Shenwan Hongyuan Securities·2025-10-14 13:13Investment Rating - The report maintains an "Overweight" rating for the coal industry, indicating a positive outlook for the sector's performance relative to the overall market [32]. Core Insights - Domestic raw coal production increased by 2.8% year-on-year to 3.165 billion tons from January to August 2025, while coal imports fell by 11.1% year-on-year to 35 million tons from January to September 2025 [4][18]. - In Q3 2025, both thermal coal and coking coal prices rebounded, with the average price of 5500 kcal thermal coal at ports rising to approximately 673 CNY/ton, a 6.75% increase from Q2 2025, despite a 20.66% decrease year-on-year [4][23]. - Key companies in the coal sector are expected to report varying performance in their Q3 2025 earnings, with China Shenhua and Shaanxi Coal achieving better-than-expected results, while Shanxi Coking Coal and Huai Bei Mining are projected to meet expectations [4][25]. Supply and Demand Dynamics - The supply of coal remains tight due to production capacity checks, while demand is robust, leading to a rebound in coal prices during Q3 2025 [4][23]. - The report highlights that major coal-producing regions like Shanxi and Shaanxi have shown production increases, while Inner Mongolia experienced a slight decline [10][18]. Price Trends - The report details significant price fluctuations in coal types, with thermal coal prices showing a rebound in Q3 2025 compared to Q2 2025, while coking coal prices also saw increases due to supply constraints [21][24]. - The average price of Shanxi's main coking coal at the port was reported at 1564 CNY/ton, reflecting a 19.09% increase from Q2 2025, despite a year-on-year decrease [24]. Company Performance Forecast - The report provides earnings forecasts for key coal companies, indicating that China Shenhua is expected to report an EPS of 1.97 CNY, while companies like Shaanxi Coal and Shanxi Coking Coal are projected to have EPS of 1.29 CNY and 0.25 CNY, respectively [25]. - The report identifies companies with strong earnings potential, recommending investments in undervalued stocks such as Shanxi Coking Coal and Huai Bei Mining, while also suggesting stable dividend-paying stocks like China Shenhua and Shaanxi Coal [4][25].