Investment Rating - The investment rating for the company is "Accumulate" with a target price of 11.43 CNY [6]. Core Insights - The company's production significantly rebounded in H1 2025, with Q2 sales showing a substantial month-on-month recovery. Cost control measures have led to a significant decline in costs for H1 2025, and the company is expected to continue recovering in terms of production and sales in H2 2025 [2][12]. Financial Summary - Total revenue for 2025 H1 was 9.66 billion CNY, a year-on-year decrease of 31.28%. The net profit attributable to the parent company was 654 million CNY, down 49.25% year-on-year. In Q2 2025, total revenue was 5.16 billion CNY, a year-on-year decrease of 33.03%, but a quarter-on-quarter increase of 14.56%. The net profit for Q2 was 400 million CNY, down 43.45% year-on-year but up 56.91% quarter-on-quarter [12]. Production and Sales Data - In H1 2025, the company produced 17.82 million tons of raw coal, an increase of 15.86% year-on-year. Self-produced coal sales were 10.35 million tons, a decrease of 13.19% year-on-year, with a sales price of 556.34 CNY per ton. Trade coal sales were 7.54 million tons, down 15.43% year-on-year, with a sales price of 469.98 CNY per ton [12]. Cost Management - The average selling price for self-produced coal in H1 2025 was 556.34 CNY per ton, down 18.9% from 685.92 CNY per ton in H1 2024. The cost per ton of self-produced coal was 275 CNY, a decrease of 10.4% year-on-year. The gross profit per ton was 281 CNY, down 25.8% year-on-year [12]. Future Earnings Forecast - The company is projected to have earnings per share (EPS) of 0.72 CNY, 0.88 CNY, and 1.15 CNY for the years 2025, 2026, and 2027 respectively. The estimated price-to-earnings (PE) ratio for 2026 is 13x, leading to a target price of 11.43 CNY [12][14].

Investment Rating - The investment rating for the company is "Accumulate" [5] Core Views - The company's production and sales have shown recovery growth, but the performance decline is primarily due to the decrease in coal prices. In Q2, costs decreased on a quarter-on-quarter basis, and gross profit recovered, offsetting the impact of falling coal prices. It is expected that with the rebound in coal prices in Q3, the pressure on performance will ease [2][12] Financial Summary - Total revenue for 2025 is estimated at 21,367 million, a decrease of 14.7% from 2024. Net profit attributable to the parent company is projected to be 1,608 million, down 27.7% from 2024. The earnings per share (EPS) for 2025 is expected to be 0.45 yuan [4][13] - The company achieved total operating revenue of 11,240 million in the first half of 2025, a year-on-year decrease of 7.86%. The net profit attributable to the parent company was 783 million, a year-on-year decrease of 39.75% [12] Production and Sales Performance - In the first half of 2025, the company completed raw coal production of 20.76 million tons, a year-on-year increase of 11.25%. The sales volume of commercial coal reached 19.28 million tons, an increase of 12.79% year-on-year. The average selling price of coal was 460.84 yuan per ton, down 19.50% year-on-year [12][13] Cost and Profitability - The selling price of coal in Q2 2025 was 419 yuan per ton, down 24.8% year-on-year and 18.1% quarter-on-quarter. The cost per ton of coal was 286 yuan, down 17.4% year-on-year and 1.9% quarter-on-quarter. The gross profit per ton was 132 yuan, down 37.1% year-on-year and 39.7% quarter-on-quarter [12][13] Resource and Capacity Expansion - The company has secured additional resources through a successful bid in Shanxi Province, increasing its total coal resource to 6.68 billion tons. The production capacity is expected to increase to over 45 million tons per year with the commissioning of new mines [12][13]

