CStone Pharmaceuticals — Interim / Quarterly Report 2002

Apr 30, 2002

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

兗州煤業股份有限公司

YANZHOU COAL MINING COMPANY LIMITED

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

First Quarterly Report for the Year 2002

Important

This announcement is made pursuant to the disclosure requirement under Paragraph 2(2) of the Listing Agreement.

The Board of Directors of the Company confirms that this Report does not contain any false information, misleading statements or material omissions, and accept joint and several responsibility for the truthfulness, accuracy and completeness of the content. These quarterly financial statements of the Company have not been audited.

Summary of the results for the first quarter ended 31st March 2002:

* During the period under review, revenue from principal operations was RMB1,760.361 million, representing an increase of RMB314.218 million or 21.7% over the same period last year. Realized net profit was RMB311.619 million, representing an increase of RMB108.479 million or 53.4% over the same period last year.

* This quarterly report is prepared in accordance with the regulations on Disclosure of Information in Quarterly Reports for Listed Companies by the China Securities Regulatory Commission.

* All financial information contained in this quarterly report is prepared in accordance with the PRC Generally Accepted Accounting Principles ("PRC GAAP"). The Company has also provided coal sales price calculated in accordance with the basis reflected in its previous annual reports and interim reports as announced in Hong Kong for details of which please refer to the section headed "Coal sales prices calculated in accordance with the basis reflected in its previous annual reports and interim reports as announced in Hong Kong". Shareholders of the Company and public investors should be aware of investment risks when trading shares in the Company.

* Unless otherwise specified, the currency in this quarterly report shall be denominated in RMB.

* The information in this report is the same as that published by the Shanghai Stock Exchange, and this report is published simultaneously in the PRC and Hong Kong.

1. Corporate Information

1.	Company Chinese Name	兗州煤業股份有限公司
	Company English Name	Yanzhou Coal Mining Company Limited
2.	Legal Representative	Mo Liqi
3.	Authorised Representatives	Yang Jiachun
		Chen Guangshui
	Company Secretary	Chen Guangshui
	Contact Address	40 Fushan Road
		Zoucheng
		Shandong Province
		PRC
		Office of the Secretary of the Board of Directors
		Tel: (86-537)-5382319
		Fax: (86-537)-5383311
		E-mail:yzc@yanzhoucoal.com.cn
4.	Registered Address	40 Fushan Road
		Zoucheng
		Shandong Province
		PRC
	Office Address	40 Fushan Road
		Zoucheng
		Shandong Province
		PRC
	Postal Code	273500
	Website	http://www.yanzhoucoal.com.cn
	E-mail	yzc@yanzhoucoal.com.cn
5.	Newspapers for disclosure of	China Securities,
	information of the Company	Shanghai Securities News,
		Wen Wei Po of Hong Kong,
		South China Morning Post of Hong Kong
	Website for posting of quarterly reports	http://www.sse.com.cn
	of the Company
	Depository for the Company's	Office of the Secretary of the Board of Directors of
	quarterly reports	Yanzhou Coal Mining Company Limited
		Tel: (86-537)-5382319
		Fax: (86-537)-5383311
6.	Places of listing, stock code and	A Shares:
	ticker symbol	The Shanghai Stock Exchange
		Ticker Symbol: 600188
		Stock Abbreviation: Yanzhou Mei Ye
		H Shares:
		The Stock Exchange of Hong Kong Limited
		Share Code: 1171
		ADRs:
		The New York Stock Exchange, Inc.
		Ticker Symbol: YZC

2. Changes in Share Capital and Shareholding of Major Shareholders

1. Changes in Share Capital

There was no change in the share capital of the Company during the period under review.

