Summary of Conference Call on Coal Industry and Company Insights Industry Overview - The coal industry is experiencing widespread overproduction, particularly during price surges in 2020 and 2022. However, with a decline in coal prices expected post-2024, overproduction incentives are weakening, especially for state-owned and compliant enterprises by 2025 [1][2][3]. - The government aims to control coal production to address safety and environmental issues, promote healthy industry development, and facilitate price rebounds. This includes accelerating the exit of non-compliant small coal mines and increasing the proportion of high-quality state-owned capacity [1][3]. - Recent safety incidents have led to temporary shutdowns of some coal mines, tightening supply and increasing procurement pressure. However, conditions have improved since mid-September [1][5]. Key Points on Coal Prices and Demand - Anticipated winter coal demand from coal chemical enterprises is expected to drive up prices. The rebound in coal prices is attributed to reduced supply and increased downstream demand, including from chemical companies and residential heating needs [1][7][8]. - The coal chemical industry is projected to see a peak in construction and production from 2025 to 2028, with a significant increase in coal demand during this period [1][9]. - Raw material price declines have improved profitability for coal chemical companies, leading to increased operational rates and higher procurement needs. For instance, the price of hydrogenated coal has risen to approximately 600 RMB/ton, with most companies remaining profitable [1][10]. Production and Regulatory Insights - The coal industry is under strict regulatory measures, with expectations for continued enforcement through 2025 and the first half of 2026. The port price thresholds are defined: prices below 650 RMB are considered green, around 800 RMB are at breakeven, and prices above 900-1,000 RMB require strict control [2][16]. - The seasonal production patterns are influenced by factors such as the Lunar New Year, where many mines reduce output, leading to a typical recovery in March [3]. - The coal chemical sector maintains a safety stock of 5-7 days, increasing to at least 10-15 days during winter to mitigate uncertainties related to mine shutdowns and transportation issues [6]. Future Projections and Market Dynamics - From 2024 to 2025, the coal chemical industry is expected to recover, with many previously loss-making companies achieving breakeven or profitability due to lower raw material costs. This has led to a 10-15% increase in operational rates and procurement needs [9][10]. - Predictions indicate a price increase of 50-60 RMB/ton during the winter storage period, with some varieties potentially rising by 100 RMB/ton [11][13]. - The current regulatory environment is focused on safety and environmental compliance rather than merely maximizing production, reflecting a shift in policy priorities [20][21]. Company-Specific Insights - The company has conducted internal audits regarding overproduction and has not identified significant violations, committing to adhere to safety and environmental regulations while adjusting production plans based on market demand [4]. - The company’s coal supply is fixed annually and monthly, primarily to meet long-term contracts and internal needs. Recent shutdowns have strained procurement, reducing supply capacity significantly during peak demand periods [5][17]. Conclusion - The coal industry is navigating a complex landscape of regulatory scrutiny, fluctuating prices, and evolving demand dynamics. The focus on safety and environmental standards is reshaping operational strategies, while the anticipated recovery in coal chemical profitability presents new opportunities for growth in the coming years [1][3][21].

