Investment Rating - The coal industry is rated positively, with a focus on recovery in coal prices in the second half of 2025, which is expected to lead to performance recovery for coal companies [5][43]. Core Insights - In the first half of 2025, the coal sector underperformed the market, with the Shenwan coal mining index declining by 12.73%, while the Shanghai Composite Index rose by 2.76% [5][8]. - The average price of Q5500 thermal coal at ports was approximately 678 CNY/ton, down 22.57% year-on-year, and the average price for the second quarter was 633 CNY/ton, down 25.27% year-on-year [5][16]. - The overall revenue of 23 major listed coal companies was 513.1 billion CNY, a decrease of 18.9% year-on-year, with net profit falling by 31.1% to 55.5 billion CNY [5][22]. - The average dividend payout ratio for the coal industry increased to approximately 56.3% in 2024, reflecting a high dividend yield characteristic [5][35]. - The average return on equity (ROE) for the coal industry decreased to about 5.8% in the first half of 2025, down from previous years [5][41]. Summary by Sections 1. Industry Performance - The coal sector's performance was weaker than the market, with significant price declines impacting profitability [5][8]. - The first half of 2025 saw a high inventory level and a traditional off-peak season, leading to downward pressure on coal prices [5][16]. 2. Revenue and Profitability - Major coal companies reported a total revenue of 513.1 billion CNY, with a notable decline in both thermal and coking coal revenues [5][21]. - The net profit for the coal sector dropped significantly, with the thermal coal segment seeing a 24.1% decrease in net profit [5][22]. 3. Financial Metrics - The average expense ratio for the coal mining sector was 9.74%, showing a slight increase from the previous year [5][29]. - The industry maintained an average debt-to-asset ratio below 50%, indicating stable financial health [5][33]. 4. Dividend Trends - The coal industry's average dividend payout ratio has been on the rise, with several companies planning mid-year dividends in response to favorable policies [5][35]. 5. Investment Recommendations - Recommended stocks include China Shenhua, Shaanxi Coal, and China Coal for their stable operations and high dividends, while Shanxi Coal and Lu'an Environmental Energy are noted for their undervalued potential [5][43].