2. Shareholding of the Major Shareholders as at 31st March, 2002

		Number of
		Shares held
	Class of	at end of		Percentage
Top Ten Shareholders	Shares held	this period		Holding (%)
Yankuang Group Corporation Limited	State legal	1,670,000,000		58.19
	person shares
HKSCC Nominees Limited	H shares	1,017,904,000		35.47
China National Petroleum Corporation	A shares	16,219,698		0.57
Haitong Securities	A shares	6,924,692		0.24
Kaiyuan Fund	A shares	3,046,335		0.11
Huaan Chuangxin Fund	A shares	2,508,059		0.09
Jingfu Fund	A shares	2,330,432		0.08
Anshun Fund	A shares	2,308,750		0.08
United Securities	A shares	2,252,740		0.08
Anxin Fund	A shares	2,239,218		0.08

Save as disclosed above, pursuant to the Securities Law of the People's Republic of China, there was no other shareholder who was recorded in the share register as at 31st March, 2002 as having an interest of 5% or more of the Company's public shares.

None of the shares held by Yankuang Group Corporation Limited (the "Parent Company") were pledged or restricted during the period under review.

As the clearing and settlement agent for the Company's H Shares, HKSCC Nominees Limited held the Company's H Shares in the capacity as a nominee.

Amongst the top 10 shareholders of the Company, Huaan Chuangxin Fund, Anshun Fund and Anxin Fund were all managed by the same fund manager Huaan Fund Management Co., Ltd.

3. Discussion and Analysis of Business Operation

(1) Principal Activities and Business Operation

1. The Company is principally engaged in underground mining, preparation and sales of coal as well as railway transportation of coal.

2. In the first quarter of 2002, the Company significantly improved its performance through continued implementing operating strategies of increasing production and sales volume and enlarging export volume of coal. In the period under review, income derived from its principal activities was RMB1,760.361 million representing an increase of RMB314.218 million or 21.7% over the same period last year. Out of this, coal sales income was RMB1,723.024 million, representing an increase of RMB276.881 million or 19.1% over the same period last year. Income derived from the newly acquired railway assets was RMB37.337 million.

Cost of the Company's principal operations was RMB687.838 million or an increase of 6.9% over the same period last year. The increase was mainly due to an increase in the sales of coal. The cost of the sales of coal products was RMB673.724 million and the unit cost of coal sales was RMB88.5/ton, representing a decrease of RMB2.1/tonne or 2.3% when compared to the unit cost of coal sales of RMB90.6/ton in 2001. The external transportation cost of the railway assets was RMB14.114 million.

Profit realised from principal activities was RMB1,039.846 million, representing a growth of RMB274.604 million or 35.9% over the same period last year. Net profit realised was RMB311.619 million, representing a growth of RMB108.479 million or 53.4% over the same period last year.

In the period under review, the Company's raw coal production increased by 941,000 tonnes or 11.0% to 9.493 million tonnes and the sales of coal increased by 210,000 tonnes or 2.8% to 7.610 million tonnes as compared with the same period last year.

The average coal price of the Company was RMB226.43/ton, representing an increase of RMB31.00/ton or 15.9% as compared with the same period last year, or representing an increase of RMB17.98/ton or 8.6% as compared with the average coal price in 2001.

Coal transported by the newly acquired railway assets reached 6.214 million tonnes, representing an increase of 1.924 million tonnes or 44.8% over the same period last year.

1. Coal sales prices calculated in accordance with the basis reflected in its previous annual reports and interim reports as announced in Hong Kong

	Unit: RMB/ton
	Average
	coal price
	during
	the period
	under review	Average	Average
	(taking into	price of	coal
	account	coal of	price in	Average
	the effects	the same	the same	coal
	of railway	class	period	price
	transportation)	last year	last year	in 2001
Average sales price	178.70	171.24	142.21	157.11
Export Sale	203.10	188.65	150.25	179.71
Domestic sale	162.31	159.55	137.57	141.53

As calculated in accordance with the basis reflected in its previous annual reports and interim reports as announced in Hong Kong, the average coal sales price in the first quarter, not taking into account the consequences of the acquisition of the railway assets, was RMB 171.24/ton, representing an increase of RMB 29.03/ton or 20.4% over the same period last year. Average export price was RMB 188.65/ton, representing an increase of RMB 38.40/ton or 25.6%. Average domestic sales price was RMB 159.55/ton, representing an increase of RMB 21.98/ton or 16.0%. When compared to the average sales price in 2001, there was an increase of RMB 14.13/ton or 9.0%.

