HTSC·2025-10-26 06:27Investment Rating - The report maintains a "Buy" rating for the company [6][4]. Core Insights - The company has demonstrated excellent cost control in coal and electricity, leading to improved performance on a quarter-over-quarter basis [1]. - The revenue for the first three quarters of 2025 was CNY 213.15 billion, a year-on-year decrease of 16.57%, while the net profit attributable to shareholders was CNY 39.05 billion, down 9.98% year-on-year [1]. - The report highlights a recovery in the monthly long-term contract ratio, which has positively impacted revenue and reflects strong cost management [2]. Revenue Summary - In Q3 2025, the coal segment revenue was CNY 55.20 billion, a year-on-year decline of 17.7%, but a quarter-over-quarter increase of 5.5% [10]. - The average selling price for coal in Q3 was CNY 502 per ton, down 10.3% year-on-year but up 4.5% quarter-over-quarter [10]. Cost and Profitability - The average cost of coal in Q3 was CNY 391.92 billion, with a gross margin of 28.99%, reflecting a year-on-year decrease of 5.72 percentage points [10]. - The company achieved a significant reduction in costs, with a 7.5% decrease in overall costs for the first three quarters of 2025, primarily due to lower material and operational expenses [10]. Profit Forecast and Valuation - The report slightly adjusts the forecast for net profit attributable to shareholders for 2025-2027, increasing estimates by 0.1%, 0.5%, and 0.2% to CNY 50.40 billion, CNY 50.67 billion, and CNY 50.76 billion respectively [4]. - The target price for A-shares is raised to CNY 51.30, reflecting an upward adjustment in valuation due to a decrease in equity risk premium [4][20]. Operational Metrics - The total electricity generation in Q3 was 641 billion kWh, a year-on-year decrease of 2.3%, while the total electricity sales were 602 billion kWh, down 2.5% year-on-year [3]. - The report notes a significant improvement in the gross margin for the electricity segment, reaching 24.2%, an increase of 8.5 percentage points year-on-year [3]. Market Position - The company’s market capitalization is reported at CNY 844.41 billion, with a closing price of CNY 42.50 as of October 24 [6]. - The report indicates a narrowing premium between A and H shares, now at 13.0% compared to the previous 17.8% [4].