Slump in coal firm's shares may hit profit
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Shanghai Daily, September 20, 2011
China Coal Energy Co slumped dramatically Monday in Shanghai and Hong Kong after its parent was ordered to cease operations in Shanxi Province following a fatal mine accident, and the suspension may hit its profit, according to an analyst.
Shares of the miner dropped 5.9 percent to 9.02 yuan (US$1.41) in Shanghai and were suspended from trading in Hong Kong after shedding 16.8 percent to HK$8.26 (US$1.06), the biggest drop since October 27, 2008.
Its parent, China National Coal Group Corp, the country's second-biggest coal producer, was ordered to halt underground mining in the province after 10 miners drowned in a flooding in the pit last Friday, Xinhua news agency said. Operations won't resume until an inspection has been carried out, Xinhua added.
"The company's annual output will fall 4.3 percent this year and profit will drop 4.6 percent if it is suspended from trading for a month," said Cai Hongyu, an analyst at China International Capital Co.
"The output of affected mines in Shanxi totaled 61.55 million tons, accounting for 50.2 percent of the company's total output last year, and is expected to reach 70 million tons this year, or 52.9 percent of the total," Cai said.
The accident also caused China's key thermal-coal price at the Qinhuangdao port to rise on a monthly basis for the first time in 12 weeks.
Power plants start replenishing coal stockpiles before winter demand for electricity and heating rises, the China Coal Transport and Distribution Association said yesterday. It added inventories fell 8.8 percent in the week to September 11.
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