China Shenhua Energy : FIRST QUARTERLY REPORT FOR THE YEAR 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the content of this announcement, make no representation to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the content of this announcement.

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 01088)

CHINA SHENHUA ENERGY COMPANY LIMITED FIRST QUARTERLY REPORT FOR THE YEAR 2021

Pursuant to the rules and regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange, China Shenhua Energy Company Limited is required to announce the quarterly report. This announcement is made pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

The board of directors (the "Board") of the Company hereby presents the results of the Group for the three months ended 31 March 2021 prepared in accordance with the IFRSs. Such results have not been audited or reviewed by the independent auditors.

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1. IMPORTANT NOTICE

1. The Board and the supervisory committee of the Company together with the directors, supervisors and the senior management of the Company warrant that the contents of the quarterly report are authentic, accurate and complete and do not contain any misrepresentation, misleading statement or material omission, and shall jointly and severally accept legal liability.
2. This report was considered and approved at the 7th meeting of the fifth session of the Board.
3. Wang Xiangxi, chairman of the Company, Xu Shancheng, Chief Financial Officer of the Company and Ban Jun, person-in-charge of the accounting department of the Company, warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report.
4. The financial statements in this report are prepared in accordance with IFRSs, but have not been audited. Please refer to section 2.2 of this report for the major differences between the financial statements prepared under IFRSs and those prepared under the China Accounting Standards for Business Enterprises.

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2. COMPANY PROFILE
2.1 Major financial data
	January to	January to	Percentage
	March 2021	March 2020	change
			%
Revenue (RMB million)	67,608	51,077	32.4
Profit before income tax	18,069	15,082	19.8
(RMB million)
Profit for the period (RMB million)	14,461	12,093	19.6
Profit attributable to equity holders	11,864	9,980	18.9
of the Company for the period
(RMB million)
Basic earnings per share	0.597	0.502	18.9
(RMB/share)
Net cash generated from operating	19,614	29,984	(34.6)
activities (RMB million)
Net cash per share generated from	0.99	1.51	(34.4)
operating activities (RMB/share)
Net cash generated from operating	19,614	15,473	26.8
activities excluding the effect of
Finance Company (RMB million)
Net cash per share generated from	0.99	0.78	26.9
operating activities excluding
the effect of Finance Company
(RMB/share)
	31 March	31 December	Percentage
	2021	2020	Change
			%
Total assets (RMB million )	588,494	562,904	4.5
Total liabilities (RMB million)	144,439	133,317	8.3
Total equity (RMB million)	444,055	429,587	3.4
Equity attributable to equity
holders of the Company (RMB	375,975	364,203	3.2
million)
Shareholders' equity per share	18.92	18.33	3.2

(RMB/share)

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2.2 Major differences of financial statements prepared under different accounting standards

			Unit: RMB million
	Net profit attributable	Net assets attributable
	to equity holders of the	to equity holders of the
	Company	Company
	January to	January to	31 March 31 December
Item	March 2021	March 2020	2021	2020
Under China Accounting	11,611	9,807	372,178	360,189
Standards for Business
Enterprises
Adjustment:
Simple production	253	173	3,797	4,014
maintenance,
production safety
and other related
expenditures
Under IFRSs	11,864	9,980	375,975	364,203

Explanation: Pursuant to the relevant regulations of the related government authorities in the PRC, the Group accrued provisions for simple production maintenance, production safety and other related expenditures. Under China Accounting Standards for Business Enterprises, such expenditures are recognised as expenses in profit or loss and separately recorded as a specific reserve in shareholders' equity. On utilisation of the specific reserve as fixed assets within the stipulated scope, the full amount of accumulated depreciation is recognised at the same time when the cost of the relevant assets is recorded. Under International Financial Reporting Standards, these expenses are recognised in profit or loss as and when incurred. Relevant capital expenditure is recognised as property, plant and equipment and depreciated according to the relevant depreciation method. The effect on deferred tax arising from such difference is also reflected.

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2.3 Major operational data
				January to	January to	Percentage
Operational indicators	Unit	March 2021	March 2020	change
						%
(I)	Coal
	1.	Commercial coal production	Million tonnes	78.0	74.4	4.8
	2.	Coal sales	Million tonnes	115.4	98.4	17.3
(II)	Transportation
	1.	Turnover of self-owned railway	Billion tonne km	73.8	65.4	12.8
	2.	Loading volume at Huanghua
		Port	Million tonnes	55.1	44.8	23.0
	3.	Loading volume at Shenhua
		Tianjin Coal Dock	Million tonnes	10.9	10.8	0.9
	4.	Shipment volume	Million tonnes	30.2	22.9	31.9
	5.	Shipment turnover	Billion tonne nm	25.3	18.3	38.3
(III)	Power generation
	1.	Gross power generation	Billion kWh	37.18	27.46	35.4
	2.	Total power output dispatch	Billion kWh	34.88	25.71	35.7
(IV)	Coal chemical
	1.	Sales of polyethylene	Thousand tonnes	94.8	89.0	6.5
	2.	Sales of polypropylene	Thousand tonnes	89.7	80.9	10.9

