Minsheng Securities·2025-10-09 12:27Investment Rating - The report maintains a "Buy" rating for the coal sector, with specific recommendations for several companies based on their performance and market conditions [4]. Core Insights - The upcoming safety production assessments are expected to lead to a contraction in coal supply, which may support a rebound in coal prices. Since July 2025, the monthly coal output has seen a year-on-year decline of over 3%, and the anticipated inspections may further tighten supply [1][2]. - The coal price has shown signs of recovery, stabilizing above 700 RMB/ton by the end of September 2025. The report predicts that by the end of the year, coal prices could exceed 900 RMB/ton due to supply constraints and increased demand from the coal chemical sector [2]. - The report highlights several investment opportunities within the sector, particularly focusing on companies with high spot market exposure and those expected to benefit from supply-demand dynamics [2]. Summary by Sections Supply and Demand Dynamics - The safety inspections scheduled for November 2025 are likely to impact coal supply negatively, reinforcing expectations of reduced output. This is particularly relevant as the country transitions into the heating season, which typically sees increased demand [1][2]. - The report notes that the coal chemical sector is poised to benefit from the seasonal demand increase, providing additional support for coal prices [2]. Company Recommendations - The report recommends specific companies based on their market positioning and expected performance: 1. High Spot Market Exposure: Lu'an Huanneng (潞安环能) is highlighted for its significant elasticity in response to price changes. 2. Stable Growth Companies: Jin控煤业 (晋控煤业) and Huayang Co., Ltd. (华阳股份) are recommended for their robust performance. 3. Recovery in Production: Shanmei International (山煤国际) is noted for its potential production recovery. 4. Industry Leaders: China Shenhua (中国神华), Zhongmei Energy (中煤能源), and Shaanxi Coal (陕西煤业) are recognized for their stable earnings [2][4].