1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The overall domestic coal supply remains abundant, with stable production in major coal - producing areas. The coal开工率 in Ordos and Yulin regions is high, with a daily output of about 4 million tons. [3] - Power plant inventories are high and the destocking process is slow. Due to the impact of imported coal, power plants only make necessary purchases. The decline in port out - shipments leads to passive inventory accumulation at ports, and the available resources for sale are abundant. [3] - As the temperature rises nationwide, the daily coal consumption of power plants will increase seasonally, but the number of available inventory days is high, and the port FOB price continues to decline. [3] - In the pithead area, the operating rate of coal - chemical products is high, and the demand for chemical coal is fair. However, the long - term agreement coal of power plants overflows, weakening the support for pithead prices. It is expected that coal prices will continue to decline. [3] 3. Summary According to the Catalog 3.1 Price and Spread - Pithead prices are continuously falling. As of May 20, the 5500K pithead price in Datong was 455 yuan/ton, down 30 yuan/ton from last week; in Ordos, it was 425 yuan/ton, also down 30 yuan/ton; and the 5800K pithead price in Yulin was 469 yuan/ton, down 21 yuan/ton from last week. [8] - Port FOB prices continue to decline. [11] 3.2 Supply and Demand - **Production**: The production of major coal - producing area mines is stable. The coal开工率 in Ordos and Yulin regions is high, with a daily output of about 4 million tons. [3] - **Inventory**: Port inventories are high but have decreased. As of May 20, the inventory of Bohai Rim ports was about 29.73 million tons, a decrease of 1.5 million tons from the high level. Coastal power plant inventories are slowly destocking, and inland power plant inventories remain high. The total inventory of national power plants is at a high level compared to the same period in previous years, and the destocking speed is slow. [3] - **Consumption**: The daily consumption of coastal power plants is hovering at a low level, and the destocking is slow. The daily consumption of inland power plants is slowly increasing, and the inventory is continuously destocking. The total daily consumption of national power plants is slowly increasing, but the inventory is accumulating. The daily consumption of key national power plants is declining, and the inventory is continuously destocking. [3][65][70] - **Coal - chemical industry**: The operating rate of coal - chemical products such as methanol and urea is high, and the weekly chemical coal consumption is also at a certain level. The profit of coal - chemical products is also a factor affecting coal demand. [82][85][87] - **Power generation**: The total power generation has declined. The monthly thermal power generation has decreased by 6% year - on - year, and the proportion of thermal power generation has also changed. The power generation of hydropower, new energy, etc. also shows different trends. [96][100][102] - **Freight**: Domestic coastal freight rates have stabilized at the bottom, and international sea freight rates are also an influencing factor. [103][105] 3.3 Meso - level Data - From January to April, China imported 152.67 million tons of coal, a year - on - year decrease of 5.3%. [107] - From January to April, the cumulative coal production was 1.58473 billion tons, a year - on - year increase of 6.6%. [111]

Summary of Conference Call on Coal Industry Industry Overview - The coal inventory at northern ports has reached a historical high of approximately 31 million tons, primarily constituted by 14 large enterprises, accounting for 60% of the total inventory, while the remaining 40% is held by traders [1][3][22]. - Recent declines in coal prices are attributed to the selling actions of large groups and traders, driven by storage pressures and financial constraints [1][4]. Key Points Coal Inventory and Composition - The majority of the port inventory consists of Shanxi coal, making up about 60%, with the rest from Inner Mongolia and Shaanxi [1][6]. - Major companies like Jieneng, Guoneng, and Zhongmei hold significant portions of the inventory, with Jieneng at 4.916 million tons, Guoneng at 3.427 million tons, and Zhongmei at 3.588 million tons [3][6]. Price Trends and Market Dynamics - Coal prices are expected to stabilize around 600 RMB per ton by late May, with potential further declines in July and August, followed by a possible increase in September due to seasonal demand [2][11][14]. - The operational cost breakeven point for power plants is around 740 RMB per ton, which serves as a critical resistance level for price increases [18][22]. Supply and Demand Factors - The demand side has a more significant impact on recent price declines, with downstream regions experiencing price drops and low transaction volumes [2][4]. - The State Development and Reform Commission (SDRC) has mandated power plants to increase coal inventory to 215 million tons by June 10, aiming for a long-term contract fulfillment rate of over 90%, which may stabilize prices in the short term [1][8][10]. Storage and Self-Combustion Risks - There have been reports of coal self-combustion incidents, particularly with high moisture content coals, which poses a risk for traders holding large inventories [5][6]. - The storage duration for coal can lead to self-combustion within as little as 20 days under certain conditions, influencing traders' decisions to sell [5]. Market Structure and Future Outlook - The current high inventory levels at ports may lead to production cuts or shutdowns at coal mines, as companies face storage limitations [8][22]. - The market is expected to experience a slight upward trend in prices during the traditional peak season of "Golden September and Silver October," driven by increased electricity demand and potential production cuts from large enterprises [15][16]. Import Market Dynamics - Domestic coal prices are currently under pressure from imported coal, particularly from Mongolia and Russia, with significant price differentials affecting trading decisions [19][23]. - The price of Mongolian coal is approximately 745 RMB per ton, which is competitive compared to domestic coal prices [20][23]. Additional Insights - The coal market is currently characterized by high inventory levels, price volatility, and regulatory pressures aimed at stabilizing supply and demand dynamics [1][22]. - The interplay between large enterprises and traders in managing inventory and pricing strategies will be crucial in navigating the upcoming market challenges [7][10].