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2.4 Total number of shareholders and shareholding of top ten shareholders and top ten holders of tradable shares (or shares not subject to selling restrictions) at the end of the reporting period

					Unit: shares
Total number of shareholders (accounts)				195,266
Including: Holders of A shares (including China Energy)		193,235
Registered holders of H shares				2,031
	Shareholding of top ten shareholders
			Number
	Number of		of shares	Shares pledged or frozen
	shares held at		held subject
	the end of		to selling	Status of		Nature of
Name of shareholder (in full)	the period	Percentage	restrictions	shares	Number	shareholder
		%
China Energy Investment Corporation	13,812,709,196	69.52	0	Nil	N/A	State-owned
Limited						corporation
HKSCC NOMINEES LIMITED	3,369,277,435	16.96	0	Unknown	N/A	Overseas
						corporation
China Securities Finance Corporation	594,718,004	2.99	0	Nil	N/A	Others
Limited
Hong Kong Securities Clearing Company	165,218,447	0.83	0	Nil	N/A	Overseas
Limited						corporation
Central Huijin Asset Management Ltd.	110,027,300	0.55	0	Nil	N/A	State-owned
						corporation
Shanghai Pudong Development Bank Co	82,115,411	0.41	0	Nil	N/A	Others
Ltd - Guangfa High-end Manufacturing
Stock-type Securities Investment Funds
(上海浦東發展銀行股份有限公司－
廣發高端製造股票型發起式證券
投資基金)
Industrial Bank Co., Ltd. - AIFMC New	67,636,276	0.34	0	Nil	N/A	Others
Vision Flexible Allocation and Regularly
Open Hybrid Initiating Securities
Investment Fund (興業銀行股份有限
公司－興全新視野靈活配置定期
開放混合型發起式證券投資基金)
Industrial Bank Co., Ltd. - Guangfa	27,383,486	0.14	0	Nil	N/A	Others
Xingcheng Mixed Securities Investment

Funds (興業銀行股份有限公司－廣 發興誠混合型證券投資基金)

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Name of shareholder (in full)

Zhuhai Ruifeng Huibang Asset Management Co., Ltd. - Ruifeng

Huibang No.3 Privately Offered Fund (珠 海市瑞豐匯邦資產管理有限公司－ 瑞豐匯邦三號私募證券投資基金)

Industrial and Commercial Bank of China Limited - Guangfa Shuangqing Upgrade

Mixed Securities Investment Funds (中 國工商銀行股份有限公司－廣發 雙擎升級混合型證券投資基金)

Shareholding of top ten shareholders
		Number
Number of		of shares	Shares pledged or frozen
shares held at		held subject
the end of		to selling	Status of		Nature of
the period	Percentage	restrictions	shares	Number	shareholder
	%
22,233,848	0.11	0	Nil	N/A	Others

20,999,945

0.11

0 Nil

N/A Others

Shareholdings of top ten shareholders without selling restrictions
	Number of shares
	without selling	Type and number of shares
Name of shareholder	restrictions	Type	Number
China Energy Investment Corporation Limited	13,812,709,196	RMB ordinary shares	13,812,709,196
HKSCC NOMINEES LIMITED	3,369,277,435	Overseas-listed foreign	3,369,277,435
		shares
China Securities Finance Corporation Limited	594,718,004	RMB ordinary shares	594,718,004
Hong Kong Securities Clearing Company Limited	165,218,447	RMB ordinary shares	165,218,447
Central Huijin Asset Management Ltd.	110,027,300	RMB ordinary shares	110,027,300
Shanghai Pudong Development Bank Co., Ltd. -	82,115,411	RMB ordinary shares	82,115,411
Guangfa High-end Manufacturing Stock-type
Securities Investment Funds (上海浦東發展
銀行股份有限公司－廣發高端製造股票
型發起式證券投資基金)
Industrial Bank Co., Ltd. - AIFMC New Vision	67,636,276	RMB ordinary shares	67,636,276
Flexible Allocation and Regularly Open Hybrid
Initiating Securities Investment Fund (興業銀
行股份有限公司－興全新視野靈活配置
定期開放混合型發起式證券投資基金)
Industrial Bank Co., Ltd. - Guangfa Xingcheng	27,383,486	RMB ordinary shares	27,383,486
Mixed Securities Investment Funds (興業銀行
股份有限公司－廣發興誠混合型證券投
資基金)