1. Discussion of the various factors that affected the performance of the Company in the first quarter

(1) Around 80% of the Company's volume of coal export were exported to Japan. According to the normal practice of coal export negotiation, the contract price as well as volume for the first quarter of any one year shall be the price as well as volume that were determined in the second quarter of the previous year for that year (from the beginning of April of any one year till the end of March next year). The increase in the contract price of coal for export in the first quarter of 2002 was larger than that of the same period last year;

(2) Price of coal had been on an upward trend throughout 2001, and therefore the average price of the first quarter was relatively lower when compared to the annual average price. The average price of domestic sales in the first quarter of 2002 was not very much higher than the annual average price in 2001, while there was a more remarkable increase when compared to the same period in 2001;

(3) The newly acquired railway assets enabled the Company to cut down its special purpose coal transportation expenses by RMB 56.719 million, and the income realised was RMB 37.337 million.

(2) Brief analysis of operating performance and financial status

1. Income and profit from principal activities and net profit

	Amount (million)
	Period	Same period	Increase/
Item	under review	last year	decrease %
Income from principal activities	1,760.361	1,446.143	21.73
Profit from principal activities	1,039.846	765.242	35.88
Net profit	311.619	203.140	53.40

The realised income from principal activities in the first quarter of 2002 increased by RMB314.218 million or 21.7% to RMB1,760.361 million. The increase was mainly attributable to the increase in coal price and income realised from the newly acquired railway assets.

The realised profit from principal activities in the first quarter of 2002 increased by RMB274.604 million or 35.9% to RMB1,039.846 million. The increase was mainly attributable to the increase in principal activities income.

1. Percentage of revenue and expenses in relation to gross profit

	Amount (million)		% in relation to profit
	Period		Period
	under		under		Increase/
Item	review	2001	review	2001	decrease
Profit from principal activities	1,039.846	3,557.065	223.21	255.56	-12.66
Profit from other activities	8.256	26.483	1.77	1.90	-6.84
Expenses during the period	582.325	2,182.742	125.00	156.82	-20.29
Net-operating income/expenses	0.076	-8.932	0.02	-0.64	-
Gross profit	465.854	1,391.875	100.00	100.00	0.00

The percentage of expenses during the period in relation to gross profit decreased by 20.3% when compared to the period previously reported. This was mainly due to the fact that the realised gross profit increased substantially.

The percentage of net balance of non-operating income less expenses in relation to gross profit increased to 0.02% from - 0.64% of the period previously reported. This was mainly because income from fixed assets increased in the period under review.

1. Analysis of financial status

	Amount (million)		In relation to total assets (%)
	At	At the	At	At the
	the end of	beginning	the end of	beginning	Increase/
Item	this period	of this year	this period	of this year	decrease
Accounts receivable	701.375	550.785	5.60	4.85	15.46
Other receivable	432.787	401.120	3.45	3.53	-2.27
Inventories	562.943	439.882	4.49	3.88	15.72
Net value of fixed assets	7,867.695	7,209.066	62.80	63.51	-1.12
Total assets	12,527.874	11,350.223	100.00	100.00	0.00

(3) Investment of the Company

1. Investment of proceeds

As disclosed at the time of the new issues of A Shares and H Shares in 2001, all the net proceeds raised from the additional issue of A Shares and H Shares would be used in satisfying the consideration for Jining III coal mine acquisition. RMB494 million raised from the new issue of H Shares is currently deposited in the account with the Bank of China, Zoucheng sub-branch and shall be payable by the end of 2002.

	Amount	Actual
	of	investment
	planned	in the	Accumulated
	investment	quarter	investment	Progress
Source of proceeds	(million)	(million)	(million)	(%)
New issue of 100 million A Shares	961	-	961	100
New issue of 170 million H Shares	494	0	0	0
Total	1455	0	961	66.05

1. Other investment

In accordance with the acquisition agreement for railway assets, the Company completed the acquisition of railway assets from the Parent Company on 1st January, 2002. For details of the acquisition of railway assets, please refer to the summary of the annual results for the year ended 31st December, 2001 published in China Securities and Shanghai Securities News in the PRC, and the annual results announcement for the year ended 31st December 2001 published in Wen Wei Po and South China Morning Post in Hong Kong on 9th April, 2002.

