Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoint The report predicts that in December 2025, the supply and demand of thermal coal will be generally balanced, with a year-on-year decline in production, stable imports, and a seasonal increase in demand. The price of 5500K thermal coal is expected to fluctuate strongly above 800 yuan, supported by the replenishment demand of downstream terminals during the peak season [4]. 3. Summary by Related Catalog Price and Market Analysis - **Intraday and Medium - term View**: The intraday and medium - term view of thermal coal spot is "oscillation". The core logic is that in late November, as the replenishment demand of terminal enterprises was fulfilled, domestic coal prices began to stabilize and decline. The supply is expected to maintain a negative growth pattern at the end of the year, while the demand will be boosted by the peak winter heating season in southern China, which is expected to support coal prices [4]. - **Supply**: The production bases in November and December 2024 were relatively high, and the weekly production data of thermal coal from the Steel Union in the first two weeks of November did not improve significantly compared with October. It is expected that the year - end thermal coal production will maintain a negative growth pattern [4]. - **Demand**: As December approaches, southern China will enter the peak winter heating season, driving up the coal consumption of coastal power plants, which is expected to support coal prices [4].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The domestic coal price started to stabilize and decline in late November after the replenishment demand of terminal enterprises was fulfilled. The year - end production of thermal coal is expected to maintain a negative growth pattern, while the demand will seasonally strengthen in December. Overall, the supply - demand of thermal coal will be balanced in December, and the price of 5500K coal is expected to oscillate strongly above 800 yuan, supported by the replenishment demand of downstream terminals in the peak season [5] 3. Summary According to Relevant Catalogs Price and Market Analysis of Thermal Coal - **Supply**: The production bases in November and December 2024 were relatively high. The weekly production data of thermal coal from the first two weeks of November did not improve significantly compared to October, and the year - end production is expected to maintain negative growth [5] - **Demand**: As December approaches, the southern regions of China will enter the peak winter heating season, which will drive up the coal consumption of coastal power plants and support the coal price [5] - **Price Forecast**: In December, the supply - demand of thermal coal is expected to be balanced, with a year - on - year decline in production, stable imports, and seasonally strengthening demand. The price of 5500K coal is expected to oscillate strongly above 800 yuan [5]

Group 1: Report Industry Investment Rating - Not provided Group 2: Core View of the Report - The short - term, mid - term, and intraday views on thermal coal spot are all "震荡" (fluctuation). In December, the supply - demand of thermal coal is expected to be in overall balance, with a year - on - year decline in production, stable imports, and a seasonal increase in demand. The price of 5500K coal is expected to fluctuate strongly above 800 yuan, supported by the replenishment demand of downstream terminals during the peak season [1][4] Group 3: Summary by Related Catalogs Variety View Reference - For thermal coal spot, the short - term, mid - term, and intraday views are all "震荡", and the core logic is that the domestic coal price has stabilized and declined after the terminal enterprises' replenishment demand was fulfilled in late November. The year - end production is expected to be in a negative growth pattern, while the demand in the southern region will increase in December during the peak winter heating season, which will support the coal price [1][4] Main Variety Price Market Driving Logic - Commodity Futures Black Sector - **Core Logic**: In late November, after the terminal enterprises' replenishment demand was fulfilled, the domestic coal price started to stabilize and decline. The production in November and December 2024 had a high base, and the weekly production data of