- 7 -

	Shareholdings of top ten shareholders without selling restrictions
	Number of shares
	without selling	Type and number of shares
Name of shareholder	restrictions	Type	Number

Zhuhai Ruifeng Huibang Asset Management Co.,

Ltd. - Ruifeng Huibang No.3 Privately Offered Fund (珠海市瑞豐匯邦資產管理有限公司－ 瑞豐匯邦三號私募證券投資基金)

Industrial and Commercial Bank of China

Limited - Guangfa Shuangqing Upgrade Mixed Securities Investment Funds (中國工商銀行 股份有限公司－廣發雙擎升級混合型證 券投資基金)

Details regarding the connected relationships among the above shareholders or whether they are parties acting in concert

Details regarding the holders of preference shares with voting rights restored and the number of shares held

22,233,848

RMB ordinary shares

22,233,848

20,999,945

RMB ordinary shares

20,999,945

Both of HKSCC NOMINEES LIMITED and Hong Kong Securities Clearing Company Limited are wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited. The trustee bank of Industrial Bank Co., Ltd. - AIFMC New Vision Flexible Allocation and Regularly Open Hybrid Initiating Securities Investment Fund and Industrial Bank Co., Ltd.

• Guangfa Xingcheng Mixed Securities Investment Funds is Industrial Bank Co., Ltd.. Saved as disclosed above, the Company is not aware of any connected relationships between the top ten shareholders without selling restrictions and the top ten shareholders, and whether they are parties acting in concert as defined in the Measures for Administration of Acquisition of Listed Companies.

N/A

Note: H Shares held by HKSCC NOMINEES LIMITED are held on behalf of a number of its clients. and A Shares held by Hong Kong Securities Clearing Company Limited are held on behalf of a number of its clients.

2.5 Total number of holders of preference shares, and shareholdings of the top ten holders of preference shares and top ten holders of preference shares not subject to selling restrictions as at the end of the reporting period

Applicable

✓ Not applicable

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3. SIGNIFICANT EVENTS

1. Change in the consolidation scope of financial statements
   Shenhua Shendong Power Co., Ltd., a subsidiary of the Company, transferred 100% equity of China Energy Shaanxi Fuping Thermal Power Co., Ltd. ("Fuping Thermal Power") to China Energy Guoyuan Power Co., Ltd.. The equity transfer was completed on 7 January 2021, and Fuping Thermal Power was no longer included in the scope of the consolidated financial statements of the Company.
2. Material changes in major items of financial statements of the Company and underlying reasons
   From January to March 2021, the revenue of the Group under the IFRSs was RMB67,608 million (for the corresponding period in 2020: RMB51,077 million), representing a year-on-year increase of 32.4%. Profit before income tax was RMB18,069 million (for the corresponding period in 2020: RMB15,082 million), representing a year-on-year increase of 19.8%. The profit attributable to equity holders of the Company for the period was RMB11,864 million (for the corresponding period in 2020: RMB9,980 million), representing a year-on-year increase of 18.9%.
   Changes in major accounting items of the consolidated financial statements for the reporting period and explanations are set out below:

					Unit: RMB million
	Items of consolidated
	statement of profit
	or loss and other	January to	January to	Percentage
No.	comprehensive income	March 2021	March 2020	Change	Major reasons for changes
				%
1	Revenue	67,608	51,077	32.4	Year-on-year increase in major
					business volume such as coal
					sales volume and power output
					dispatch; increase in average
					selling price of coal
2	Cost of sales	(48,435)	(34,511)	40.3	Year-on-year increase in major
					business volume such as

coal sales volume and power output dispatch; increase in the proportion of sales and purchase price of purchased coal

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					Unit: RMB million
	Items of consolidated
	statement of profit
	or loss and other	January to	January to	Percentage
No.	comprehensive income	March 2021	March 2020	Change	Major reasons for changes
				%
3	Research and development	(144)	(91)	58.2	Increase in the R&D expenditure of
	costs				smart mine projects of the Group
4	Other gains and losses	42	470	(91.1)	The interest income generated from
					the recovery of certain bank
					wealth management products
					of the Company upon expiry in
					the same period last year, and
					the income generated from the
					interbank deposit certificates of
					Finance Company
5	Loss allowances, net of	4	98	(95.9)	Reversal of allowance for loan
	reversal				losses from Finance Company for
					the same period last year
6	Other expenses	(78)	(8)	875.0	The year-on-year increase in
					inventory scrap losses and
					donation expenses
7	Interest income	561	388	44.6	The deconsolidation of Finance
					Company's financial statements,
					and the interest income generated
					by the deposits of the Group in
					the Finance Company is no longer
					offset
8	Finance costs	(566)	(957)	(40.9)	Year-on-year decrease in average
					loan balance and loan interest rate
9	Share of results of	766	304	152.0	Year-on-year increase in the
	associates				Company's investment income
					in Beijing Guodian, Finance
					Company and other associates
10	Income tax expense	(3,608)	(2,989)	20.7	Increase in profit before tax during
					the reporting period

