YANCOAL AUSTRALIA LTD(03668.HK)：2025 RESULTS LARGELY IN LINE WITH EXPECTATIONS; UPBEAT ON VOLUME AND PRICE>EXPECTATIONS; UPBEAT ON VOLUME AND PRICE GROWTH

Core Viewpoint - Yancoal Australia reported a significant decline in attributable net profit for 2025, primarily due to falling coal prices, but the results were largely in line with expectations [1] Financial Performance - Attributable net profit fell 64% YoY to AUD0.44 billion, resulting in an EPS of AUD0.33 [1] - In 2H25, attributable net profit decreased 65% YoY to AUD277 million, although it increased 70% HoH [1] - Overall coal selling price dropped 17% YoY to AUD146 per tonne, with thermal coal at AUD136 per tonne (down 15% YoY) and coking coal at AUD203 per tonne (down 26% YoY) [2] Production and Costs - Equity-based commercial coal output rose 5% YoY to 38.6 million tonnes, achieving a record high [2] - Cash cost per tonne (excluding royalties) improved slightly, falling AUD1 YoY to AUD92, aligning with annual guidance of AUD89–97 [3] - Capital expenditure (Capex) increased 7% YoY to AUD751 million, at the lower end of the annual guidance of AUD0.75–0.9 billion [3] Dividend and Future Guidance - The proposed total dividend for 2025 is AUD0.18 per share, representing 55% of earnings per share [4] - Production and cost guidance for 2026 has increased, with equity-based thermal coal output expected at 36.5–40.5 million tonnes and cash cost per tonne projected at AUD90–98 [4] Market Outlook - Anticipated supply reductions, particularly in Indonesian coal exports, may lead to an increase in Australian coal prices, potentially improving the firm's earnings [5] - The 2026 earnings forecast remains largely unchanged, with a new 2027 earnings forecast introduced at AUD791 million [5] Valuation - The stock is currently trading at 10.0x 2026e and 9.5x 2027e P/E, with a maintained OUTPERFORM rating [5] - The target price has been raised by 21% to HK$35, implying a dividend yield of 5% for 2026, with an upside of 10% [6]