(4) Production and business environment and the effects of changes in macro policy and rules and regulations on the financial status and operating results of the Company

Coal price of the Company was able to benefit from the improved market in the previous year. It was maintained at a relatively higher level in the first quarter of 2002, rising 15.9% from the same period last year.

The Company's main export market is Japan. As a practice, the contract price as well as volume for the first quarter of any one year shall have been determined in the second quarter of the previous year. The contract prices of No. 2 clean coal and No. 3 clean coal for the first quarter of 2002 were USD35/ton and USD33.5/ton respectively and were 16.6% and 19.5% higher than that of the same period last year respectively. The export volume was 3.058 million tonnes, 12.9% higher than the same period last year. The export price saw a relatively large increase in the first quarter of 2002.

The financial status of the Company was not materially affected by the production and operation environment and change in macro policy.

Towards the end of 2001, the PRC government allowed some small mines to resume production resulting in an increase of coal supply in the domestic market and the coal price in the second quarter of 2002 is likely to drop. The decision to close a large portion of small mining companies made by the State Economic and Trade Commission in March will serve to balance supply and demand in the domestic market and maintain a stable coal price.

Coal price in the international market dropped after resuming an upward trend in 2001. The Company has contracted to supply over 5 million tonnes of No. 2 clean coal to Japan at a FOB price of US$33/ton for the year 2002 (from the beginning of April 2002 to the end of March 2003). This represents a decrease of about 6% over the same period last year. Negotiation for No. 3 clean coal has yet to be concluded. The Company will continue to export spot coal in 2002.

On the whole, the average coal price this year will be higher than that of last year.

4. Significant and post-report matters

1. Material litigations and arbitration

The Company was not involved in any material litigation or arbitration during the period under review.

2. Material guarantee, investment services and borrowing of funds

The Company has not given any material guarantee or received any investment services during the period under review.

The Company borrowed a total of RMB1.2 billion from the Bank of China on 4th January, 2002 to finance the acquisition of railway assets. For details of the acquisition of railway assets, please refer to the summary of the annual results for the year ended 31st December, 2001 published in China Securities, Shanghai Securities News and the annual results announcement for the year ended 31st December, 2001 published in Wen Wei Po and South China Morning Post of Hong Kong on 9th April, 2002.

3. Amount of material overdue debts, duration and reason of overdue and expected repayment date

The Company did not have any material overdue debts during the period under review.

4. Material assets acquisition and disposal of the Company

The Company acquired the railway assets of the Parent Company on 1st January, 2002. Details of the acquisition were set out in the summary of the annual results for the year ended 31st December, 2001 of the Company published in China Securities and Shanghai Securities News and the annual results announcement for the year ended 31st December, 2001 published in Wen Wei Po and South China Morning Post of Hong Kong on 9th April, 2002.

5. Appointment of Directors and Supervisors, election of Chairman and Vice Chairman of the Board, Chairman of the Supervisory Committee and appointment of senior management, such as the General Manager

On 22nd April, 2002, the Company held the first extraordinary general meeting for 2002, Directors' meeting and Supervisors' meeting in which resolutions in relation to the election of directors and supervisors were passed, Chairman and Vice-chairman of the Board and Chairman of the Supervisory Committee were elected and senior management such as the general manager were appointed.

For details please refer to Wen Wei Po and South China Morning Post dated 23rd April, 2002.