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					Unit: RMB million
	Items of consolidated	As at	As at
	statement of financial	31 March	31 December	Percentage
No.	position	2021	2020	change	Major reasons for changes
				%
1	Inventories	16,471	12,750	29.2	Increase in coal inventory
2	Accounts and bills	14,419	11,759	22.6	The intensified efforts of the

	receivables			Group on collection of accounts
				receivables and a relatively low
				base of account receivables at
				the end of the previous year,
				and the increase in receivables
				for coal sales and receivables
				for electricity sales during the
				reporting period
3	Prepaid expenses and other	21,938	17,480	25.5 Increase in prepayments for coal and
	current assets			material purchases; prepayment
				of resource taxes by part of coal
				companies of the Group
4	Cash and cash equivalents	129,099	112,880	14.4 Increase in net cash generated from
				operating activities
5	Assets classified as held for	8	2,783	(99.7) The completion of equity transfer of
	sale			Fuping Thermal Power
6	Short-term borrowings	6,707	8,847	(24.2) Repayments of certain short-term
				borrowings upon maturity
7	Accrued expenses and other	26,748	18,949	41.2 Increase in accrued expenses for
	payables			certain subsidiaries
8	Income tax payable	4,577	6,313	(27.5) The provision of corporate income
				tax at the rate of 25% by certain
				branches and subsidiaries at
				the end of 2020 that have been
				entitled to 15% of the preferential
				income tax rate of western
				development; the payment of
				such tax by relevant branches and
				subsidiaries during the reporting
				period
9	Contract liabilities	7,112	5,256	35.3 Increase in advance coal payments
				due to the increase in coal sales

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					Unit: RMB million
	Items of consolidated	As at	As at
	statement of financial	31 March	31 December	Percentage
No.	position	2021	2020	change	Major reasons for changes
				%
10	Liabilities associated with	0	217	(100.0) The completion of equity transfer of
	assets classified as held				Fuping Thermal Power
	for sale
11	Long-term liabilities	5,944	2,661	123.4	The recognition of long-term
					payables for mining rights after
					reassessment of the mining rights
					of certain mines
					Unit: RMB million
	Items of the consolidated	January to	January to	Percentage
No.	statement of cash flows	March 2021	March 2020	change	Major reasons for changes
				%
1	Net cash generated from	19,614	29,984	(34.6) After excluding the impact of
	operating activities				Finance Company's financial
					statement in the same period last
					year, the net cash generated from
					operating activities increased
					year on year, mainly due to the
					increase in cash inflow resulting
					from the growth of operating
					profits
	Of which: Net cash	/	14,511	/
	Generated from operating
	activities of Finance
	Company Note
	Net cash generated From	19,614	15,473	26.8
	operating Activities

excluding the effect of Finance Company

- 12 -

	Items of the consolidated	January to	January to	Percentage
No.	statement of cash flows	March 2021	March 2020	change Major reasons for changes
				%
2	Net cash generated from	838	14,779	(94.3) The recovery of certain bank wealth
	investing activities			management products of the
				Group upon expiry in the same
				period last year
3	Net cash used in financing	(2,067)	(5,625)	(63.3) The decrease in debt repayment
	activities			during the reporting period as
				compared with the same period of
				last year

Note: From January to August 2020, except for services within the Group, Finance Company provides financial services, including deposits and loans, to other entities apart from the Group. This item represents the cash flow of deposits and loans, interests, fees and commissions generated from this business. On 1 September 2020, the capital increase transaction of the Finance Company was completed and the direct and indirect shareholding ratio of the Company in the Finance Company fell to 40%, and the Finance Company was no longer included in the scope of the consolidated statements of the Company.

