Investment Rating - The report maintains a "Recommended" rating for the coal mining industry [1] Core Viewpoints - The coal price has upward momentum in December, driven by seasonal demand increases and supply constraints [4][7] - The coal mining industry is characterized by high asset quality and strong cash flow among leading companies, indicating a favorable long-term outlook for coal prices [7] Summary by Sections 1. Thermal Coal - As of December 5, the price of thermal coal at northern ports is 785 RMB/ton, a decrease of 31 RMB/ton week-on-week [14] - Production in the Sanxi region has seen a slight decrease in capacity utilization, down 0.61 percentage points [14][21] - Coastal and inland power plants have increased daily coal consumption by 7.3 and 35.3 thousand tons respectively [14][23] - The inventory of power plants in 25 provinces is 136.12 million tons, down 115 thousand tons year-on-year [14][34] 2. Coking Coal - The capacity utilization rate for coking coal mines has decreased by 0.17 percentage points to 84.5% [5][40] - The average crossing volume at Ganqimaodu port has increased, indicating stable import levels [5][44] - The price of main coking coal at ports is 1,630 RMB/ton, down 40 RMB/ton week-on-week [5][41] 3. Coke - The production rate of independent coking plants has increased slightly to 72.66% [53][59] - The average profit per ton of coke has decreased to approximately 30 RMB/ton, down 16 RMB/ton week-on-week [57] - The price of coke at Rizhao port is 1,630 RMB/ton, a decrease of 50 RMB/ton week-on-week [54] 4. Anthracite - The price of anthracite remains stable, with the small block price at 930 RMB/ton [69] 5. Key Companies and Profit Forecasts - Key companies to focus on include China Shenhua, Shaanxi Coal, and Yanzhou Coal, all rated as "Buy" [9]

Summary of Conference Call on Coal Industry Industry Overview - The coal industry is experiencing a new cycle with a temporary pause in coal prices, but an upward trend is anticipated in the near future [1][4] Key Points and Arguments Coal Price Dynamics - Regional differentiation in thermal coal prices: Shanxi's Datong coal prices remain strong, while Yulin's prices have decreased but are supported by high quality and non-electric demand, leading to significant price volatility [1][3] - As of the week, Qinhuangdao's 5,500 kcal thermal coal price increased to 834 RMB/ton, up 17 RMB from the previous week, indicating a stable upward trend overall [2] Downstream Inventory Trends - National power plant inventory decreased by 1.5% year-on-year, with daily consumption down by 5.9%, but the available days increased by 1.2 days [5] - The inventory at ports in the Bohai Rim region is 24.3 million tons, showing a 2.56% increase month-on-month but a 13.15% decrease year-on-year, indicating strong procurement demand despite lower inventory levels compared to last year [5] Global Energy Market Impact - International coal futures prices remained stable, while crude oil prices saw a slight increase of 1.2% and 0.4%. The global energy market has a limited impact on the domestic coal market, but a stable commodity price environment helps maintain domestic market stability [6] Hydropower Substitution Effect - The growth rate of hydropower generation has declined in Q4, reducing its substitution effect on thermal power, which is beneficial for thermal power demand and supports thermal coal demand [7] Coal Supply Constraints - In October, the national raw coal production was 410 million tons, a year-on-year decrease of 2.3%, with the decline rate expanding compared to September. This suggests that supply may continue to decrease in November and December due to strict safety checks and environmental policies [8] Future Price Outlook - Coal prices are expected to rise in the next 1-2 weeks due to increased heating demand from cold weather, higher daily consumption at power plants, and tight supply conditions [9] Investment Recommendations - For thermal coal, focus on companies with high earnings elasticity such as Yanzhou Coal Mining, Shanxi Coal International, and others [10] - For coking coal, recommend companies like Lu'an Environmental Energy and Pingmei Shenma, which are currently undervalued [10][11] - Electric Power Investment Energy's recent acquisition of coal and power assets for 11.15 billion RMB is expected to enhance integrated operational capabilities, despite a projected 10% dilution effect on earnings per share [12]

Investment Rating - The report maintains a "Buy" rating for the coal mining industry [1] Core Views - The coal mining industry is experiencing a tightening supply due to reduced production and imports, with October coal production down 2.3% year-on-year, and imports down 9.76% [6][25] - Demand has significantly improved in October, primarily driven by increased coal consumption in thermal power and chemical industries, while the construction and metallurgy sectors have shown a decline [6][26] - The report highlights a notable increase in coal prices, with port prices rising by 56 yuan/ton in October, reflecting the improved supply-demand dynamics [10][11] Supply Side Summary - Coal production in October was 407 million tons, a decrease of 2.3% year-on-year, with daily production averaging 13.12 million tons, down 596,000 tons from the previous month [4][19] - The decline in production is attributed to maintenance, adverse weather, and stricter safety checks [6][19] - Coal imports in October were 41.74 million tons, down 9.76% year-on-year, with a cumulative import of 388 million tons from January to October, reflecting an 11.0% decrease [25][26] Demand Side Summary - Thermal power generation increased by 7.3% year-on-year in October, reversing a decline from September [6][26] - The total industrial electricity generation in October was 800.2 billion kWh, up 7.9% year-on-year, with a daily average of 25.81 billion kWh [5][18] - Chemical industry coal consumption rose significantly, with a year-on-year increase of 35.38% in October [10][26] Inventory Summary - By the end of October, coal inventories at production enterprises decreased by 135,000 tons, while inventories at northern ports increased by 432,000 tons [10][11] - The report notes that inland power plants have increased their coal inventories, indicating a trend towards replenishment as winter approaches [10][11] Investment Recommendations - The report suggests focusing on robust coal companies such as China Shenhua, Shaanxi Coal, and China Coal Energy, which exhibit strong cash flow and profitability [10][12] - It emphasizes the value attributes of the coal sector, particularly in light of the current market conditions and potential for price increases [10][11]