5. Financial and Accounting Statements

(1) Financial Statements

1. Condensed consolidated balance sheet (unaudited)

Prepared by Yanzhou Coal Mining Company Limited	Unit: RMB million
	At the end of	At the beginning
Assets	the period	of the year
Assets
Current assets	3,631.397	3,370.833
Long-term investment	1.760	1.760
Total fixed assets	8,142.414	7,479.755
Intangible and other assets	752.303	497.875
Total assets	12,527.874	11,350.223
Liabilities
Current liabilities	2,183.824	2,518.449
Long-term liabilities	1,305.983	105.983
Total liabilities	3,489.807	2,624.432
Minority interest	3.120	2.463
Shareholders' equity	9,034.947	8,723.328
Total liabilities and shareholders' equity	12,527.874	11,350.223

1. Condensed consolidated statement of income (unaudited)

Prepared by Yanzhou Coal Mining Company Limited		Unit: RMB million
		During the period
	Item	under review
1.	Net revenue from principal operations	1,760.361
2.	Income from principal operations	1,039.846
	Add: Income from other operations	8.256
	Less: expenses during the period	582.325
3.	Operating profit	465.778
	Net non-operating income less expenses	0.076
4.	Profit before income tax	465.854
	Less: Income tax	153.578
5.	Net profit	311.619

(2) Notes to Financial Statements

1. There is no significant change in the accounting policy, accounting estimates and basis of consolidation of the financial statements when compared to the previous report.

2. There is no significant difference between the accounting policies adopted in the quarterly report and that of the annual results for the year ended 31st December 2001.

6. Documents Available for Inspection

The following documents will be available for inspection at the Office of the Secretary of the Board of Directors at 40 Fushan Road, Zoucheng, Shangdong Province, the PRC:

1. First Quarterly Report 2002 signed by the Chairman;

2. The accounting statements signed and sealed by the legal representative, financial controller and accounting officers;

3. Original copies of all documents and announcements of the Company disclosed in newspapers designated by China Securities Regulatory Commission during the period;

4. Articles of association; and

5. "Yanzhou Coal Mining Company Limited - First Quarterly Report 2002" published in the PRC.

Appendix

Consolidated balance sheet

(Prepared in accordance with PRC GAAP)

	As at March 31, 2002				As at December 31, 2001
	The Group		The Company			The Group		The Company
	RMB		RMB			RMB		RMB
	(Unaudited)		(Unaudited)			(Audited)		(Audited)
ASSETS
CURRENT ASSETS
Bank balance and cash	1,144,888,425		1,141,116,782			1,154,806,342		1,150,155,924
Short-term investments	49,997,305		49,997,305			49,997,305		49,997,305
Bills receivable	41,957,292		41,957,292			155,883,666		155,883,666
Accounts receivable	701,374,876		701,374,876			550,784,838		550,784,838
Other receivables	432,786,836		432,405,021			401,119,702		400,993,716
Prepayments	129,003,864		145,189,898			88,165,432		94,810,318
Value-added-tax refundable	419,145,249		419,145,249			419,145,249		419,145,249
Inventories	562,943,370		533,047,766			439,882,298		426,352,865
Deferred expenditures	149,300,248		149,300,248			111,048,395		111,048,395
TOTAL CURRENT ASSETS	3,631,397,465		3,613,534,437			3,370,833,227		3,359,172,276
Long-term equity investments	1,760,419		5,192,826			1,760,419		4,470,322
FIXED ASSETS
Fixed assets at cost	12,790,322,398		12,789,829,674			11,702,052,041		11,701,559,317
Less: Accumulated depreciation	4,922,627,886		4,922,463,566			4,492,985,894		4,492,836,855
Fixed assets, net	7,867,694,512		7,867,366,108			7,209,066,147		7,208,722,462
Construction materials	1,697,068		1,697,068			1,697,068		1,697,068
Construction in progress	273,021,955		273,021,955			268,991,536		268,991,536
TOTAL FIXED ASSETS	8,142,413,535		8,142,085,131			7,479,754,751		7,479,411,066
Intangible assets	752,302,517		752,302,517			497,874,780		497,874,780
TOTAL ASSETS	12,527,873,936		12,513,114,911			11,350,223,177		11,340,928,444
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable	247,655,000		247,655,000			275,860,000		275,860,000
Accounts payable	544,474,075		542,752,284			553,982,959		552,320,331
Advance from customers	39,442,422		33,556,120			122,908,153		122,794,582
Payroll payable	38,463,271		38,463,271			36,130,872		36,130,872
Dividend payable	287,000,000		287,000,000			287,000,000		287,000,000
Tax payable	158,005,948		157,574,619			104,422,929		103,629,887
Other payables	601,665,600		598,066,485			381,314,134		377,052,325
Accrued expenses	17,908,131		17,908,131			-		-
Provision for land subsidence costs	162,575,387		162,575,387			120,196,012		120,196,012
Long-term payables within one year	86,633,816		86,633,816			636,633,816		636,633,816
TOTAL CURRENT LIABILITIES	2,183,823,650		2,172,185,113			2,518,448,875		2,511,617,825
LONG-TERM LIABILITIES
Long-term loan	1,200,000,000		1,200,000,000			-		-
Long-term payables	105,983,040		105,983,040			105,983,040		105,983,040
TOTAL LONG-TERM LIABILITIES	1,305,983,040		1,305,983,040			105,983,040		105,983,040
TOTAL LIABILITIES	3,489,806,690		3,478,168,153			2,624,431,915		2,617,600,865
MINORITY INTEREST	3,120,488		-			2,463,683		-
SHAREHOLDERS' EQUITY
Share capital	2,870,000,000		2,870,000,000			2,870,000,000		2,870,000,000
Capital reserves	3,711,032,804		3,711,032,804			3,711,032,804		3,711,032,804
Surplus reserves	508,643,940		508,643,940			508,643,940		508,643,940
Including: Welfare fund	169,547,980		169,547,980			169,547,980		169,547,980
Unappropriated profits	1,945,270,014		1,945,270,014			1,633,650,835		1,633,650,835
TOTAL SHAREHOLDERS' EQUITY	9,034,946,758		9,034,946,758			8,723,327,579		8,723,327,579
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY	12,527,873,936		12,513,114,911			11,350,223,177		11,340,928,444