3.3 Operation of the coal segment

3.3.1Coal sales

(1) By contract pricing mechanisms

			January to March 2021	January to March 2020	Changes
				Proportion	Price		Proportion	Price		Price
			Sales	of total	(exclusive	Sales	of total	(exclusive		(excluding
			volume	sales	of tax)	volume	sales	of tax)	Sales	tax)
			Million		RMB/	Million		RMB/
			tonnes	%	tonne	tonnes	%	tonne	%	%
I.	Sales through Guoneng Sales	110.1	95.4	487	94.9	96.4	416	16.0	17.1
		Group Limited
	1.	Annual long-term	49.1	42.5	402	40.4	41.0	398	21.5	1.0
		contracts
	2.	Monthly long-term	47.4	41.1	575	41.9	42.6	425	13.1	35.3
		contracts
	3.	Spot commodity	13.6	11.8	484	12.6	12.8	446	7.9	8.5
II.	Direct sales in coal mines	5.3	4.6	234	3.5	3.6	199	51.4	17.6
Total sales volume/average Price	115.4	100.0	475	98.4	100.0	409	17.3	16.1
	(exclusive of tax)

Note: Sales prices of coal in this report are all exclusive of tax. Similarly hereinafter.

- 13 -

From January to March 2021, the average price of coal sold by the Group based on the annual long-term contracts increased slightly year on year, which was mainly due to the decrease in the average calorific value of this part of coal as compared with the same period of last year.

(2) By sales regions

			January to March 2021	January to March 2020	Change
				Proportion	Price		Proportion	Price		Price
			Sales	of total	(exclusive	Sales	of total	(exclusive	Sales	(exclusive
			volume	sales	of tax)	volume	sales	of tax)	volume	of tax)
			Million		RMB/	Million		RMB/
			tonnes	%	tonne	tonnes	%	tonne	%	%
I.	Domestic sales	113.9	98.7	476	98.1	99.7	408	16.1	16.7
	(I) Self-produced coal and	109.8	95.2	477	97.4	99.0	408	12.7
		purchased coal								16.9
	1.	Direct arrival	48.8	42.3	365	40.1	40.8	326	21.7	12.0
	2.	Seaborne	61.0	52.9	568	57.3	58.2	466	6.5	21.9
	(II) Sales of domestic trading
		coal	2.2	1.9	517	0.6	0.6	352	266.7	46.9
	(III) Sales of imported coal	1.9	1.6	347	0.1	0.1	410	1,800.0	(15.4)
II.	Export sales	0.1	0.1	713	0.3	0.3	588	(66.7)	21.3
III.	Overseas sales	1.4	1.2	386	0.0	0.0	0	/	/
Total sales volume/average price
(exclusive of tax)	115.4	100.0	475	98.4	100.0	409	17.3	16.1

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3.3.2Operating results (before elimination on consolidation)

		January to	January to	Percentage	Major reasons
		March 2021	March 2020	change	for changes
				%
Revenue	RMB million	56,323	41,069	37.1	Increase in sales volume
					and average selling
					price of coal
Cost of sales	RMB million	(45,499)	(32,010)	42.1	Increase in sales volume
					of coal; increase in
					the proportion of sales
					and purchase price of
					purchased coal
Gross profit	RMB million	10,824	9,059	19.5
Gross profit	%	19.2	22.1 Decreased by 2.9
margin			percentage points
3.3.3Unit production cost of self-produced coal
				Unit: RMB/tonne
		January to	January to	Percentage	Major reasons
		March 2021	March 2020	change	for changes
				%
Unit production cost of self-	124.7	124.1	0.5
produced coal
Raw materials, fuel and power	24.8	23.6	5.1	With the implementation
					of linkage policy
					between coal price
					and electricity price in
					west Inner Mongolia
					Region, the increase in
					electricity price of the
					Group's relevant coal
					enterprises under the
					influence of coal price
					increase during the
					reporting period
Personnel expenses	21.0	21.3	(1.4)
Repairs and maintenance	10.4	9.3	11.8	Increase in repair costs
					for part of open-pit
					mines
Depreciation and amortisation	18.7	18.9	(1.1)
Other costs		49.8	51.0	(2.4)

- 15 -

Other costs consist of the following three components: ① expenses directly related to production, including expenses for coal washing, selecting and processing expenses, and mining engineering expenses, etc., accounting for approximately 55%; ② auxiliary production expenses, accounting for approximately 26%; ③ land requisition and surface subsidence compensation, environmental protection expenses, and tax, accounting for approximately 19%.

3.4 Operation of the power segment

1. Power generation and power output dispatch

	Gross power generation	Power output dispatch Average utilisation hours		Power tariff
		billion kWh		billion kWh	hours						RMB/mWh
	January to January to	January to January to January to January to January to January to
Location/		March	March		March		March	March	March		March		March
Type of power	2021		2020		2021	2020	2021		2020	2021	2020
Domestic	36.73	27.08	34.48	25.38	1,174		884	336	341
Coal-fired power	35.47	26.03	33.26	24.37	1,174		881	328	332
Gas-fired power	1.17	0.97	1.15	0.94	1,230		1,018	575	573
Hydropower	0.09	0.08	0.07	0.07	729		609	370	301
Overseas	0.45	0.38	0.40	0.33	1,522		1,269	451	576
Coal-fired power	0.45	0.38	0.40	0.33	1,522		1,269	451	576
Total/Weighted average	37.18		27.46		34.88	25.71		1,178		888	338	344
(2) Installed power generators
																						Unit: MW
												Installed capacity
						Total installed	increased/(decreased)		Total installed
					capacity as at 31		for the reporting		capacity as at
Power type					December 2020				period	31 March 2021
Coal-fired power								31,204					(700)						30,504
Gas-fired power								950								-				950
Hydropower								125								-				125
Total								32,279					(700)						31,579

