Investment Rating - The report maintains an investment rating of "Leading the Market" for the coal industry, indicating an expected performance that exceeds the benchmark index by more than 10% [1][31]. Core Insights - The coal supply has been marginally decreasing from January to August 2025, with a cumulative production of 3.165 billion tons, reflecting a year-on-year increase of 2.8%, but with a declining growth rate [4]. - In August 2025, coal prices experienced an unexpected surge due to supply-demand tensions, with significant increases in various coal types, particularly in thermal coal [6][7]. - The report highlights that domestic coal supply continues to contract, which has led to an increase in coal imports, with August imports rising by 20.02% month-on-month, despite a year-on-year decline of 6.78% [5][7]. Summary by Sections Supply and Demand - From January to August 2025, the cumulative coal supply showed a marginal decrease, with August production at 391 million tons, down 3.2% year-on-year but up 2.5% month-on-month [4]. - The report notes that terminal demand has been supported by manufacturing and infrastructure investments, with fixed asset investment increasing by 0.5% year-on-year [5]. Price Trends - August saw a significant rebound in coal prices, with various types of coal experiencing different degrees of price increases, particularly in coking coal [6][7]. - The report indicates that the price of thermal coal rose unexpectedly, with the peak occurring later than traditional peak seasons [7]. Investment Recommendations - The report suggests that with the policy shift due to reduced internal competition, there is an improved market risk appetite, making certain stocks more attractive. Key stocks to watch include Huayang Co., Jinkong Coal Industry, and Shanmei International for thermal coal, and Luanan Energy and Shanxi Coking Coal for coking coal [7].

Core Viewpoint - The report from CICC indicates a downward adjustment in coal price and cost assumptions, leading to a 4% reduction in Shougang Resources' (00639) estimated profits for 2025/26 to HKD 8.92 billion and HKD 9.78 billion respectively. The current stock price corresponds to a P/E ratio of 15.8x/14.4x for 2025/26E, with an enhanced relative attractiveness of dividends due to changes in risk appetite. The target price remains unchanged at HKD 3.00, implying an 8% upside potential based on a P/E ratio of 17.1x/15.6x for 2025/26E [1]. Group 1 - The company's 1H25 performance exceeded expectations, with a net profit attributable to shareholders declining by 38% year-on-year to HKD 4.04 billion, which was better than anticipated due to a smaller decline in profits driven by coal prices, as cost reductions were greater than expected [2]. - Production recovery was noted, with 1H25 raw coking coal and premium coking coal output increasing by 17% and 19% year-on-year to 2.64 million tons and 1.54 million tons respectively. The premium coking coal sales rose by 16% year-on-year to 1.55 million tons, primarily due to the resumption of operations at the Xingwu coal mine [2][3]. - The average selling price of premium coking coal in 1H25 fell by 45% year-on-year to HKD 1,067 per ton, while the price of Shanxi main coking coal decreased by 36% to HKD 1,401 per ton. The decline in selling prices was attributed to changes in coal quality and the commencement of full-scale mining at the Xingwu coal mine [2]. Group 2 - Significant improvement in unit production costs was observed, with the unit production cost of raw coking coal decreasing by 28% year-on-year to HKD 328 per ton. Cash costs fell by 32% year-on-year to HKD 241 per ton, and cash costs excluding uncontrollable costs decreased by 31% year-on-year to HKD 185 per ton [3]. - The net operating cash inflow for 1H25 was HKD 4.53 billion, a year-on-year decrease of HKD 7.27 billion. As of the end of June, the company had available free funds of HKD 94.75 billion, which, after excluding the year-end dividend for 2024, amounted to HKD 84.06 billion [3]. - The company plans to distribute an interim dividend of HKD 0.06, corresponding to a payout ratio of 76%, resulting in an interim dividend yield of approximately 2.2% based on the current stock price [3]. Group 3 - In 3Q25, coking coal prices have rebounded, with the price of Liulin No. 9 coking coal rising from a low of HKD 968 per ton in June to HKD 1,278 per ton by August 28. The average price since 3Q25 has been HKD 1,209 per ton, reflecting a 10% increase compared to 2Q25 [4]. - The outlook for coking coal prices remains cautiously optimistic, dependent on whether domestic supply can contract further, amidst weak steel demand and declining profits, which may still lead to expectations of reduced coking coal demand [4].

