Core Viewpoint - The capacity replacement policy is a key tool for supply-side structural reform, aimed at controlling total capacity and optimizing existing capacity, ensuring that new advanced capacity is added while eliminating outdated capacity, leading to a reduction in total industry capacity without increase [1] Group 1: Policy and Industry Impact - The capacity replacement policy may lead to future production cuts due to strict limits on replacement indicators [1] - A coal capacity reserve system has been established to mitigate the impact of strict capacity replacement indicators [1] - The coal industry is expected to gradually achieve supply-demand balance, with coal prices projected to rise steadily [1] Group 2: Investment Opportunities - The coal ETF (515220) tracks the China Securities Coal Index (399998) and offers a high dividend yield, exceeding 5.3% over the past 12 months [1] - In the context of declining risk-free interest rates, the investment value of coal assets is highlighted [1] - Investors are encouraged to consider gradually accumulating positions in coal ETF (515220) and its connected funds (Connect A: 008279; Connect C: 008280; Connect E: 022501) to seize investment opportunities in the coal sector [1]

Core Viewpoint - The coal industry in China is facing potential risks related to the newly increased coal mine capacities, which may be revoked if companies fail to fulfill their capacity replacement commitments by the end of 2025 [1][5]. Group 1: Capacity Replacement Policy - The capacity replacement policy is a key tool for supply-side structural reform, aiming to "control total volume and optimize stock" by ensuring that new advanced capacities are built only after eliminating outdated capacities [2]. - The policy promotes high-quality development in the coal industry by limiting total capacity while improving capacity quality through market and legal means [2]. Group 2: Historical Context - During the supply-side structural reform period (2016-2020), coal production exceeded demand, leading to tighter capacity allocation policies and the implementation of reduction replacement policies [3]. - The government provided financial incentives for exiting coal mines to reduce capacity replacement ratios and required that closed mines' capacities be at least 120% of the new mines' capacities [3]. Group 3: Current and Future Capacity Management - In the current production increase and supply guarantee period (2021-2025), the government maintains the "reduction replacement" or "equal replacement" principles while implementing a commitment system for capacity indicators [4]. - Companies can initially commit to increased coal mine capacities, with subsequent fulfillment of capacity replacement indicators [4]. Group 4: Capacity Constraints - Based on the 2015 capacity baseline and the "13th Five-Year Plan" exit situation, the legal capacity limits are estimated at 4.7, 4.5, and 4.4 billion tons per year, which is below the projected production of 4.76 billion tons in 2024 [6]. - Strict enforcement of capacity replacement policies may necessitate future production cuts, while a coal capacity reserve system has been established to alleviate some capacity replacement indicator constraints [6]. Group 5: Investment Targets - Key companies to focus on in the thermal coal sector include China Shenhua (601088.SH), Shaanxi Coal and Chemical Industry (601225.SH), and others [7]. - In the coking coal sector, companies such as Huaibei Mining (600985.SH) and Shanxi Coking Coal (000983.SZ) are highlighted for investment consideration [7].

Investment Rating - The industry investment rating is "Positive" (maintained) [3] Core Viewpoints - The capacity replacement policy is a core tool for supply-side structural reform, aiming to "control total volume and optimize stock" through "reduction replacement" or "equal replacement" principles, ensuring that new advanced capacity is built while eliminating outdated capacity [3][8] - During the supply-side structural reform period (2016-2020), coal production exceeded demand, leading to tighter capacity allocation policies and the implementation of reduction replacement policies [3][21] - In the production increase and supply guarantee period (2021-2025), the policy continues to adhere to reduction replacement principles while implementing a commitment system for capacity indicators [3][23] - The capacity replacement commitment system is crucial for optimizing coal capacity management and ensuring national energy security [3][30] - The coal industry's supply and demand are expected to gradually balance, with coal prices steadily rising under the current policy framework [3][40] Summary by Sections Capacity Replacement Policy - The capacity replacement policy is essential for addressing overcapacity in industries like coal, steel, and cement, focusing on controlling new capacity while phasing out outdated capacity [8][10] - Specific policies were introduced from 2016 to 2018, mandating "reduction replacement" for the coal industry [15][16] Supply-Side Structural Reform Period (2016-2020) - The coal industry faced a situation of oversupply, prompting the implementation of tighter capacity allocation policies and reduction replacement measures [21][24] - Policies during this period included incentives for exiting coal mines to reduce capacity indicators [24][25] Production Increase and Supply Guarantee Period (2021-2025) - The commitment system allows coal mines to promise capacity increases without immediate compliance with replacement indicators, aiming to expedite the release of quality capacity [30][31] - The policy encourages the establishment of a coal capacity reserve system to enhance supply flexibility and resilience [39] Investment Recommendations - The report suggests prioritizing investments in companies such as China Shenhua, Shaanxi Coal, and others in the thermal coal sector, as well as companies in the coking coal sector like Huabei Mining and Shanxi Coking Coal [3][40]

Core Viewpoint - The autonomous region's energy bureau is accelerating coal mine project construction to enhance coal production capacity and ensure energy supply stability by 2027 [1][4]. Group 1: Project Acceleration - Three coal mines have received approval but have not yet started construction, with significant progress in the handling of procedures since 2025 [1]. - Two coal mines have commenced construction, while one is expected to start in October [1]. - Thirteen coal mines are under construction, with an investment of 2.69 billion yuan, and three are expected to be completed and handed over for production by the end of the year [1][3]. Group 2: Capacity and Investment - The total production capacity of the three approved coal mines in Ordos City is 23 million tons per year, with a planned total investment of 20.2 billion yuan [2]. - The region has 13 coal mines under construction with a total capacity of 110.3 million tons per year, including 7 in Ordos City with a capacity of 59 million tons per year [3]. Group 3: Emergency Capacity Reserve - The National Development and Reform Commission and the National Energy Administration have initiated a coal capacity reserve system, aiming for a target of 300 million tons per year by 2030 [4]. - The autonomous region has reported 13 capacity reserve projects, with a total reserve capacity of 23.6 million tons per year, marking a significant step in enhancing emergency supply capabilities [4].