Group 1: Coal Market Overview - Coal prices have stabilized and rebounded, with expectations for continued upward momentum due to improving fundamentals [1] - Domestic coal prices have shown a consistent increase, while port coal prices have stabilized and rebounded during the week [1] - Supply-side analysis indicates a reduction in excess production capacity of approximately 230 million tons due to production inspections, with an additional 400 million tons of production halted due to lack of approval for capacity increases [1] Group 2: Demand Dynamics - Current demand for thermal coal is transitioning into the off-season, but non-electric demand is expected to gradually release, particularly in the upcoming "Golden September and Silver October" period [1] - Coal chemical consumption has maintained a year-on-year growth rate of over 10% since the beginning of the year, increasing to over 15% since May [1] - Policies aimed at eliminating outdated capacity in the refining industry are expected to enhance the competitiveness of coal chemicals against oil-based chemicals, thereby supporting new demand for coal [1] Group 3: Inventory and Pricing Trends - Port inventories have decreased due to production cuts, leading to a seasonal destocking effect, although there remains a significant imbalance in shipping [1] - Current coal prices are around 700 yuan per ton, with traders showing low purchasing sentiment due to the transition between peak and off-peak seasons [1] - The combination of declining port inventories and continued supply contraction under production restrictions is expected to support a sustained increase in coal prices, potentially returning to levels seen in Q3 2024 [1] Group 4: Coking Coal Market Insights - Coking coal prices are expected to remain weak and stable in the short term, with supply recovering as previously halted mines resume production [2] - The first round of coking coal price reductions has compressed profit margins, and steel mills are primarily purchasing based on demand without significant improvement in terminal demand [2] - Anticipated supply reductions due to production inspections and the upcoming peak season suggest potential upward price movement for coking coal [2] Group 5: Investment Recommendations - Investment recommendations include focusing on high spot price elasticity stocks, such as Lu'an Environmental Energy, and stable growth stocks like Jinko Coal and Huayang Co., Ltd. [2] - Companies expected to benefit from production recovery include Shanxi Coal International, while industry leaders with stable performance include China Shenhua, China Coal Energy, and Shaanxi Coal and Chemical Industry [2] - Additionally, companies benefiting from nuclear power growth, such as CGN Mining, are highlighted as strong investment opportunities [2]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, indicating challenges in the coal market and the impact of price drops on profitability [1][4]. Financial Performance - In H1 2025, the company achieved revenue of 14.069 billion yuan, a year-on-year decrease of 20.31% - The net profit attributable to shareholders was 1.348 billion yuan, down 39.44% year-on-year - The non-recurring net profit was 1.147 billion yuan, reflecting a 49.00% year-on-year decline [1]. Production and Sales - The company increased the production and sales of blown coal to mitigate the impact of price declines on profits - In H1 2025, the company reported sales revenue from commodity coal of 13.04 billion yuan, a decrease of 22.3% year-on-year - The gross margin for commodity coal was 38.4%, down 7.2 percentage points year-on-year - The company produced 28.63 million tons of raw coal, an increase of 3.5% year-on-year, and sold 25.25 million tons of commodity coal, up 2.9% year-on-year - The average selling price of commodity coal was 516.2 yuan/ton, a decrease of 167 yuan/ton year-on-year [2][4]. Strategic Adjustments - The company is closing small loss-making coal mines to reduce losses - The company announced the closure of the Xidong Coal Mine, which had been operating since June 30, 2015, with a certified capacity of 600,000 tons/year but produced less than 300,000 tons/year due to resource constraints - The mine reported losses of 210 million yuan, 300 million yuan, and 75 million yuan from 2022 to 2024, with a continued reduction in losses in H1 2025 to 1.6 million yuan [3][4]. Market Outlook - The coal market is under pressure, but the company maintained stable production and sales - National safety production measures and adverse weather conditions have slowed the resumption of coal production, potentially limiting supply increases in the second half of the year - The demand for coal is expected to rise during the peak summer season, with a recovery in thermal power demand and a decrease in hydropower contributions - The company anticipates a gradual improvement in performance due to the recovery of coal prices from their lows [4]. Profit Forecast - The company adjusted its profit forecasts for 2025-2027, estimating net profits of 2.48 billion yuan, 2.946 billion yuan, and 3.250 billion yuan, respectively - The price-to-earnings ratios for these years are projected to be 15.7, 13.2, and 12.0 times, respectively [4].