During the reporting period, the equity transfer of Fuping Thermal Power was completed, and the coal-fired installed power generators of the Group was reduced by 700MW.

- 16 -

(3) Operating results (before elimination on consolidation)

		January to	January to	Percentage
		March 2021	March 2020	change	Major reasons for changes
				%
Revenue	RMB million	13,457	9,588	40.4	Increase in power output dispatch
Cost of sales	RMB million	(11,264)	(7,635)	47.5	Increase in power output dispatch
					and coal price leads to an increase
					in coal costs
Gross profit	RMB million	2,193	1,953	12.3
Gross profit	%	16.3	20.4	Decreased by
margin				4.1 percentage
				points

From January to March 2021, the Group's unit cost of power output dispatch of the power business was RMB 305.5/mWh (for the corresponding period in 2020: RMB289.9/mWh), representing a year- on-year increase of 5.4%.

3.5 Major operation of transportation and coal chemical segments

Unit: RMB million

		Railway			Port			Shipping			Coal chemical
	January	January		January	January		January	January		January	January
	to March	to March	Percentage	to March	to March	Percentage	to March	to March	Percentage	to March	to March	Percentage
	2021	2020	Change	2021	2020	Change	2021	2020	Change	2021	2020	Change
			%			%			%			%
Revenue	9,873	8,921	10.7	1,631	1,404	16.2	1,244	623	99.7	1,595	1,152	38.5
Cost of sales	(4,805)	(4,309)	11.5	(838)	(719)	16.6	(972)	(551)	76.4	(1,229)	(1,173)	4.8
Gross profit	5,068	4,612	9.9	793	685	15.8	272	72	277.8	366	(21)	(1,842.9)
			Decreased			Decreased			Increased			Increased
			by 0.4			by 0.2			by 10.3			by 24.7
			percentage			percentage			percentage			percentage
Gross profit margin (%)	51.3	51.7	point	48.6	48.8	point	21.9	11.6	points	22.9	(1.8)	points

In the first quarter of 2021, the year-on-year increase in the gross profit of shipping segment was mainly attributable to the year-on-year increase in shipping turnover and shipping rates. The year-on-year increase in the gross profit of coal chemical segment was mainly attributable to the year-on-year increase in sales volume and sales price of olefin products.

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3.6 Analysis of industry environment

In the first quarter of 2021, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at the core, China actively responded to the challenges brought by COVID-19 in winter and spring and the uncertainty of the external environment, consolidated and expanded the results of pandemic prevention and control and economic and social development, scientifically and accurately implemented macroeconomic policies, stably strengthened the economic operation, made progress while maintaining stability, expanded production demand, and improved the market vitality, the employment and prices remained stable, livelihood protection was strong, and the national economy continued to recover steadily. In the first quarter, the gross domestic product (GDP) increased by 18.3% year on- ear, and increased by 0.6% from the fourth quarter of 2020; consumer prices index across the country remained flat year-on-year.

In the first quarter, the domestic coal market was generally stable. The raw coal production in the PRC was 970 million tonnes, representing a year-on-year increase of 16.0%. The accumulative coal import amounted to 68.458 million tonnes, representing a year-on-year decrease of 28.5%. Thermal power generation by power plants above a designated scale in the PRC increased by 19.0% as compared with the corresponding period of last year, of which thermal power generation increased by 21.1% year on year. Affected by factors such as changes in electricity consumption around the Spring Festival and safety and environmental inspection for coal production areas, coal prices showed periodic fluctuations. The price index of Bohai Bay thermal coal (5,500 kcal) was RMB585/tonne at the end of March, keeping flat as compared with the beginning of the year; the average value of the price index for the first quarter was RMB595/tonne, representing a year-on-year increase of RMB40/tonne.

In the second quarter, the fully recovery of industrial demand, summer peaks, railway line maintenance and other factors shall further contribute to coal prices. It is expected that the national coal market will maintain an overall balance throughout the year, but the coal supply pattern of loose total volume and tight structure will exist at the same time.

