A coal-to-oil plant in Changzhi, in Shanxi province. Photo: AFP/Fred Dufour

Shanxi province has been urged by the State Council to increase the intensity of state-owned enterprises’ mixed ownership reform. The seven coal giants in the province are expected to lead the SOE’s reforms, the Securities Daily reported.

Since most of the seven coal giants’ assets haven’t turned into securities, analysts think they are likely to kick off the reforms from their 13 publicly listed subsidiaries.

“Those listed companies can either complete the acquisition of their parent companies so as to go public as a whole group, or serve as a platform to digest the parent company’s asset injection,” said Ye Xiaomei, an analyst from Tianfeng Securities.

Despite the continuously increasing coal price from last year, the profitability of the seven coal giants remains slack. Meanwhile, the average debt ratio is higher than 80%.

By the end of 2016, the seven coal giants’s annual revenue stood at 936.6 billion yuan, a 14% decrease from a year earlier. The total net profit loss recorded was 3.46 billion yuan.