HTSC·2025-03-03 02:35Investment Rating - The report maintains an "Overweight" rating for the energy sector, specifically for coal [6]. Core Insights - The coal industry is expected to stabilize as a result of self-regulatory initiatives aimed at balancing supply and demand, with a focus on high long-term contract ratios and integrated leading companies [1][4]. - The recent joint initiative by the China Coal Industry Association and the Coal Transportation and Sales Association emphasizes controlling coal production and optimizing import structures to address the current supply-demand imbalance [2]. - Short-term coal prices are under pressure due to slow downstream recovery and high inventory levels, but signs of bottoming out are emerging [3][4]. Summary by Sections Industry Self-Regulation - The coal industry associations have proposed five key measures to adjust supply and maintain market balance, including strict adherence to long-term contracts and controlled production [2]. Market Conditions - Post-Spring Festival, the coal market continues to face weakness, with a national construction site resumption rate of only 23.5% as of the 16th day of the lunar new year, significantly lower than the previous year [3]. - As of the end of February, the price of CCI 5,500 kcal thermal coal has dropped by 62 CNY/ton to 699 CNY/ton, nearing the monthly long-term contract pricing [3]. Long-term Outlook - The report anticipates high growth in electricity demand driven by new technologies, which will support coal demand and prices, with projections of coal prices stabilizing around 730 CNY/ton in 2025 and potentially reaching 800 CNY/ton in 2026 [4]. - Companies with high long-term contract sales ratios and stable downstream demand, such as China Shenhua, Shaanxi Coal, and China Coal Energy, are recommended for investment due to their resilient profitability [4][8].