Mysteel's thermal coal in the first two weeks of November did not improve significantly compared with October. It is expected that the year - end thermal coal production will maintain a negative growth pattern. In December, the southern region will enter the peak winter heating season, driving up the coal consumption of coastal power plants, which is expected to support the coal price. Overall, in December, the supply - demand of thermal coal is expected to be in balance, with a year - on - year decline in production, stable imports, and a seasonal increase in demand. The price of 5500K coal is expected to fluctuate strongly above 800 yuan, supported by the downstream terminal's replenishment demand during the peak season [4]

Investment Rating - The report maintains a "Buy" rating for Shaanxi Coal and Chemical Industry Co., Ltd. (601225 CH) with a target price of RMB 33.11 [6][4]. Core Views - The company reported a Q3 revenue of RMB 40.1 billion, down 10.01% year-on-year but up 6.03% quarter-on-quarter. The net profit attributable to shareholders was RMB 5.075 billion, down 20.34% year-on-year but up 79.08% quarter-on-quarter. The overall performance improvement in Q3 is attributed to the recovery in coal prices and the gradual elimination of the impact from deferred income tax related to the exit from the Zhuque New Materials Asset Management Plan [1][4]. - The company is expected to benefit from stable coal prices and a favorable interest rate environment, enhancing its dividend value as a leading thermal coal player with a high dividend payout ratio [1][4]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of RMB 118.083 billion, down 12.81% year-on-year, and a net profit of RMB 12.713 billion, down 27.22% year-on-year. The non-recurring net profit was RMB 11.494 billion, down 29.70% year-on-year [1][4]. - The coal production and sales for the first nine months of 2025 were 130.37 million tons and 189.20 million tons, respectively, showing a year-on-year increase of 2.03% and 0.40% [2][4]. Market Outlook - The report suggests that the thermal coal market may maintain a tight supply-demand balance, with coal prices expected to stabilize in the range of RMB 700-750 per ton [3][4]. - The company is likely to benefit from high electricity prices in Shaanxi, supporting long-term coal contract prices, while the power segment acts as a stabilizer for coal consumption and contributes to stable cash flow [2][4]. Profit Forecast and Valuation - The net profit forecasts for 2025-2027 have been adjusted downwards by 11%, 1%, and 0%, respectively, to RMB 18.885 billion, RMB 21.773 billion, and RMB 22.091 billion, with corresponding EPS of RMB 1.95, RMB 2.25, and RMB 2.28 [4][10]. - The report assigns a 2025 PE valuation of 17 times, reflecting an increase from the previous valuation of 15 times, with a target price adjustment to RMB 33.11 [4][10].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoint of the Report The power coal supply is stable while the demand weakens seasonally. The spot price is supported by downstream restocking demand in the short term, but the upward momentum is limited after the holiday. Coal prices in October are expected to remain volatile [4]. 3. Summary by Related Catalog Main Variety Price Quotation Driving Logic - Commodity Futures Black Sector - **Variety**: Thermal coal spot - **Intraday and Medium - term View**: Oscillation - **Core Logic**: The impact of the previous production capacity verification has eased, and coal mines in the main production areas maintain normal production. However, some coal mines slow down production after completing their production targets at the end of the month. Overall, the supply of thermal coal runs smoothly, while the demand shows a downward trend in the off - season. As of September 25, the total coal inventory of 9 ports in the Bohai Rim was 2.277 billion tons, with a weekly decrease of 2 million tons compared to the previous week, and 158.4 million tons lower than the same period last year. Since September, the water inflow in Sichuan and Yunnan has improved significantly. There have been consecutive all - day negative electricity prices in the Sichuan power spot market due to excessive new energy output, and Inner Mongolia has entered the windy season. The increase in new energy output will suppress the demand for thermal coal [4].

