Investment Rating - The industry investment rating is "Recommended" (maintained) [1] Core Viewpoints - The report indicates a slight adjustment towards market-oriented policies in the long-term coal supply contracts for 2026 compared to 2025, with both quantity and price aspects moving closer to market mechanisms [2][7] - The signing volume for coal enterprises is set to be no less than 75% of their own resource volume, while for power generation enterprises, the minimum signing volume should be at least 80% of the demand [2] - The fulfillment rates have been relaxed slightly, with monthly fulfillment remaining at no less than 80%, quarterly fulfillment now being generally no less than 90%, and annual fulfillment also generally no less than 90% [2] - The pricing mechanism for long-term contracts may begin to reference indices, with a monthly adjustment mechanism established for the pricing of coal from production areas [3][4] - The report emphasizes that the coal mining industry continues to show a long-term upward price trend driven by factors such as rising labor costs, increased safety and environmental investments, and higher taxation by local governments [8] Summary by Sections Policy Changes - The 2026 policy document indicates that contracts for coal from production areas must align with reasonable price ranges and establish a monthly adjustment mechanism through negotiation between supply and demand enterprises [3] - The pricing for long-term contracts for coal remains unchanged, with a base price set at current levels [4] Market Performance - As of November 19, 2025, the coal mining sector has shown a performance of 2.3% over one month, 11.3% over three months, and 0.2% over twelve months, compared to the Shanghai and Shenzhen 300 index which recorded 1.6%, 8.6%, and 15.4% respectively [5] Investment Recommendations - The report suggests focusing on robust companies such as China Shenhua, Shaanxi Coal, and others, highlighting their strong cash flow and high asset quality [8] - Specific recommendations include: - Steady stocks: China Shenhua, Shaanxi Coal, and others - Stocks with greater elasticity in thermal coal: Yanzhou Coal, Jinko Energy, and others - Stocks with greater elasticity in coking coal: Huaibei Mining, Pingdingshan Coal, and others [8] Earnings Forecasts - The report provides earnings per share (EPS) and price-to-earnings (PE) ratios for key companies, indicating a positive outlook for several coal enterprises [10]

Market Overview - The Shanghai Composite Index fell by 0.40% on November 20, with 7 industries experiencing gains, led by construction materials and comprehensive sectors, which rose by 1.40% and 0.87% respectively [1] - The coal industry saw a decline of 2.10%, ranking second in terms of the largest drop [1] Capital Flow - The main capital outflow from both markets totaled 47.655 billion yuan, with only 4 industries seeing net inflows [1] - The banking sector led the net inflow with 2.188 billion yuan, followed by the communication sector with a net inflow of 1 billion yuan [1] Coal Industry Analysis - The coal industry experienced a net outflow of 675 million yuan, with 37 stocks in the sector; only 2 stocks rose while 35 fell, including 1 stock hitting the daily limit down [2] - The top three stocks with the highest net outflow in the coal sector were Shaanxi Coal and Chemical Industry (987.269 million yuan), Yongtai Energy (881.709 million yuan), and Meijin Energy (826.157 million yuan) [2][3] - The stock with the highest net inflow was Huaibei Mining, with an inflow of 30.667 million yuan [2]

Investment Rating - The report maintains an investment rating of "Leading the Market - A" for the coal industry [1][13]. Core Viewpoints - The 2026 medium- and long-term coal supply contract plan aligns with expectations, with a slight relaxation in performance requirements. The plan continues the mechanism established in the 2022 contracts, which was a significant adjustment from the previous five-year mechanism [1][2]. - The pricing mechanism for coal contracts has been adjusted to include a monthly price adjustment mechanism for production area contracts, while the port benchmark price remains unchanged at 675 RMB/ton [3][10]. - The report suggests that with the implementation of "anti-involution" policies, the expected increase in domestic coal supply is limited, leading to a recovery in coal prices and improved performance in long-term contracts [3][6]. Summary by Sections Contract Signing Requirements - For power companies, the signing demand should not be less than 80% of the required amount, with 80% of these contracts under key regulatory oversight. For coal companies, the task volume should not be less than 75% of their own resource volume [2][10]. Pricing Mechanism - The production area contracts will now have a monthly price adjustment mechanism, with the benchmark price set based on the reasonable price range for coal production in Shanxi, Shaanxi, and Inner Mongolia. The floating price will be determined by various indices [3][10]. Performance Supervision - The contract performance requirements have been relaxed, with monthly performance rates required to be no less than 80%, and quarterly and annual rates should generally not be less than 90%. There is an emphasis on increasing performance during peak seasons [3][10]. Investment Recommendations - The report highlights several companies with significant recovery potential, including Jin控煤业, 华阳股份, 山煤国际, 兖矿能源, 陕西煤业, 中煤能源, and 中国神华 [6].