Core Viewpoint - The article reaffirms the view that coal prices may not experience a typical seasonal decline, suggesting that the current market conditions indicate a potential for sustained price strength rather than a short-term rebound [1] Group 1: Market Conditions - Current factors such as sustained high load and reduced import volumes are contributing to an improvement in the coal market fundamentals [1] - The potential for supply shocks due to "overproduction" could further support the momentum for coal price rebounds [1] Group 2: Future Outlook - The anticipated potential interest rate cuts by the Federal Reserve in the second half of 2025 may provide additional benefits to the coal market [1] - Companies with high market share and stable profitability in the thermal coal sector are expected to be the primary beneficiaries of these market dynamics [1] Group 3: Investment Recommendations - It is suggested to focus on companies that exhibit stable cash flows and high dividend payout ratios within the thermal coal industry [1]

Report Summary 1. Report Industry Investment Rating No information provided in the given content. 2. Core Viewpoints of the Report The report objectively reflects the research views of futures and securities companies on various commodity varieties, tracks hot - spot varieties, analyzes market investment sentiment, and summarizes investment driving logics. It presents the market mainstream views on different asset classes, including their price changes and the corresponding multi - and short - term logics[2]. 3. Summary by Related Catalogs 3.1 Market Price Data - **Commodities**: From August 11 to August 15, 2025, palm oil had the highest weekly increase of 5.11% at a closing price of 9460.00; while gold had the largest weekly decline of 1.52% at a closing price of 775.80. Other commodities like polysilicon, bean meal also showed varying degrees of increase or decrease[3]. - **Stocks**: A - shares (CSI 500, SSE 50, etc.), overseas stocks (Nikkei 225, S&P 500, etc.) generally showed an upward trend. For example, CSI 500 increased by 3.88%[3]. - **Bonds**: Chinese 10 - year government bonds increased by 2.36%, while 2 - year government bonds decreased by 0.26%[3]. - **Foreign Exchange**: The euro against the US dollar increased by 0.54%, while the US dollar index decreased by 0.43%[3]. 3.2 Commodity Views 3.2.1 Macro - Financial Sector - **Stock Index Futures**: Among 8 institutions, 4 were bullish, 1 was bearish, and 3 expected a sideways trend. Bullish factors included increased trading volume in the stock market, favorable policies, and improved liquidity. Bearish factors were potential over - heating in some indices and high A - share valuations[5]. - **Treasury Bond Futures**: Among 7 institutions, 1 was bullish, 3 were bearish, and 3 expected a sideways trend. Bullish factors were loose funds, central bank's net injection, and weak economic data. Bearish factors were volatile long - term bonds and strong stock market performance[5]. 3.2.2 Energy Sector - **Crude Oil**: Among 9 institutions, 2 were bullish, 4 were bearish, and 3 expected a sideways trend. Bullish factors included high - load operation of US refineries and expected end of OPEC+ production increase. Bearish factors were the progress of US - Russia summit and the slowdown of Asian oil demand[6]. 3.2.3 Agricultural Products Sector - **Palm Oil**: Among 8 institutions, 4 were bullish and 4 expected a sideways trend. Bullish factors were strong export data and low inventory in some regions. Bearish factors were the call for policy re - evaluation in Indonesia and increased domestic inventory[6]. 3.2.4 Non - Ferrous Metals Sector - **Aluminum**: Among 7 institutions, 1 was bullish, 1 was bearish, and 5 expected a sideways trend. Bullish factors were improved macro - policies and low domestic inventory. Bearish factors were US tariff expansion and unstable trade situation[7]. 3.2.5 Chemical Sector - **Methanol**: Among 8 institutions, 5 were bearish and 3 expected a sideways trend. Bullish factors were policy support and cost increase. Bearish factors were high import volume and low demand in the off - season[7]. 3.2.6 Precious Metals Sector - **Gold**: Among 8 institutions, 1 was bearish and 7 expected a sideways trend. Bullish factors were expected Fed rate cuts and economic data deterioration. Bearish factors were high PPI data and improved risk appetite[8]. 3.2.7 Black Metals Sector - **Iron Ore**: Among 8 institutions, 1 was bullish, 3 were bearish, and 4 expected a sideways trend. Bullish factors were increased iron - water production and decreased global shipments. Bearish factors were increased port inventory and weak demand for steel products[8].

