Core Viewpoint - CICC has downgraded Yancoal Australia (03668) 2025E earnings by 11.5% to AUD 473 million due to increased cost assumptions, while maintaining 2026E earnings largely unchanged. The current stock price corresponds to 14.4x/8.9x 2025/26E P/E. The valuation has been switched to 2026, maintaining an outperform rating and target price of HKD 29, implying an 8% upside potential [1]. Group 1 - Q3 2025 production decline: The equity coal production was approximately 9.3 million tons, down 9% YoY and 2% QoQ, primarily affected by rainfall disruptions, but overall within the company's expectations [1]. - Q3 2025 sales increase: The self-produced coal equity sales were approximately 10.7 million tons, up 3% YoY and 31% QoQ, with thermal coal equity sales at 9 million tons, flat YoY and up 33% QoQ, and coking coal equity sales at 1.6 million tons, up 17% YoY and 22% QoQ. The significant QoQ increase in sales was mainly due to the delivery of sales delayed from Q2 2025 due to weather [1]. - Q3 2025 price decline: The average selling price of self-produced coal was AUD 140 per ton, down 18% YoY and 1.4% QoQ. Thermal coal price was AUD 130 per ton, down 17% YoY, while remaining flat QoQ. Coking coal price was AUD 195 per ton, down 25% YoY and 1% QoQ. The company's coal prices were weaker than market prices due to shipment delays, lagging sales prices, and the depreciation of the AUD against the USD [1]. Group 2 - Cash position: As of Q3 2025, the company maintained a relatively strong cash balance of AUD 1.8 billion [1]. - 2025 production guidance: The company maintains its 2025 guidance of 35-39 million tons of equity coal production, expecting to be close to the upper end of the range, with cash operating costs of AUD 89-97 per ton [2]. - Cost impact from weather: The company indicated that the rainfall in Q3 and shipment delays in Q2 led to additional demurrage fees, increasing costs. However, this impact is expected to dissipate as coal transportation normalizes. The overall coal prices in Q4 2025 are anticipated to improve due to better supply-demand dynamics [3].
中金：维持兖煤澳大利亚(03668)跑赢行业评级 目标价29港元