Note: The contents of the industry environment is for reference only and does not constitute any investment advice. The information on the industry environment was derived from sources such as the National Bureau of Statistics, China Coal Market Network, China Coal Resource Network and China Electricity Council, etc. The Company has used its best endeavours to ensure the accuracy and reliability of information, but does not assume any liability or provide any form of guarantee for the accuracy, completeness or validity of all or part of its content. If there is any error or omission, the Company does not assume any liability.

- 18 -

3.7 Progress of significant events and the impact thereof as well as the analysis and explanations for the solutions

Applicable

✓ Not applicable

3.8 Commitments that have yet to be fulfilled within the stated time frame during the reporting period

Applicable

✓ Not applicable

3.9 Warnings and explanations with regard to forecast of a probable loss in respect of the accumulated net profits from the beginning of the year to the end of the next reporting period or any significant changes as compared to the corresponding period of last year

Applicable

✓ Not applicable

1. Others
   Yang Xiangbin has served as the Deputy Secretary of the Party Committee of the Company since 6 April 2021.
   Yang Xiangbin, male, born in October 1965, Chinese nationality, certified public accountant, professoriate senior accountant and a member of the CPC. Mr. Yang obtained the master's degree of Business Administration from the Open University of Hong Kong in 2011.
   Mr. Yang has served as the director of the capital operation department of China Energy Group, the director of the capital and asset management department of China Guodian Corporation and the secretary of the Party Committee, director and deputy general manager of Inner Mongolia Pingzhuang Coal (Group) Co., Ltd..
2. Definitions

China Shenhua/the	China Shenhua Energy Company Limited
Company
The Group	the Company and its subsidiaries
China Energy	China Energy Investment Corporation Limited
Beijing GD Power	Beijing GD Power Co., Ltd.

- 19 -

Finance Company	China Energy Finance Co., Ltd. (formerly known as
	Shenhua Finance Co., Ltd.)
Transaction of capital	T h e t r a n s a c t i o n i n w h i c h C h i n a E n e r g y
increase in Finance	subscribed the additional registered capital of
Company	Finance Company of RMB7.5 billion by cash in
	RMB13,273,716,000 (for details, please refer to
	the H shares announcement of the Company dated
	27 March 2020 and the A shares announcement
	dated 28 March 2020)
China Accounting	the Accounting Standards for Business Enterprises,
Standards for	Application Guidance to Accounting Standards for
Business Enterprises	Business Enterprises, Interpretations of Accounting
	Standards for Business Enterprises and other related
	requirements issued by the Ministry of Finance of
	the People's Republic of China
International Financial	International Financial Reporting Standards
Reporting Standards	issued by the International Accounting Standards
or IFRSs	Committee
Reporting Period	January to March 2021
	By order of the Board
	China Shenhua Energy Company Limited
	Huang Qing
	Secretary to the Board of Directors
Beijing, 23 April 2021

As at the date of this announcement, the Board comprises the following: Mr. Wang Xiangxi, Mr. Yang Jiping and Mr. Xu Mingjun as executive directors, Mr. Jia Jinzhong as non-executive director, Dr. Yuen Kwok Keung, Dr. Bai Chong-En and Dr. Chen Hanwen as independent non-executive directors, and Mr. Wang Xingzhong as employee director.

- 20 -

APPENDIX

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

For the three months ended 31 March

	2021		2020
	RMB million	RMB million
	(unaudited)	(unaudited)
Revenue
Goods and services	67,608	51,077
Cost of sales	(48,435)	(34,511)
Gross profit	19,173		16,566
Selling expenses	(147)	(135)
General and administrative expenses	(1,666)	(1,665)
Research and development expenses	(144)	(91)
Other gains and losses	42	470
Other income	124	112
Loss allowances, net of reversal	4	98
Other expenses	(78)	(8)
Interest income	561	388
Finance costs	(566)	(957)
Share of results of associates	766	304
Profit before income tax	18,069		15,082
Income tax expense	(3,608)	(2,989)
Profit for the period	14,461		12,093

- 21 -

		2021		2020
		RMB million	RMB million
		(unaudited)	(unaudited)
Other comprehensive income for the period
Item that will not be reclassified to profit or loss,
net of income tax:
Remeasurement of defined benefit obligations	0		0
Item that may be reclassified subsequently to profit
or loss, net of income tax:
Exchange differences	142		12
Share of other comprehensive income of
associates	1	(31)
Other comprehensive income for the period, net
of income tax	143		(19)
Total comprehensive income for the period	14,604		12,074
Profit for the period attributable to:
Equity holders of the Company	11,864		9,980
Non-controlling interests		2,597	2,113
		14,461		12,093
Total comprehensive income for the period
attributable to:
Equity holders of the Company	11,990		9,946
Non-controlling interests	2,614	2,128
		14,604		12,074
Earnings per share
- Basic (RMB)	0.597		0.502