Group 1 - The core viewpoint indicates that the coal supply-demand situation in China is generally loose, with prices continuing to decline, prompting regulatory measures to stabilize the market [1][2] - The recent increase in coking coal prices is seen as a potential rebound, but its sustainability depends on whether production cuts are realized and if iron output meets expectations [1][2] - The long-term outlook suggests that the supply of premium coking coal will remain tight due to both quality and quantity declines, with domestic high-quality coking coal being irreplaceable by imports [1][2] Group 2 - The report from CICC suggests that coal supply in the second half of the year may be released more rationally, with potential price rebounds aiding industry profitability recovery [2] - It is anticipated that after the summer peak, there may be adjustments in the pace of thermal coal price recovery, but support is expected to strengthen with the onset of the heating season in October [2] - The coal industry chain includes companies such as China Coal Energy (01898), Yancoal Australia (03668), Yanzhou Coal Mining Company (01171), China Shenhua Energy (01088), and China Qinfa (00866) [3]

Core Viewpoint - The coal supply is expected to be released more rationally in the second half of the year, combined with marginal improvements in demand, leading to an overall rebound in coal prices, which will support industry profit recovery [1][4]. Group 1: Industry Profitability and Price Trends - The sustainability of profitability in the coal industry is crucial, with companies having relatively good profit capabilities, lighter balance sheets, and attractive dividends amid an "asset shortage" [4][6]. - The domestic electricity demand is projected to grow steadily, with a forecasted year-on-year growth rate of 5-6% by 2025, which will support coal demand recovery in the second half of the year [4][26]. - The coal price is expected to rebound after the summer peak season, with the low point in June likely being the lowest for the year [4][48]. Group 2: Supply and Demand Dynamics - The coal production in the first half of the year reached a historical high, with a year-on-year increase of 5.4% to 2.405 billion tons, primarily driven by high production levels in Shanxi [41][43]. - The government is taking measures to ensure rational coal supply release, which is expected to alleviate the "quantity compensating price" situation and enhance safety in coal production [42][48]. - The coal import volume decreased by 11.1% year-on-year in the first half of the year, primarily due to inventory pressures and price discrepancies between domestic and international markets [45][46]. Group 3: Coking Coal Market Outlook - Coking coal prices are expected to rebound, but the sustainability of this rebound depends on whether production cuts can be realized [5][54]. - The domestic coking coal production is nearing its peak, with future supply largely dependent on imports from Mongolia, which may limit the price rebound potential [55][56]. - The market anticipates that the "anti-involution" policy will catalyze a short-term rebound in coking coal prices, contingent on the pace and effectiveness of policy implementation [54][56].

