Ningbo United disclosed its reply to the Shanghai Stock Exchange's regulatory inquiry letter on the 2025 annual report. The exchange focused on the company's wholesale trading business, requesting an explanation for the sharp decline in revenue and the negative gross margin in the coal business. Data shows that the company's wholesale business revenue in 2025 was 197 million yuan, a year-on-year plunge of 76.22%, with a comprehensive gross margin of 1.79%, compared to a negative margin the previous year. Among this, coal revenue was 184 million yuan, down 77.45% year-on-year, with a gross margin of negative 4.98%. The company responded that the decline in trading revenue stemmed from a contraction in self-operated imported coal. In 2025, domestic coal prices continued to weaken, imported coal lost its price advantage, and national total coal imports fell 9.6% year-on-year. After fulfilling existing long-term contracts, the company did not sign new ones, only conducting occasional small-volume transactions. Coal revenue decreased by 632 million yuan year-on-year, accounting for the entire decline in wholesale revenue. The persistent losses in self-operated coal were due to previously signed long-term contract procurement costs exceeding domestic selling prices, with remaining cargo settlements at the start of 2025 still confirming losses. The comprehensive gross margin turned positive because the loss-making coal business shrank in scale, and the subsidiary transferred part of its equity in a customs brokerage company, causing it to be deconsolidated. The low-margin customs brokerage business was no longer included in agency statistics, and the agency business gross margin rose to 100%. Peers such as Shanxi Coal International saw synchronous weakening in coal trading revenue and gross margin, and the company's operational changes aligned with industry trends. Regarding revenue recognition, the company stated that self-operated coal bears cargo ownership, logistics, and price risks and is accounted for using the gross method, while the agency business only collects commissions and uses the net method. Accounting policies have not changed in the past two years, and the treatment complies with corporate accounting standards. The company also disclosed the top ten trading customers, with only two being new partners. All counterparties have no related-party relationships, and procurement and sales have genuine commercial backgrounds.
Ningbo United Group Co LtdWholesale revenue plunged 76% due to contraction in self-operated imported coal, with coal gross margin turning negative.
Shanxi Coal International Energy Group Co Ltd