Investment Rating - The industry investment rating is maintained at "Overweight" [2][26]. Core Insights - The report highlights that Indonesia's coal production is expected to decline significantly in 2026 due to the revision of the RKAB quota, with production set at approximately 600 million tons, a notable decrease from 740 million tons in 2025 [6][7]. - The reduction in coal production is anticipated to lead to a tightening of coal supply, which may drive up global coal prices, particularly for thermal coal [7]. - The Indonesian government is implementing policies to control coal production and exports, aiming to enhance domestic energy security and increase fiscal revenue through coal export taxes [7]. Summary by Sections Industry Overview - The total number of listed companies in the coal industry is 37, with a total market capitalization of approximately 198.55 billion yuan and a circulating market capitalization of about 194.41 billion yuan [2]. Regulatory Changes - The Indonesian Ministry of Energy and Mineral Resources is reviewing the RKAB quotas, which are crucial for coal mining operations. The approval rate for the first batch of RKAB in 2026 was only 71.49%, with significant reductions in approved quotas for many companies [6][7]. Market Dynamics - The report notes that the domestic market obligation (DMO) will be adjusted to ensure local demand is met before allowing coal exports. The DMO demand is expected to remain above 250 million tons [7]. - The report predicts that Indonesia's coal exports will face substantial declines starting in Q2 2026, which will further constrain global coal supply and potentially elevate prices [7]. Investment Recommendations - The report recommends focusing on high-elasticity stocks in the thermal coal sector, including companies like Yanzhou Coal Mining Company, Huayang Co., and others, as they are expected to benefit from rising coal prices [7].

Group 1 - The Indonesian government plans to impose an export tax of 1% to 5% on coal starting in 2026 to increase national revenue and optimize the tax structure while maintaining the international competitiveness of its coal industry [1] - The tax rate will be determined based on the calorific value and category of coal, with the government expecting limited impact on overall profitability [1] - The export tax is projected to generate approximately 20 trillion Indonesian Rupiah (around 1.2 billion USD) in additional revenue in 2026, which will help alleviate fiscal pressure and support the development of clean energy and downstream industries [1] Group 2 - The Indonesian government is advancing stricter foreign exchange management regulations, which are expected to take effect on January 1, 2026 [2] - The new regulations require natural resource exporters to deposit all foreign exchange earnings into state-owned banks for at least one year and allow a maximum of 50% of foreign exchange earnings to be converted into Indonesian Rupiah [2] - These measures aim to increase the retention of foreign exchange within the domestic banking system, enhance dollar supply, and stabilize the exchange rate of the Indonesian Rupiah [2]