Group 1: Core Insights - The coal prices have reached a bottom in the first half of the year, with potential for a rebound in the second half as supply-demand dynamics improve, indicating resilience in coal demand in the medium term [1] - In Q1 2025, despite significant performance pressures, the coal sector remains strong with low debt-to-asset ratios (44.7%), high net profit margins (12.7%), and relatively high return on equity (ROE) [1] - The current low interest rate environment enhances the investment appeal of high-dividend leading stocks in the coal sector [1] Group 2: Supply Dynamics - From January to May, domestic coal production increased by approximately 130 million tons year-on-year, while imports decreased by about 16 million tons, indicating an overall increase in supply [2] - The domestic raw coal production for the same period reached 1.99 billion tons, reflecting a year-on-year increase of 6%, with expectations for a narrowing growth rate in the second half of the year [2] - Coal imports are projected to remain low, with an expected year-on-year decrease of 8 million tons (-15%) for the entire year, primarily due to reduced imports from Indonesia [2] Group 3: Regional Insights - The transportation demand for coal from Xinjiang has seen a temporary decline due to falling coal prices, despite efforts to lower railway freight rates [3] - As of June 6, the railway transportation volume of Xinjiang coal increased by only 6.8% year-on-year, with limited price advantages in certain regions [3] - Xinjiang is accelerating investments in coal chemical and coal power projects, indicating a future increase in local coal consumption [3] Group 4: Price and Production Trends - Historical data suggests that when coal prices drop below 600 RMB/ton, production cuts begin to occur, with previous years showing significant reductions in coal output [4] - Current coal companies maintain reasonable profitability and operational quality, making spontaneous production cuts less likely, although a slight reduction may occur if prices fall below cost lines [4] Group 5: Demand Outlook - National coal consumption from January to May reached 2.05 billion tons, showing a slight year-on-year increase of 0.5%, with expectations for improved demand in the second half of the year [5] - The thermal power sector is under pressure due to slower electricity demand growth and competition from renewable energy, but a rebound is anticipated as the peak season approaches [5] - Non-electric demand, particularly for chemical coal, remains strong, with significant year-on-year growth in coal-to-PVC, coal-to-ethylene glycol, and coal-to-methanol production [5]

Supply: Marginal Increment Significantly Reduced - Domestic coal production from January to May increased by approximately 130 million tons year-on-year, while imports decreased by about 16 million tons, indicating an overall increase in supply [3][7] - The domestic raw coal production reached 1.99 billion tons from January to May, reflecting a year-on-year increase of 6%. However, the growth rate is expected to narrow in the second half of the year, with an estimated total production of around 4.85 billion tons for 2025, representing a year-on-year increase of 9 million tons (2%) [3][9] - The decrease in imports is attributed to weak demand, high inventory levels, and diminishing price advantages of imported coal. For the first five months of 2025, coal imports totaled 19 million tons, a year-on-year decrease of approximately 16 million tons (8%) [3][64] Demand: Short-term Improvement Expected, Medium-term Resilience Visible - National commodity coal consumption from January to May reached 2.05 billion tons, showing a slight year-on-year increase of 0.1 billion tons (0.5%). The demand is expected to improve in the second half of the year as the consumption peak season approaches [3][4] - In the thermal power sector, the demand is under pressure due to slowing electricity growth and competition from renewable energy. However, the demand for thermal power is expected to rebound in the second half of the year [3][4] - Non-electric demand, particularly from the chemical sector, remains strong, with significant year-on-year growth in coal-to-PVC, coal-to-ethylene glycol, and coal-to-methanol production [3][4] Inventory: High Port Inventory Declining, De-stocking Remains Focus - Port inventories are currently at high levels but are expected to decline as demand improves in the peak consumption season. The focus will remain on de-stocking [4] Price: Thermal Coal Prices at Bottom, Coking Coal Prices Showing Stages of Rebound - The average market price of Qinhuangdao Q5500 thermal coal fell by approximately 199 yuan/ton in the first half of 2025, a year-on-year decrease of 23%. However, there is potential for price rebound as supply-demand dynamics improve [3][57] Investment Recommendations: High Dividend Value Still Exists, Stage Game Elasticity - The report suggests that despite the downward pressure on coal prices, there is still potential for a rebound in the second half of the year. The resilience of coal demand is viewed positively in the medium term [3][4] - Key investment targets include stable-performing coal companies such as China Shenhua, China Coal Energy, and Shaanxi Coal and Chemical Industry, as well as elastic stocks like Electric Power Investment and Jinko Coal Industry [3][4]