
Investment Rating - The investment rating for the coal industry is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes the potential for coal investments due to the expected recovery in domestic demand amid escalating trade tensions. The coal market is viewed as a defensive asset class, particularly in light of the current economic environment and monetary policy shifts [3][4][13]. - The coal prices have stabilized at ports, with CCTD thermal coal Q5500 priced at 676 CNY/ton, remaining unchanged week-on-week. The report notes that the market sentiment is improving as inventory issues begin to ease [3][4]. - The report outlines several factors that could support a rebound in coal prices, including the long-term contract price ceiling, the maintenance of the annual contract system, and the linkage between coal and electricity prices [3][4]. Summary by Sections Investment Logic - The coal sector is entering a "Golden Era 2.0," with core value assets expected to rise again. The current weak domestic economy and external pressures from U.S. tariffs create a favorable environment for coal as a stable dividend investment [4][13]. - The cyclical nature of coal stocks is highlighted, with both thermal and coking coal prices at low levels, suggesting potential for recovery as supply-demand fundamentals improve [4][13]. Key Market Indicators - The report provides a snapshot of key indicators, noting that the coal sector has underperformed the CSI 300 index by 2.17 percentage points, with a weekly decline of 5.04% [8][10]. - The current PE ratio for the coal sector is 10.2, and the PB ratio is 1.16, indicating relatively low valuations compared to other sectors [10][14]. Coal Price Trends - Port coal prices have remained stable, with the Qinhuangdao port price holding steady. The report notes a slight increase in prices at some production sites, indicating a mixed market response [3][4][16]. - The report also highlights the international coal price trends, with Newcastle prices showing slight increases, while domestic prices remain competitive against imports [16][17]. Supply and Demand Dynamics - As of April 6, the operating rate of coal mines in Shanxi, Shaanxi, and Inner Mongolia was 81.7%, a slight decrease from the previous week. Coastal power plants' daily coal consumption has also seen a minor decline [3][4][16]. - The report indicates that non-electric coal demand is showing signs of improvement, with methanol and urea production rates increasing, which may further support coal inventory reduction [3][4][16]. Company Performance and Recommendations - The report lists several coal companies with strong dividend potential and cyclical recovery prospects, including China Shenhua, Shaanxi Coal, and China Coal Energy, among others [4][14][18]. - The report suggests that the coal sector is likely to see increased capital inflows as institutional investors recognize the current valuation as a bottoming opportunity [4][13].