Statement of Income and Profits Appropriation

(Prepared in accordance with PRC GAAP)

	Three months ended March 31,
					2001
	2002		2002		The Group and
	The Group		The Company		the Company
	RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)
Net revenue from principal operations	1,760,361,148		1,760,361,148		1,446,143,243
Less: Cost of principal operations	687,837,928		690,328,484		643,737,587
Sales taxes on principal operations	32,677,576		32,656,812		37,163,474
Income from principal operations	1,039,845,644		1,037,375,852		765,242,182
Add: Income from other operations	8,256,443		7,366,103		3,802,423
Less: Operating expenses	364,179,559		362,779,976		335,263,957
Administrative expenses	207,538,880		207,307,936		163,769,450
Financial expenses	10,606,120		10,611,801		(9,728,060)
Operating profit	465,777,528		464,042,242		279,739,258
Add: Investment income	-		722,503		-
Non-operating income	1,584,868		1,584,868		114,601
Less: Non-operating expenses	1,508,833		1,502,520		1,802,287
Profit before income taxes	465,853,563		464,847,093		278,051,572
Less: Income taxes	153,577,579		153,227,914		74,911,402
Minority Interest	656,805		-		-
Net profit	311,619,179		311,619,179		203,140,170
Add: Unappropriated profits at the
beginning of the year	1,633,650,835		1,633,650,835		1,070,321,502
Profits available for appropriation	1,945,270,014		1,945,270,014		1,273,461,672
Less: Appropriation to statutory commom fund	-		-		-
Appropriation to public welfare fund	-		-		-
Profits available for appropriation to shareholders	1,945,270,014		1,945,270,014		1,273,461,672
Less: ordinary share dividend payable	-		-		-
Unappropriated profits	1,945,270,014		1,945,270,014		1,273,461,672

By order of the board of directors of

Yanzhou Coal Mining Company Limited

Mo Liqi

Chairman of the Board

Zoucheng, PRC, 29th April, 2002

Please also refer to the published version of this announcement in the South China Morning Post dated 30/4/2002