Investment Rating - The report maintains an "Accumulate" rating for the coal mining industry [7]. Core Viewpoints - Recent developments in Indonesia, including large-scale protests, may impact coal production and exports, as Indonesia accounts for 9% of global coal production and 29.8% of global coal trade [2]. - The report highlights a decrease in domestic coal prices, with Qinhuangdao port's average price at 695 RMB/ton, down 1.14% week-on-week [3]. - Coal mine operating rates have declined, with power coal mines at 89.4% and coking coal mines at 84.0% [4]. - The report suggests that recent policies aimed at reducing overproduction may improve long-term coal price expectations, recommending investments in specific coal stocks [5]. Summary by Sections 1. Market Overview - Indonesia's coal production for 2024 is projected at 840 million tons, with exports at 540 million tons [2]. - Domestic coal prices have seen a decline, with notable decreases in both Qinhuangdao and Shaanxi regions [3]. 2. Production and Utilization - The capacity utilization rate for power coal mines is 89.4%, down 2.72 percentage points week-on-week, while coking coal mines are at 84.0%, down 1.37 percentage points [4]. - Daily average pig iron production is reported at 2.4006 million tons, reflecting an 8.7% year-on-year increase [4]. 3. Inventory Levels - Qinhuangdao port coal inventory has increased to 6.1 million tons, up 4.27% week-on-week, while the inventory in the Bohai Rim ports is at 23 million tons, down 1.18% [4]. 4. Investment Recommendations - The report recommends stocks such as China Shenhua, China Coal Energy, and Shaanxi Coal and Chemical Industry, highlighting the potential for significant valuation and profit increases [5].

Core Viewpoint - The company's performance in 1H25 exceeded expectations despite a 38% year-on-year decline in net profit to HKD 404 million, primarily due to falling coal prices, but the decline was less than anticipated due to a greater reduction in costs [1] Production and Sales - In 1H25, the production of raw coking coal and premium coking coal increased by 17% and 19% year-on-year to 2.64 million tons and 1.54 million tons, respectively, with 100% of raw coal being washed [2] - The sales volume of premium coking coal rose by 16% year-on-year to 1.55 million tons, largely due to the resumption of production after the temporary shutdown of the Xingwu coal mine last year [2] Price and Cost Analysis - The average selling price of premium coking coal in 1H25 decreased by 45% year-on-year to RMB 1,067 per ton, while the price of Shanxi main coking coal fell by 36% to RMB 1,401 per ton [2] - The unit production cost of raw coking coal improved significantly, decreasing by 28% year-on-year to RMB 328 per ton, with cash costs down by 32% to RMB 241 per ton [2] Cash Flow and Dividends - The net operating cash inflow in 1H25 was HKD 453 million, a year-on-year decrease of 7.27 million [2] - As of the end of June, the company had available free funds of HKD 9.475 billion, which, after excluding the year-end dividend for 2024, amounts to HKD 8.406 billion [2] - The company plans to distribute an interim dividend of 6 HK cents, corresponding to a payout ratio of 76% and a dividend yield of approximately 2.2% based on the current share price [2] Market Trends - In 3Q25, coking coal prices have started to rebound, with the price of Liulin No. 9 coking coal rising from a low of RMB 968 per ton in June to RMB 1,278 per ton by August 28, with an average price of RMB 1,209 per ton in 3Q25, reflecting a 10% increase from 2Q25 [3] - Future price increases may depend on further reductions in domestic supply, as demand for coking coal is expected to contract due to weak steel demand and declining profits [3] Profit Forecast and Valuation - The company has revised down its coal price and cost assumptions, reducing its earnings forecast for 2025 and 2026 by 4% to HKD 892 million and HKD 978 million, respectively [3] - The current share price corresponds to a price-to-earnings ratio of 15.8x for 2025 and 14.4x for 2026, with a target price maintained at HKD 3.00, implying an 8% upside potential [3]

Core Viewpoint - The company's 1H25 performance fell short of expectations, with significant declines in both EBITDA and net profit due to higher costs and expenses [1][2]. Financial Performance - 1H25 operating EBITDA was AUD 595 million, down 40% year-on-year; net profit attributable to shareholders was AUD 163 million, down 61% year-on-year, with earnings per share at AUD 0.124, below expectations [1]. - 1H25 coal production increased to approximately 18.9 million tons, up 11% year-on-year, while sales volume decreased to approximately 16.6 million tons, down 2% year-on-year [1][2]. - The average selling price for self-produced coal was AUD 149 per ton, down 15% year-on-year [2]. Sales and Pricing - 1H25 sales of thermal coal were 13.8 million tons, down 7% year-on-year, while coking coal sales were 2.8 million tons, up 40% year-on-year [1][2]. - The cash operating cost per ton of coal (excluding royalties) was AUD 105, up 4% year-on-year, while the cash cost per ton based on production was AUD 93, down 8% year-on-year [2]. Capital Expenditure and Cash Flow - Capital expenditure for 1H25 was AUD 407 million, with free cash flow estimated at AUD 66 million [2]. - As of the end of 2Q25, the company held AUD 1.8 billion in cash, with a net cash position of AUD 1.67 billion [2]. Future Outlook - The company expects full-year coal production to be at the upper end of the guidance range of 35-39 million tons, with cash costs per ton expected to be at the lower end of the guidance range of AUD 89-97 [2]. - The company announced an interim dividend of AUD 0.062 per share, resulting in a payout ratio of 50% based on net profit for 1H25 [2]. Market Trends - The company anticipates a recovery in sales volume in the second half of the year, driven by easing weather disruptions [3]. - Coal prices have shown signs of recovery since June, with prices for Australian coal increasing compared to 2Q25 averages [3]. Earnings Forecast and Valuation - Earnings estimates for 2025 and 2026 have been revised down by 37% and 7% to AUD 535 million and AUD 747 million, respectively [3]. - The current stock price corresponds to a P/E ratio of 13.6x for 2025 and 9.3x for 2026, with a target price adjustment of 6% down to HKD 29, implying a 3% upside potential [3].