Core Viewpoint - Huayang Co., Ltd. has experienced a decline in stock price recently, with a year-to-date increase of 19.89% and a notable drop of 6.23% over the last five trading days [1] Group 1: Stock Performance - As of November 20, Huayang's stock price was 8.13 CNY per share, with a market capitalization of 29.329 billion CNY [1] - The stock has seen a trading volume of 3.27 billion CNY, with a turnover rate of 1.10% [1] - Year-to-date, the stock has risen by 19.89%, but has decreased by 6.23% in the last five trading days [1] Group 2: Financial Performance - For the period from January to September 2025, Huayang reported operating revenue of 16.956 billion CNY, a year-on-year decrease of 8.85% [2] - The net profit attributable to shareholders was 1.124 billion CNY, reflecting a year-on-year decline of 38.20% [2] Group 3: Shareholder Information - As of November 10, the number of Huayang's shareholders was 87,000, a decrease of 3.33% from the previous period [2] - The average circulating shares per person increased by 3.45% to 41,465 shares [2] - The company has distributed a total of 12.93 billion CNY in dividends since its A-share listing, with 5.814 billion CNY distributed in the last three years [3]

Investment Rating - The report maintains a positive outlook on the coal industry, suggesting a "Buy" rating for specific stocks based on their performance relative to the market [3][29]. Core Insights - The report highlights that the coal prices are expected to rise due to supply constraints and seasonal demand, particularly in the context of winter heating needs [3][4]. - It emphasizes the impact of environmental regulations and safety inspections on coal production, which are likely to tighten supply further [3][7]. - The report identifies several companies as potential investment opportunities, including Jin控煤业, 华阳股份, and 山煤国际, based on their price elasticity and valuation [3][4]. Summary by Sections 1. Recent Industry Policies and Dynamics - The report discusses the initiation of the third round of central ecological environment protection inspections, which will affect major coal-producing regions and companies [7]. - It mentions the State Energy Administration's guidance on integrating coal with renewable energy, focusing on low-carbon transitions and new energy developments in mining areas [7]. 2. Price Trends of Coal - The report notes fluctuations in domestic coal prices, with specific increases in certain regions, such as a rise of 10 CNY/ton in Dazhou and Ordos [8]. - The overall coal price index in the Bohai Rim region has increased by 4 CNY/ton, indicating a general upward trend in coal prices [8]. 3. International Oil Prices - Brent crude oil prices have risen by 1.19% to 64.39 USD/barrel, which may influence coal prices due to the relationship between oil and coal markets [14]. 4. Port Inventory Trends - The report indicates an increase in coal inventory at the Bohai Rim ports, with a total of 24.3 million tons, reflecting a 2.56% rise week-on-week [18]. 5. Domestic and International Freight Rates - Domestic coastal shipping rates have increased slightly, with an average of 51.52 CNY/ton, while international shipping rates from Australia to China have also seen a rise [23]. 6. Key Company Valuation Table - The report provides a detailed valuation table for key companies in the coal sector, highlighting their stock prices, market capitalization, and earnings projections [28].