Investment Rating - The report maintains an "Accumulate" rating for the coal mining industry [7] Core Viewpoints - High inventory pressure is evident, leading to a further decline in coal prices. As of May 9, coal inventory at the Bohai Rim ports reached 33.051 million tons, up 6.50% week-on-week and 42.15% year-on-year, marking the highest level for the same period [2][5] - The recent week saw a downward trend in port coal prices, with the Qinhuangdao port's thermal coal price averaging 638 RMB/ton, down 14 RMB/ton (-2.18%) compared to the previous week, indicating that downstream pressure is greater than upstream [2][3] - The report suggests that short-term stabilization of coal prices may require a recovery in demand, recommending a defensive approach towards the sector and favoring companies with high long-term contract ratios and stable profits, such as China Shenhua and China Coal Energy [5] Summary by Sections Coal Price Trends - The Qinhuangdao port's thermal coal price (5500 kcal) averaged 638 RMB/ton, down 14 RMB/ton (-2.18%) for the week of May 5-9 [3] - The average price of thermal mixed coal at the Yulin pit in Shaanxi (5800 kcal) was 510 RMB/ton, down 6 RMB/ton (-1.21%) [3] Inventory Levels - As of May 9, coal inventory at Qinhuangdao port was 7.53 million tons, up 8.03% week-on-week and 56.22% year-on-year, also at a record high for the same period [5] - The Bohai Rim port coal inventory reached 33.051 million tons, reflecting a 6.50% increase week-on-week and a 42.15% increase year-on-year [5] Production and Utilization Rates - The operating rate of 110 sample coal washing plants was 62.4%, down 0.5 percentage points week-on-week and 1.7 percentage points year-on-year, remaining at a five-year low [4] - The capacity utilization rate of 247 blast furnaces was 92.09%, up 0.09 percentage points week-on-week and 4.42 percentage points year-on-year, with a daily average pig iron output of 2.457 million tons, up 0.1% week-on-week and 4.7% year-on-year [4] Key Company Financials - China Shenhua (601088.SH) is projected to have an EPS of 2.50 RMB in 2025, with a PE ratio of 16, and is rated "Accumulate" [6] - China Coal Energy (601898.SH) is expected to have an EPS of 1.31 RMB in 2025, with a PE ratio of 8, also rated "Accumulate" [6]

Investment Rating - The investment rating for the company is "Recommended" [1] Core Views - The company is experiencing a decline in coal prices, which has reached a bottom range, and is awaiting a turning point in coal consumption during the peak season [1][7] - The company reported a significant decrease in revenue and net profit for 2024, with revenue of 35.85 billion yuan, down 16.89% year-on-year, and a net profit of 2.45 billion yuan, down 69.08% year-on-year [3][5] - The company maintains a stable production and sales volume despite market pressures, with a slight recovery in coal production expected in Q1 2025 [6][7] Financial Summary - For 2024, the company achieved a revenue of 35.85 billion yuan, with a year-on-year decline of 16.89%, and a net profit of 2.45 billion yuan, down 69.08% year-on-year [3][5] - The company's coal production for 2024 was 57.57 million tons, a decrease of 4.8% year-on-year, while the sales volume was 52.25 million tons, down 5.0% year-on-year [6] - The average selling price of coal in 2024 was 645.64 yuan per ton, a decrease of 82.0 yuan per ton year-on-year [6] - The company has a projected revenue of 36.06 billion yuan for 2025, with a slight increase expected [5][9] Market Outlook - The coal market is under pressure, but the company is well-positioned to benefit from potential recovery in coal prices as the summer consumption season approaches [7] - The company has successfully acquired exploration rights for coal resources, which may enhance its resource base and support future production [6][7] - The financial structure of the company has improved significantly, with reduced debt levels and increased cash flow, providing a solid foundation for future growth [7]