Group 1 - The company expects a decline in net profit for 1H25, with a forecasted net profit attributable to shareholders of 4.65 billion yuan, down approximately 38% year-on-year, and a non-recurring net profit of 4.4 billion yuan, down 39% year-on-year, primarily due to falling coal prices and weak demand leading to a decrease in coal sales [1] - The market is experiencing a loose supply-demand situation, which has pressured coking coal prices. National coal production increased by 5.4% year-on-year in 1H25, while demand remained weak, with power generation down 2.4% and crude steel production down 3.0% year-on-year [1] - The company's coal sales declined due to weak demand, with total coal sales in 1H25 down 4.9% year-on-year to 64.56 million tons, despite a 6.5% increase in coal production [1] Group 2 - Since 3Q25, coal prices have rebounded due to increased demand for electricity during peak season, with the price of Qinhuangdao 5500 kcal thermal coal rising from 615 yuan/ton at the end of June to 694 yuan/ton as of August 13, indicating a potential recovery in company profits [2] - The expectation of further tightening supply in the domestic market may lead to a more balanced coal supply-demand situation, supporting a sustained increase in thermal coal prices and improving company profitability compared to 2Q25 [2] Group 3 - The company's earnings forecast and valuation remain largely unchanged, with the current stock price corresponding to a P/E ratio of 14.3x/12.2x for A-shares and 9.9x/8.1x for H-shares for 2025E/26E [3] - The target price for A/H shares is maintained at 16.00 yuan for A-shares and 10.00 HKD for H-shares, implying a 20% upside for A-shares and a 3% upside for H-shares based on the 2025E/26E P/E ratios [3]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views - In the spot and futures market, the closing price of the main EG contract was 4,179 yuan/ton, down 71 yuan/ton (-1.67%) from the previous trading day. The spot price of EG in the East China market was 4,216 yuan/ton, down 19 yuan/ton (-0.45%). The spot basis of EG in East China was 21 yuan/ton, unchanged from the previous day. After Trump's attitude softened, concerns about plant shutdowns due to high ethane import tariffs eased on Thursday, leading to a decline in EG prices [1]. - In terms of production profit, the production profit of ethylene - based EG was -$66/ton, up $3/ton from the previous period. The production profit of coal - based syngas EG was -227 yuan/ton, up 41 yuan/ton [1]. - Regarding inventory, according to CCF data, the MEG inventory at major ports in East China was 77.5 tons, up 0.4 tons from the previous period. According to Longzhong data, it was 68.8 tons, down 1.9 tons from last week. The planned arrivals at major ports this week were 19.6 tons, slightly on the high side. The inventory has rebounded compared to Monday. The current inventory is at a seasonal median level in the past five years, and the hidden inventory is still high. Attention should be paid to the impact of de - stocking on port inventory [1]. - On the supply side, with the centralized maintenance of coal - based plants, the domestic supply of EG has declined. The Sino - US trade war also affects the supply of ethylene glycol. On the demand side, the polyester load has remained stable at a high level in the near term, but the textile and clothing orders directly exported to the US are still on hold. The overall EG inventory is at a seasonal median level in the past five years. There is some de - stocking support in April, but the hidden inventory of polyester factories is still high, limiting the actual de - stocking amplitude of port inventory [1][2]. 3. Strategies - Unilateral: Cautiously short - hedge MEG. Given the US tariff increase and OPEC+ production increase, the medium - term outlook for crude oil prices is weak. In the short term, attention should be paid to the progress of the Iran nuclear negotiations. The fundamentals of MEG itself are acceptable, but the textile and clothing demand outlook remains weak due to the suspension of direct exports to the US [3]. - Inter - period: No strategy provided. - Inter - variety: No strategy provided. 4. Summary by Directory Price and Basis - The report presents the closing price of the main EG contract, the spot price of EG in the East China market, and the spot basis of EG in East China, along with their changes from the previous trading day [1]. Production Profit and Operating Rate - It shows the production profits of ethylene - based EG, coal - based syngas EG, and other production methods, as well as their changes from the previous period [1]. International Price Difference - The international price difference between US FOB and Chinese CFR for ethylene glycol is presented [17]. Downstream Sales, Production, and Operating Rate - Information on the sales and production of long - filament and short - fiber, as well as the operating rates of polyester, direct - spun long - filament, polyester staple fiber, and polyester bottle - chip is provided [18][20][24]. Inventory Data - Data on the inventory of ethylene glycol at major ports in East China, including overall inventory and inventory at specific ports, as well as the inventory days of MEG raw materials in Chinese polyester factories and the daily outbound volume at major ports in East China are given [1][28][31][33][36].