Summary of Key Points from the Conference Call Industry Overview - The coal industry in China is characterized by high concentration in production, with Inner Mongolia, Shanxi, Shaanxi, and Xinjiang accounting for over 80% of total output. New capacity is strictly controlled by policy, leading to weak capital expenditure willingness [2][7][8] - China is the largest coal producer and consumer globally, influencing international market prices significantly [5] Supply Dynamics - Domestic coal production is expected to remain stable, with an estimated total supply of approximately 4.4 billion tons in 2024, including around 4 billion tons from domestic production and 420 million tons from imports [11] - Xinjiang plays a crucial role as a marginal supplier due to its significant resource reserves, but high transportation costs limit its contribution to the national market [9][10] - The overall coal supply is projected to decline slightly, with new capacity primarily compensating for the retirement of outdated mines [8][11] Demand Trends - The demand for thermal coal is primarily driven by the power sector, which accounts for over 60% of consumption. The growth of renewable energy has a substitutive effect on thermal power demand [2][13] - Non-power sectors such as metallurgy and construction show stable or declining demand, while chemical coal demand has increased to about 7% and is expected to grow further due to large coal chemical projects [4][16][17] Price Mechanism - Thermal coal prices are influenced by inventory levels and government policies, with a long-term contract price mechanism stabilizing the market. The benchmark price is set at 675 RMB/ton, with fluctuations between 575 and 775 RMB [4][18][19] - The price for 2025 is expected to have a low point around 600 RMB and a high point near 750 RMB, with future price peaks projected to remain below 800 RMB [20][22] Profitability of Coal Enterprises - Profitability for coal companies is primarily determined by coal prices and costs. Major players like China Shenhua and Shaanxi Coal and Chemical Industry maintain strong profitability due to favorable resource endowments [22][23] - Investment logic in the current market emphasizes stability in dividends, with leading companies offering dividend yields of over 4.5% [23] Future Outlook - The coal power sector is expected to see growth rates around zero in 2025 and 2026, with a recovery anticipated starting in 2027, potentially exceeding 1.5% growth [14] - The overall trend for coal supply is expected to stabilize or slightly decline, with significant policy impacts on production and pricing [11][12][20] Additional Insights - The long-term contract price mechanism has been established to ensure profitability for downstream power companies, requiring over 80% of resource volumes to be contracted [19] - The impact of international natural gas prices on domestic coal prices is noted, as fluctuations in gas prices can influence coal pricing through import dynamics [21]

1. Report Industry Investment Rating - No relevant content provided 2. Core View of the Report - The report predicts that thermal coal will maintain a relatively strong performance in the near term, with the fundamental and news - related positives during the peak season driving up coal prices [4]. 3. Summary by Related Catalogs 3.1 Price and Market Outlook - The intraday and mid - term reference view for thermal coal spot is "oscillation", and it is expected to run strongly in the near future [4]. 3.2 Supply Analysis - In the Lvliang Zhongyang area, environmental inspections are strict. On July 18, an individual coal mine stopped production due to gangue disposal issues, and three other mines are still in a state of shutdown or production reduction due to underground production problems. In the future, thermal coal may shift from a supply - surplus situation to a balanced supply - demand pattern [4]. 3.3 Demand Analysis - As of July 10, the daily coal consumption of power plants in 8 coastal provinces was 2.148 million tons, a week - on - week increase of 61,000 tons; the daily coal consumption of power plants in 17 inland provinces was 3.551 million tons, a week - on - week decrease of 95,000 tons. There is good support for thermal coal demand during the peak season, and the atmosphere at the mine mouth is improving [4]. 3.4 Inventory Analysis - As of July 17, the total coal inventory of 9 ports in the Bohai Rim was 26.985 million tons, with a slight weekly de - stocking of 34,000 tons. The inventory is 1.151 million tons higher than the same period last year and is at a five - year high, indicating sufficient coal stocks [4].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core View of the Report - The short - term, mid - term, and intraday views on thermal coal spot are all "oscillation", and it is expected to run strongly due to the resonance of fundamental and news - related factors [1][4] Group 3: Summary According to the Catalog Price and Market View - The short - term, mid - term, and intraday views of thermal coal spot are all "oscillation", with the core logic being the resonance of fundamentals and news driving the strong operation of thermal coal [1][4] Driving Logic of Price Quotes - **Supply**: In the Lvliang Zhongyang area, environmental inspections are strict. One coal mine stopped production on July 18 due to gangue treatment issues, and three other mines are still in a state of shutdown or production reduction. In the future, under the premise of ensuring energy supply security, thermal coal may transition from an oversupply situation to a balanced supply - demand pattern [4] - **Demand**: As of July 10, the daily coal consumption of power plants in 8 coastal provinces was 2.148 million tons, a weekly increase of 61,000 tons; that of power plants in 17 inland provinces was 3.551 million tons, a weekly decrease of 95,000 tons. There is good support for thermal coal demand during the peak season, and the atmosphere at the mine mouth is improving [4] - **Inventory**: As of July 17, the total coal inventory of 9 ports in the Bohai Rim was 2.6985 billion tons, with a slight weekly de - stocking of 34,000 tons. The inventory is 1.151 million tons higher than the same period last year, at a five - year high, indicating sufficient coal storage [4]