Group 1 - The core viewpoint is that after the "peak summer" period, there may be adjustments in the pace of coal price recovery, but with the heating season starting in October, coal price support is expected to strengthen again, indicating that the low point of coal prices in June may be the lowest for the year [1][5] - The coal industry is expected to see a rational release of supply in the second half of the year, combined with marginal improvements in demand, leading to an overall rebound in coal prices, which will aid in the recovery of industry profitability [1][2] - The domestic electricity demand is projected to grow steadily, with a forecasted year-on-year growth rate of 5-6% by 2025, and an expected improvement in coal demand in the second half of the year compared to the first half [3] Group 2 - Policy adjustments are expected to lead to a more rational coal supply, reducing the "quantity compensates for price" situation and enhancing safety and sustainability in the industry [4] - Coking coal prices are anticipated to rebound, but the sustainability of this rebound will depend on whether production cuts are realized and if iron and steel production meets expectations [6] - The report recommends focusing on high-dividend stocks and those with high profit elasticity in the short term, while favoring companies with strong resource endowments and cost advantages in the long term, including China Shenhua (601088), China Coal Energy (601898), and others [7]

Investment Rating - The industry rating is "Positive" [1] Core Viewpoints - Coal prices have rebounded significantly, with the central price level continuing to rise. Domestic power plants have increased daily coal consumption, leading to further price increases for both coking coal and thermal coal. The report emphasizes that the industry is supported by both policy and fundamental factors, maintaining a "Positive" rating for the coal sector [6][41]. Summary by Sections Coal Market Performance - The coal sector outperformed the CSI 300 index, with a weekly increase of 8% compared to a 1.69% rise in the index, resulting in a 6.31 percentage point outperformance. A total of 37 stocks in the sector saw price increases, with Lu'an Huanneng showing the highest weekly gain of 31.22% [2]. Key Data on Coal Sales and Inventory - The average daily coal sales for monitored enterprises from July 18 to July 24, 2025, were 7.14 million tons, a week-on-week decrease of 2.4% but a year-on-year increase of 3.4%. The total coal inventory (including port storage) was 30.55 million tons, down 2.3% week-on-week but up 20.5% year-on-year [2][8]. Thermal Coal Industry Chain - As of July 25, 2025, the price index for thermal coal (Q5500K) in the Bohai Rim was 664 CNY/ton, reflecting a week-on-week increase of 0.15%. The inventory at Qinhuangdao port was 5.85 million tons, with a week-on-week increase of 70,000 tons [3]. Coking Coal Industry Chain - The main coking coal price at Jingtang Port was 1,650 CNY/ton, up 16.2% week-on-week. The inventory at Jingtang Port decreased by 11.16% week-on-week, while the total inventory at independent coking plants increased by 56.27% [4]. Coal Chemical Industry Chain - The price of Yanquan anthracite coal remained stable at 820 CNY/ton. The methanol market price in East China rose to 2,476.14 CNY/ton, an increase of 100.91 CNY/ton week-on-week [5]. Investment Recommendations - The report suggests focusing on high-dividend thermal coal companies and coking coal companies undergoing turnaround. Key companies to watch include China Shenhua, Shaanxi Coal and Chemical Industry, and Huainan Mining for thermal coal, and Huai Bei Mining and Shanxi Coking Coal for coking coal [6][41].

Core Viewpoint - The China Securities State-Owned Enterprises Dividend Index (000824) has shown strong performance, with a 1.80% increase, driven by significant gains in constituent stocks such as Tunnel Co. (600820) and Shanxi Coking Coal (000983) [1] Group 1: Market Performance - The National State-Owned Enterprises Dividend ETF (159515) rose by 1.83%, marking a third consecutive increase [1] - Key stocks in the coal sector, including Shanxi Coking Coal and Lu'an Environmental Energy, experienced a 10% limit up [1] - The coal sector is expected to maintain a positive outlook due to strong demand and favorable pricing conditions [1] Group 2: Sector Analysis - Everbright Securities noted that the "anti-involution" expectations are strengthening, predicting a bullish trend for coal prices as the peak demand season approaches [1] - Guosen Securities highlighted the resilience of coal demand and the potential for price rebounds in the second half of the year, supported by improved supply-demand dynamics [1] - The coal sector demonstrated strong performance metrics in Q1 2025, including a low debt-to-asset ratio of 44.7%, a net profit margin of 12.7%, and a relatively high return on equity (ROE) [1] Group 3: Index Composition - The China Securities State-Owned Enterprises Dividend Index comprises 100 listed companies with high and stable cash dividend yields, reflecting the overall performance of high-dividend state-owned enterprises [2] - The top five industries represented in the index are banking, coal, transportation, real estate, and media [2] - As of June 30, 2025, the top ten weighted stocks in the index accounted for 15.81% of the total index weight, with significant contributions from companies like COSCO Shipping Holdings (601919) and Jizhong Energy (000937) [2][4]