Core Viewpoint - The report from BOC International indicates that steel mill profitability continues to be under pressure, which is expected to lead to a further decline in coking coal prices in the short term. However, due to a strong increase in July, the baseline coking coal price forecast for 2025 to 2027 has been raised by 7% to 13% [1] Industry Summary - The current valuation level of the domestic coal sector is deemed unattractive, leading to a "neutral" rating for the industry [1] - The forecast for the average spot coal price for the entire year has been revised down by 4% due to disappointing price levels in the second quarter [1] Company Summary - China Coal Energy (01898) has had its rating downgraded to "sell" as the company is expected to record negative free cash flow this year, and management appears unwilling to increase the dividend payout ratio. The forecasted dividend yield for 2025 to 2027 is only 3.7% to 3.9%. The target price has been reduced from HKD 7.39 to HKD 7.21, and earnings forecasts for 2025 to 2027 have been cut by 10% to 16% [1] - China Shenhua Energy (01088) demonstrated resilient profitability in its interim results, with the unit profit decline in its coal business being the smallest during the coal price drop in the first half of the year. The rating is maintained at "hold," with the target price increased from HKD 32.18 to HKD 39.48 [1]