- 22 -

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2021

	As at		As at
	31 March		31 December
	2021	2020
	RMB million		RMB million
	(unaudited)		(audited)
Non-current assets
Property, plant and equipment	239,691	238,198
Construction in progress	40,429	39,845
Intangible assets	4,273	3,888
Right-of-use assets	18,419	18,597
Interests in associates	50,582	49,556
Equity instruments at fair value through other	1,845	1,845
comprehensive income
Other non-current assets	35,459	35,890
Deferred tax assets	3,094	2,856
Total non-current assets	393,792	390,675
Current assets
Inventories	16,471	12,750
Accounts and bills receivables	14,419	11,759
Prepaid expenses and other current assets	21,938	17,480
Restricted bank deposits	3,202	3,391
Time deposits with original maturity over three	9,565	11,186
months
Cash and cash equivalents	129,099	112,880
Assets classified as held for sale	8	2,783
Total current assets	194,702	172,229

- 23 -

	As at	As at
	31 March	31 December
	2021		2020
	RMB million	RMB million
	(unaudited)	(audited)
Current liabilities
Borrowings	6,707		8,847
Accounts and bills payables	29,394		28,980
Accrued expenses and other payables	26,748		18,949
Current portion of lease liabilities	231		242
Current portion of long-term liabilities	589		689
Income tax payable	4,577		6,313
Contract liabilities	7,112		5,256
Liabilities associated with assets	0		217
classified as held for sale
Total current liabilities	75,358		69,493
Net current assets	119,344		102,736
Total assets less current liabilities	513,136		493,411
Non-current liabilities
Borrowings	51,985		50,251
Bonds	3,244		3,241
Long-term liabilities	5,944		2,661
Accrued reclamation obligations	6,227		6,169
Deferred tax liabilities	1,049		896
Lease liabilities	632		606
Total non-current liabilities	69,081		63,824
Net assets	444,055		429,587

- 24 -

	As at	As at
	31 March	31 December
	2021		2020
	RMB million	RMB million
	(unaudited)	(audited)
Equity
Share capital	19,869		19,890
Reserves	356,106		344,313
Equity attributable to equity holders of the Company	375,975		364,203
Non-controlling interests	68,080	65,384
Total equity	444,055		429,587

- 25 -

PREPARED UNDER IFRSs

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended 31 March

	2021		2020
	RMB million	RMB million
	(unaudited)	(unaudited)
Operating activities
Cash generated from operations	24,958		32,700
Income taxes paid	(5,344)	(2,716)
Net cash generated from operating activities	19,614		29,984
Investing activities
Acquisition of property, plant and equipment,	(8,229)	(2,843)
intangible assets, exploration and evaluation
assets, additions to the construction in progress
and other non-current assets
Increase in right-of-use assets	(51)	(20)
Proceeds from disposal of property, plant and	83		62
equipment, intangible assets, right-of-use asset
and other non-current assets
Proceeds from disposal of wealth management	0		13,562
products included in prepaid expenses and
other current assets
Proceeds on disposal of derivative financial	0		71
instruments included in prepaid expenses and
other current assets
Investments in associates	(258)	(63)
Dividend received from associates	20		15
Interest received	401		375
Purchase of derivative financial instruments	0		(1)
included in prepaid expenses and other current
assets
Decrease/(increase) in restricted bank deposits	2,803		(506)
Placing of time deposits with original maturity	(313)	(20)
over three months
Maturity of time deposits with original maturity	1,935		109
over three months
Net repayment received from entrusted loans	394		0

- 26 -

	2021		2020
	RMB million	RMB million
	(unaudited)	(unaudited)
Disposal of interbank certificate of deposits	0		4,038
included in prepaid expenses and other current
assets
Net cash received from disposal of subsidiaries	4,053		0
and other operating units
Net cash generated from investing activities	838		14,779
Financing activities
Capital element of lease rentals paid	(67)	(34)
Interest element of lease rentals paid	(10)	(26)
Interest paid	(68)	(863)
Proceeds from borrowings	3,952			1,886
Repayments of borrowings	(5,248)	(2,365)
Repayments of bonds	0			(3,488)
Contributions from non-controlling shareholders	125			41
Distributions to non-controlling shareholders	(751)	(776)
Net cash used in financing activities	(2,067)	(5,625)
Net increase in cash and cash equivalents	18,385		39,138
Cash and cash equivalents, at the beginning of	112,880		41,827
the period
Effect of foreign exchange rate changes	448	(71)
Cash and cash equivalents, at the end of the
period	131,713		80,894

- 27 -