Core Viewpoint - The coal industry is experiencing a decline in profitability, with 2025 H1 performance exceeding expectations for leading companies, indicating that 2025 H1 may represent a bottom for the next 3-5 years [1][2]. Demand Side - In 2025 H1, thermal power generation accounted for 64.8% of total electricity generation, remaining the primary source [2]. - Total electricity consumption reached 4.8 trillion kWh in 2025 H1, a year-on-year increase of 3.7% [2]. - The total electricity generation for the year is projected at 4.5 trillion kWh, reflecting a 2.3% year-on-year growth [2]. - Thermal power generation in 2025 H1 was 2.94 trillion kWh, down 2.4% year-on-year [2]. - In 2025 Q2, total electricity consumption increased to 2.46 trillion kWh, showing a 6% year-on-year growth [2]. Supply Side - The raw coal production in 2025 H1 was 2.4 billion tons, up 5.4% year-on-year, but down 8 million tons compared to 2024 H2, indicating self-imposed production cuts in the industry [2][3]. Coal Prices - The average price of thermal coal (Q5500) at Huanghua Port in 2025 H1 was 685.9 yuan/ton, a decrease of 22.4% year-on-year [2]. - In Q1, the average price was 730.7 yuan/ton, down 19.86% year-on-year, while in Q2, it dropped to 641.7 yuan/ton, down 25.3% [2]. - The average price of coking coal at Jingtang Port in 2025 H1 was 1377.7 yuan/ton, a decline of 38.5% year-on-year [2]. - In Q1, the average price was 1440.86 yuan/ton, down 42.27% year-on-year, and in Q2, it was 1315.3 yuan/ton, down 37.2% [2]. Financial Performance - The coal sector (Shenwan) reported total revenue of 578.1 billion yuan in 2025 H1, a year-on-year decline of 18.6%, with a net profit attributable to shareholders of 54.2 billion yuan, down 31.3% [3]. - In 2025 Q2, the sector achieved revenue of 293.5 billion yuan, a year-on-year decline of 16.5%, but a quarter-on-quarter increase of 3.1%, with a net profit of 24.2 billion yuan, down 37% year-on-year and 19.7% quarter-on-quarter [3]. - The average selling price of self-produced coal for 13 A-share listed companies was 520 yuan/ton in 2025 H1, down 22.8% year-on-year [3]. - The cost of coal per ton was 345 yuan, a decrease of 19.6% year-on-year, resulting in a gross profit of 175 yuan per ton, down 28.6% year-on-year [3]. Cash Flow and Debt - The operating cash flow for the coal sector significantly declined in 2025 H1 compared to 2024, with expenses remaining stable but the expense ratio increasing [4]. - The coal sector's debt ratio improved, decreasing from 49.2% in 2020 to 47.2% in 2025 H1, benefiting from higher industry profitability and optimized asset structures [4].