Group 1 - China Shenhua Energy Co., Ltd. plans to distribute a cash dividend of 19.471 billion RMB (including tax) for the first half of 2025, with a per-share dividend of 0.98 RMB based on a total share capital of 19,868,519,955 shares [1] - The A-share dividend registration date is set for November 7, and the cash dividend payment date is November 10. As of November 3, the A-share price was 43.42 RMB, with a total market capitalization exceeding 860 billion RMB [1] - In July 2023, China Shenhua distributed a cash dividend of 44.903 billion RMB for the 2024 fiscal year, with a per-share dividend of 2.26 RMB [1] Group 2 - In Q3 2025, China Shenhua's coal segment achieved a revenue of 75.04 billion RMB, a year-on-year decline of 13.1% but a quarter-on-quarter increase of 9.5%. The net profit attributable to shareholders was 14.41 billion RMB, down 6.2% year-on-year but up 13.5% compared to Q2 [1] - The coal sector in the A-share market has seen a significant rise, with the coal industry index increasing by 15.65% from October 9 to November 3, and China Shenhua's stock price rising by 12.78% during the same period [2]

Core Viewpoint - The coal ETF (515220) has continued to rebound, with a rise of over 2% today and an increase of more than 11% in October, indicating strong market performance and investor interest [1][2]. Group 1: Market Performance - The coal ETF has seen a significant inflow of capital, with its share increasing by over 340% this year, bringing its current scale to over 13 billion yuan [2]. - The coal market is experiencing tightening supply and demand dynamics, with domestic coal production growth slowing and import volumes declining year-on-year [2]. Group 2: Price and Demand Outlook - The average coal price has improved on a month-on-month basis, and the third quarter is expected to show a noticeable improvement in the coal industry's performance [2]. - With expectations of a cold winter and sustained high demand for iron and steel, coal demand in the peak season may exceed expectations, supported by constrained supply [2]. Group 3: Investment Considerations - The fundamental and financial aspects of the coal sector may resonate positively, and the high dividend yield of the coal sector enhances the investment value of the coal ETF (515220) [2]. - Investors are encouraged to pay attention to the coal ETF (515220), which is the only coal ETF available in the market [2].

Summary of Coal Industry Conference Call Industry Overview - The coal market is currently experiencing a situation where long-term contract prices are higher than market prices for 5,000 kcal coal, while the 4,500 kcal long-term contract price is lower than the market price, indicating structural adjustment opportunities in the market [1][3] - The coal sector is facing performance pressure in the first half of 2025, but the overall dividend yield remains above 4%, with China Shenhua at 5% and Shaanxi Coal at 4.6%, providing a safety margin for investors [1][4] - Last week, the coal sector outperformed the CSI 300 index by 1.2 percentage points, with small coal companies showing significant gains, suggesting an increase in market risk appetite [1][5] Price Trends and Market Dynamics - After a continuous decline, port coal prices have seen their first increase, supported by spot prices reaching long-term contract support levels and intervention from relevant national departments. The price of 5,500 kcal thermal coal is expected to stabilize and rebound in the short term [1][6] - Despite weakened electricity demand in the south, increased demand from industrial, metallurgical sectors, and winter storage in Northeast China, along with declining port inventories, are supporting coal prices [1][6] - It is anticipated that thermal coal prices may rise by 15-20 yuan per ton in the next two weeks due to power plant restocking and maintenance on the Daqin line, with further increases expected during the heating season in Q4 [1][7][8] Investment Value and Recommendations - The coal sector is considered to have good investment value despite performance pressures in 2025. Many companies maintain dividend yields above 4%, indicating solid support even under challenging conditions [1][4] - Investment opportunities are recommended in companies with price elasticity in thermal coal, such as Shaanxi Coal, China Coal Energy, and Yanzhou Coal Mining, as well as coking coal companies benefiting from tight supply-demand conditions [2][9] - The market is advised to focus on companies like Shaanxi Coal, China Coal Energy, Yanzhou Coal Mining, and others that show potential for growth in the current environment [2][9] Key Considerations - Future price movements will depend on factors such as overproduction checks, inventory changes at ports, and the end of high temperatures in the south [8] - The overall sentiment in the coal market is cautiously optimistic, with expectations of price recovery supported by both supply constraints and demand increases in various sectors [1][6][7]