Investment Strategy Overview - The report highlights the resurgence of resource nationalism driven by de-globalization, emphasizing coal's strategic importance for national energy security. Major coal-producing countries like Indonesia, Mongolia, and the USA are tightening control over coal resources, integrating them into national strategies to bolster energy independence and support domestic industrial and power needs [3][4][5]. Supply Side Analysis - The coal industry is undergoing a significant restructuring, with safety and environmental regulations leading to a more rational supply order. The release of production capacity is expected to be steady but cautious, promoting high-quality development in the coal sector [3][4]. - Domestic supply costs are rising, and coal imports are tightening marginally due to increased scrutiny and regulations [4][32]. Demand Side Analysis - The report anticipates a stable and slight increase in overall coal demand, driven by the rigid growth in electricity consumption and the irreplaceable role of coal in peak regulation and energy security. The expected price range for thermal coal in 2026 is projected to be between 750-800 RMB per ton [3][4][29]. - The resilience of coal power generation is highlighted, particularly in the context of fluctuating renewable energy output, indicating that coal will continue to play a crucial role in the energy mix [3][4]. Investment Recommendations - The report recommends investing in stable, high-dividend companies such as China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy. It also suggests paying attention to companies with price elasticity like Jinkong Coal Industry, Huayang Co., Tebian Electric Apparatus, and Shanxi Coal International [3][4]. - Growth-oriented companies in coal-electricity joint ventures, such as Xinji Energy, are also recommended for consideration [3][4]. Regional Insights - Indonesia's coal production is expected to decline in 2025 due to new resource tax regulations, which will increase export costs and support domestic coal prices [11][12]. - Mongolia's coal production and sales are affected by ongoing political instability, impacting the stability of coal imports [17][18]. - The USA is implementing favorable policies to revitalize its coal industry, including reducing royalty rates and increasing federal land available for coal exploration [21][22]. Future Capacity and Production Trends - Future coal production capacity is expected to be limited, with only about 67 million tons of new capacity projected over the next three years. The focus is shifting towards regions like Xinjiang, which has significant coal reserves and favorable mining conditions [61][67]. - The report notes that the overall coal production in China is unlikely to see significant growth in 2026 due to ongoing safety inspections and regulatory measures [51][53].

Group 1 - The stock price of Huayang Co., Ltd. increased by 2.03% on November 17, reaching 8.54 CNY per share, with a total market capitalization of 30.808 billion CNY [1] - Year-to-date, Huayang's stock price has risen by 25.94%, but it has decreased by 2.06% in the last five trading days [1] - The company has appeared on the "Dragon and Tiger List" once this year, with a net purchase of 159 million CNY on March 25 [1] Group 2 - Huayang Co., Ltd. was established on December 30, 1999, and listed on August 21, 2003, primarily engaged in coal production, electricity generation, and solar power [2] - The main revenue sources for Huayang include raw coal (52.34%), washing coal (9.84%), and electricity supply (7.39%) [2] - As of November 10, the number of shareholders decreased by 3.33% to 87,000, while the average circulating shares per person increased by 3.45% to 41,465 shares [2] Group 3 - Huayang Co., Ltd. has distributed a total of 12.93 billion CNY in dividends since its A-share listing, with 5.814 billion CNY distributed in the last three years [3] - As of September 30, 2025, the second-largest shareholder is Guotai Zhongxin Coal ETF, holding 71.3342 million shares, an increase of 43.3179 million shares from the previous period [3] - The top ten circulating shareholders include various ETFs and mutual funds, with notable changes in holdings among them [3]

Investment Rating - The report maintains a "Recommended" rating for the coal mining industry [2] Core Viewpoints - The coal price is expected to remain stable and slightly strong, with the northern port coal price reaching 834 RMB/ton, an increase of 17 RMB/ton week-on-week, as the industry anticipates an increase in daily consumption during the winter peak season [4][14][71] - The supply-demand balance in the coal market remains favorable, with stable production and a slight increase in port inventories, while non-electric demand from sectors like metallurgy and chemicals continues to support coal consumption [5][14][71] - The report highlights the investment value of coal companies, particularly those with strong cash flows and high dividend yields, amidst market volatility and external economic pressures [7][73] Summary by Sections 1. Thermal Coal - The northern port thermal coal price increased to 834 RMB/ton, with production capacity utilization in the Sanxi region stable at 89.79% [14][21] - Daily consumption at coastal and inland power plants showed a week-on-week change of -8.0 and +12.3 thousand tons, respectively, indicating a recovery phase [14][24] - The report notes a decrease in coal imports due to rising prices and lower acceptance from downstream users, while supply constraints from Indonesia and Russia are expected to limit import availability [14][71] 2. Coking Coal - Coking coal production capacity utilization increased by 0.37 percentage points to 84.2%, driven by recovery in some mines in Shanxi [5][72] - The average customs clearance volume at Ganqimaodu port rose to 1,366 trucks, indicating stable supply [5][72] - The report anticipates that despite short-term market sentiment fluctuations, coking coal prices will remain stable due to low production and inventory levels [6][72] 3. Coke - The supply-demand balance for coke remains stable, with some steel mills accepting a price increase of 50-55 RMB/ton, effective from November 15 [6][51] - The report indicates that independent coking plants have seen a decrease in production rates, while iron output has increased, supporting demand for coke [6][58] 4. Investment Focus - The report emphasizes the importance of focusing on robust coal companies such as China Shenhua, Shaanxi Coal, and Yanzhou Coal, which exhibit strong fundamentals and growth potential [7][9][73] - It suggests that investors should consider the value attributes of the coal sector, particularly in light of ongoing market dynamics and regulatory changes [7][73]