Core Viewpoint - The company reported a significant decline in revenue and net profit for 2024, with a revenue of 35.85 billion yuan, down 16.89% year-on-year, and a net profit of 2.45 billion yuan, down 69.08% year-on-year [1] Financial Performance - In 2024, the company's coal production was 57.57 million tons, a decrease of 4.8% year-on-year, and coal sales were 52.25 million tons, down 5.0% year-on-year [2] - The average selling price of coal was 645.64 yuan/ton, a decrease of 82.0 yuan/ton year-on-year, while the sales cost increased to 390.76 yuan/ton, up 43.1 yuan/ton year-on-year [2] - The gross profit margin for coal mining was 39.48%, down 12.74 percentage points year-on-year [2] - For Q1 2025, the company reported a revenue of 6.968 billion yuan, down 19.53% year-on-year, and a net profit of 657 million yuan, down 48.95% year-on-year [1][3] Production and Sales - The company has 18 operational mines with an advanced capacity of 49.7 million tons/year and plans for additional capacity of approximately 8.5 million tons/year [3] - In Q1 2025, coal production slightly increased to 13.57 million tons, up 2.49% year-on-year, while coal sales were 11.87 million tons, up 0.51% year-on-year [3] - The average selling price of coal in Q1 2025 was 542.8 yuan/ton, down 146.6 yuan/ton year-on-year, with a sales cost of 340.2 yuan/ton, down 37.6 yuan/ton year-on-year [3] Market Outlook - The company is positioned as a leading producer of injection coal in China, maintaining relatively stable production and sales amid a challenging coal market [4] - Current coal prices are at a low point, with potential for recovery as summer demand increases and inventory levels decrease [4] - The company has improved its financial structure and cash flow, providing support for potential acquisitions and capacity expansion [4] Profit Forecast - The profit forecast for 2025-2027 has been adjusted, with expected net profits of 2.754 billion yuan for 2025, 3.251 billion yuan for 2026, and 3.592 billion yuan for 2027 [4] - The price-to-earnings ratios for these years are projected to be 11.9, 10.1, and 9.1 respectively [4]

Group 1: Market Overview - The market experienced fluctuations with the three major indices slightly declining, with the Shanghai Composite Index down by 0.2%, the Shenzhen Component down by 0.62%, and the ChiNext Index down by 0.65% [1] - The total trading volume in the Shanghai and Shenzhen markets was 1.06 trillion yuan, a decrease of 57.2 billion yuan compared to the previous trading day [1] - Sectors such as PEEK materials, gaming, banking, and steel saw gains, while sectors like Hainan, real estate, tourism, and food experienced declines [1] Group 2: Securities Insights - Guotai Junan Securities recommends prioritizing leading brokerages with significant comprehensive advantages and stronger cross-border asset allocation capabilities, emphasizing the need for transformation in fixed income self-operation as a pillar business of the brokerage industry [1] - The firm suggests that changes in single business models should be viewed as a reflection of supply-side reforms in the industry, advocating for a focus on certainty during the transformation and exploration period [1] Group 3: Coal Industry Outlook - GF Securities indicates that the coal industry is currently in a weak demand season, with coal prices expected to decline in 2025; however, the anticipated increase in counter-cyclical adjustment policies and recovery in industrial demand may lead to a gradual price rebound after inventory decreases [2] - The report highlights that leading companies are expected to maintain stable profitability due to relatively stable long-term contract prices and effective cost control [2] Group 4: Commercial Real Estate Opportunities - Huatai Securities expresses optimism about investment opportunities in the commercial real estate sector in 2025, despite challenges in 2024, citing the superior performance of leading companies in terms of scale expansion and operational efficiency [3] - Key reasons for this optimism include expected continuous recovery in the consumer market driven by policy catalysts, the promotion of consumption REITs enhancing liquidity and management premiums, and the increasing relative advantages of leading operators [3] - The report also notes that valuation advantages are becoming apparent, with the valuation of held properties aligning closely with market value, and some heavy asset operators' development business valuations falling below the reasonable valuation of their held property segments, reinforcing investment value [3]

Investment Rating - The industry investment rating is "Buy" [2] Core Views - The report indicates that the social electricity consumption in March increased by 4.8% year-on-year, and the supply-demand situation is expected to gradually improve in the second quarter [11][68] - The coal price has shown signs of stabilization, with expectations of a rebound as inventory levels decrease and demand increases in the upcoming summer peak [7][32][70] Market Dynamics - Recent market dynamics show a slight decline in thermal coal prices, with the CCI5500 thermal coal price reported at 670 RMB/ton, down 2 RMB/ton week-on-week [7][13] - The coal mining operating rate as of April 16 was 90.2%, reflecting a 0.3 percentage point increase week-on-week [16] - The inventory of thermal coal at major ports increased by 2.8% week-on-week, indicating a slight rise in supply [16][18] Industry Insights - The report highlights that the coal industry index rose by 2.6%, outperforming the CSI 300 index by 2.0 percentage points [68] - The first round of price increases for coke has been implemented, with prices rising by 50-55 RMB/ton, supported by strong demand from steel production [56][66] - The report notes that the first two months of 2025 saw a significant decline in industry profits, with total profits of 50.7 billion RMB, down 47.3% year-on-year [71][73] Key Companies - Key companies with stable profits and high dividends include Shaanxi Coal and China Shenhua [7][71] - Companies with low valuations and long-term growth potential include Xinji Energy and Yanzhou Coal [7][71] - Companies benefiting from positive demand expectations and low price-to-book ratios include Huabei Mining and Shanxi Coking Coal [7][71]