CHINA National Coal Group aims to double profit and sales by the end of the decade on expectation of increasing demand for coal from power producers.
The country's second biggest coal producer expects gross profit can exceed 10 billion yuan (US$1.3 billion) in 2010, up from last year's 4.13 billion yuan.
China National also has a target turnover of 100 billion yuan in 2010, almost doubling last year's 52 billion yuan, according to a statement it filed to the State-owned Assets Supervision and Administration Commission this week.
The Beijing-based company said it will reach the goal by expanding in coal-to-chemical operations and coal-mining machinery manufacture, in addition to the flagship coal-producing business.
For the first quarter, it had reported an 85.9-percent jump in profit to a record of 1.44 billion yuan on a yearly basis although sales remained flat.
"Profit growth is much faster than sales growth in China's coal sector because of improved efficiency," Sinolink Securities Co analyst Gong Yunhua said in a research note.
Chinese coal producers are benefiting from the growth of electricity generation, as demand from industrial consumers like aluminum smelters and steel mills rises fast.
Coal prices are rising.
In its push for new energy business, China National in late May inaugurated construction of two coal-to-chemical projects worth 1.66 billion yuan in Yilan, in northeastern Heilongjiang Province.
One is a coal-to-methanol project with annual production capacity of 250,000 tons. Methanol is an alcohol that can be used as an alternative fuel or as a gasoline additive.
Another facility will turn 600,000 tons of oil shale annually into 12,000 tons of naphtha and 40,200 tons of light fuel oil. Oil shale is fossil rock containing kerogen from which oil can be obtained.
The two projects are expected to generate more than 300 million yuan of profit and more than one billion yuan in turnover annually when they start operation next year.
Shares in China Coal Energy Co, the listed unit of China National, closed 3.4 percent higher at HK$12.76 (US$1.60) yesterday in Hong Kong.