections to ensure stable operations across economic cycles. Specifically, the coke segment will be structured around a 20-million-ton capacity and entrusted‑management capabilities; the new‑energy sector will be vigorously expanded; and the mining business plans to increase investment in Indonesia, Shanxi, Inner Mongolia, and other regions. At the same time, the company will strengthen R&D, enhance synergy across the upstream and downstream value chain, and reinforce cash‑flow management and team building to maintain its competitive edge.

A：The company recognizes that the coking‑chemical industry is currently characterized by low profitability, while the new‑energy market remains in an expansion phase; accordingly, a strategic transformation is necessary to break through these challenges. In the coke chemical sector, the company will enhance profitability through refined management, improved efficiency, and cost reduction. In the new energy field, it will ramp up investment, leveraging its existing technological and market advantages, aligning with customer needs and industry trends to develop innovative, high-value‑added products and services, thereby driving business growth.

A：The company integrates manufacturing with service-oriented manufacturing, aligns its operations with market demand, and optimizes its supply and service chains to ensure stable deliveries and high-quality customer service. At the same time, the company will continue to strengthen R&D innovation, expand its R&D team, and accelerate both pilot-scale development and industrialization. It will launch a greater number of new projects and technologies with strong market competitiveness, such as DRI and AIP, while actively building unmanned factories and smart industrial parks to enhance automation and digitalization, thereby achieving its goal of transitioning from a traditional manufacturing enterprise to a technology-driven one.