Investment Rating - The investment rating for the coal industry is "Positive" (maintained) [1] Core Viewpoints - The report indicates that the price of thermal coal has surpassed the target of 800 yuan, with the current price at 834 yuan per ton as of November 14, reflecting a slight increase. The price at Guangzhou Port has reached 880 yuan, achieving the previously set target of 750 yuan for coal-electricity profit sharing. The price increase is attributed to supply contraction and a surge in demand due to the northern cold wave [3][4] - The report outlines that the price of coking coal has rebounded significantly from a low of 1230 yuan in July to 1860 yuan per ton as of November 14, with a notable increase in futures prices as well [3][4] - The investment logic suggests that both thermal and coking coal prices are at a turning point, with thermal coal prices expected to follow a four-step recovery process, ultimately reaching a balance point around 860 yuan [4][13] Summary by Sections Investment Logic - Thermal coal is categorized as a policy-driven commodity, with price recovery expected to follow a structured process involving the restoration of long-term contracts and achieving profit-sharing targets. The ideal target price for coal-electricity profit sharing is projected to be around 750 yuan for 2025, with an anticipated price range of 800-860 yuan [4][13] - Coking coal prices are more influenced by market dynamics, with target prices linked to the ratio of coking coal to thermal coal prices. The current ratio suggests target prices for coking coal at 1608 yuan, 1680 yuan, 1800 yuan, and 2064 yuan corresponding to thermal coal's price targets [4][13] Investment Recommendations - The report identifies four main investment lines in the coal sector: 1. **Cyclical Logic**: Companies like Jinko Coal and Yanzhou Coal Mining are highlighted for their potential in thermal coal. 2. **Dividend Logic**: Companies such as China Shenhua and China Coal Energy are noted for their strong dividend potential. 3. **Diversified Aluminum Elasticity**: Companies like Shenhua Holdings and Electric Power Investment are mentioned. 4. **Growth Logic**: New Energy and Guanghui Energy are recognized for their growth potential [5][14] Key Market Indicators - The coal index experienced a slight decline of 0.96%, outperforming the CSI 300 index by 0.12 percentage points. The average PE ratio for the coal sector is reported at 15.9, while the PB ratio stands at 1.42, indicating a relatively low valuation compared to other sectors [8][26][30]

Investment Rating - The industry rating is "Positive" [1] Core Viewpoints - The report indicates that the coal consumption is approaching a turning point, with a clear direction and potential for growth. The recent cold wave is expected to increase coal demand as power plants will need to procure more coal, leading to a potential rise in coal prices [6][29] - The report highlights that the average daily coal sales from monitored enterprises increased by 2.7% week-on-week but decreased by 2.4% year-on-year, indicating a mixed demand scenario [2] - The report suggests that the supply-demand balance is expected to gradually improve in the fourth quarter, with coal prices likely to rise steadily [6][29] Summary by Sections Coal Market Performance - The coal sector underperformed slightly, with a decline of 0.78% compared to a 1.08% drop in the CSI 300 index, outperforming it by 0.3 percentage points [2] - The average daily coal production from monitored enterprises was 752 million tons, a 2% increase week-on-week but a 2.2% decrease year-on-year [2] Price Trends - The price of thermal coal (Q5500K) in the Bohai Rim region was 698 RMB/ton, up 0.58% week-on-week, while the import price index for thermal coal was 944 RMB/ton, up 6.19% week-on-week [3] - Coking coal prices also saw increases, with the main coking coal price at 1830 RMB/ton, up 1.7% week-on-week [4] Inventory Levels - Total coal inventory (including port storage) was 24.3 million tons, a 2.1% increase week-on-week but a 19.5% decrease year-on-year [2][8] - The report notes that the overall coal inventory in society was 17.68 million tons, with a week-on-week increase of 374,000 tons but a year-on-year decrease of 873,000 tons [3][28] Investment Recommendations - The report recommends focusing on flexible thermal coal companies and those in turnaround situations in coking coal and coke sectors. Key companies to watch include China Shenhua, Shaanxi Coal and Chemical Industry, and Yanzhou Coal Mining [6][29]