Yi Dazong (01733) is forecasting a year-on-year decrease in net profit of around HK$900 million to HK$1 billion in 2024

According to the Zhitong Finance App, Yi Dazong (01733) announced that the group's net profit for the 2024 fiscal year is expected to decrease to about 900 million and HK$1 billion compared to the full year of 2023, mainly due to the downturn in the market, the price of coking coal falls all the way down, which in turn causes gross margin to decline.

Facing the severe market environment, the group aims to serve customers with a full range of high quality, and has a stable market share. In 2024, it achieved a total sales volume of nearly 23 million tons of coal, an increase of about 20% over last year. Compared with the first half of 2024, demand for steel mills in the first half of 2024 was significantly better than in the second half. Steel mill production remained high and stable. In the context of high daily consumption of high-speed rail water, the price of coking coal is still highly resilient. However, iron and water production directly declined in the second half of the year, especially in the third quarter, and the conflict between supply and demand for coking coal continued to widen. In the process of market decline, the group implemented a “volume compensation” strategy in the second half of the year to stabilize its market share in the industry's general loss environment by deepening customer service and expanding value-added business. With the hard work spirit of “breaking through adversity”, all employees continue to provide customers with customized trade supply chain solutions, demonstrating corporate resilience.

In the coking coal market, profits from all upstream and downstream links are declining. As a supply chain service provider, the Group's gross profit from related services has also been affected to a certain extent, but the company and upstream and downstream enterprises have joined forces to respond positively, reduce costs, and enhance competitiveness. It is worth noting that the construction of the China-Mongolia Cross-border Corridor has achieved remarkable results: in 2024, Mongolia's coal imports reached a record high of nearly 83 million tons, an increase of about 18% over last year. Relying on the forward-looking layout of the entire port chain, the group witnessed and participated in various port volume breakthroughs. In 2024, the group participated in achieving about 17 million tons of port storage, an increase of about 7% over last year. Among them, Ganqimaodu Port's coal storage capacity is about 11 million tons, maintaining the port's market share. Domestic transportation volume reached about 13 million tons, an increase of about 11% over last year. As the bottleneck in transportation capacity is gradually broken through, Mongolian coal will enter the Chinese market more easily and efficiently. This is not only reflected in the rebalancing of profits in the supply chain, but also indicates that the price competitiveness of Mongolian resources in the market will be further strengthened, and the variety of imported resources will also become richer in the future.