Core Viewpoint - The report by Zhiyan Consulting analyzes the supply and demand dynamics of the coal mining industry in China from 2025 to 2031, highlighting market price trends and potential operational capabilities [1] Price Trends - As of mid-August 2025, the market price for Shanxi premium mixed coal (5500 kcal) is 695.1 RMB/ton, reflecting a year-on-year decline of 17.73% and a month-on-month increase of 3.72% [1] - The highest recorded price in the past five years for the same coal type was 1148.3 RMB/ton in mid-August 2022 [1]

Core Insights - The report by Zhiyan Consulting analyzes the supply and demand dynamics of the coal mining industry in China from 2025 to 2031, highlighting market trends and potential [1] Price Trends - As of mid-August 2025, the market price for Datong mixed coal (5800 kcal) is 733.4 RMB/ton, reflecting a year-on-year decline of 17.66% and a month-on-month increase of 3.81% [1] - The highest recorded price for Datong mixed coal in the same period over the past five years was 1233.3 RMB/ton in mid-August 2022 [1]

Group 1 - The company held its third temporary board meeting on September 5, 2025, with all nine directors participating in the vote [2] - The board approved the proposal to acquire a 30% stake in Yunnan Tianneng Mining Co., Ltd. through public bidding, aiming to enhance resource security [3][4] - The acquisition is part of a strategy to improve the company's coal resource self-sufficiency in Yunnan, with the mining rights covering an area of 40.24 km² and estimated resources of approximately 136 million tons [4] Group 2 - The board also approved the reappointment of Zhongshun Zhonghuan Accounting Firm as the auditor for the 2025 financial year, following a review by the audit committee [7][26] - The audit firm has a strong track record, with total revenue of approximately 2.17 billion yuan in 2024, and has audited 244 listed companies [17] - The audit fees for 2024 were set at 2.79 million yuan for financial report audits and 900,000 yuan for internal control audits, totaling 3.69 million yuan [24]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 20% against the market benchmark within the next six months [20]. Core Views - The company's performance is under pressure due to declining coal prices, with a significant year-on-year revenue drop of 44.6% in H1 2025 and a net profit decrease of 64.9% [2][4]. - Despite the challenges, there was a quarter-on-quarter improvement in production and sales volumes in Q2 2025, with coal production increasing by 6.8% and sales volume rising by 17.9% compared to the previous quarter [4][3]. - The company is expected to benefit from its coal type and geographical advantages, leading to industry-leading coal prices, alongside potential capacity increases from new mining projects [6][4]. Summary by Sections Financial Performance - In H1 2025, the company reported revenues of 20.61 billion yuan, with a net profit of 1.03 billion yuan, resulting in a net profit margin of 5.0% [2]. - The coal business generated revenues of 5.4 billion yuan in H1 2025, down 41.2% year-on-year, with a gross profit of 2.4 billion yuan, reflecting a 49.1% decline [4]. - The average selling price of coal in H1 2025 was 835 yuan per ton, a decrease of 27.0% year-on-year [4]. Production and Sales - The total coal production for H1 2025 was 8.91 million tons, down 13.7% year-on-year, while sales volume was 6.48 million tons, down 19.4% [4]. - In Q2 2025, coal production was 4.6 million tons, with sales volume reaching 3.5 million tons, marking a quarter-on-quarter increase [4][3]. Future Outlook - The report forecasts net profits for 2025-2027 to be 2.68 billion, 3.25 billion, and 3.54 billion yuan respectively, with corresponding EPS of 1.00, 1.21, and 1.32 yuan per share [6]. - The company is expected to see growth from its coal chemical products, with significant increases in ethanol production volumes [5].

Group 1 - The coal mining sector increased by 0.66% on September 5, with Shanxi Coking Coal leading the gains [1] - The Shanghai Composite Index closed at 3812.51, up 1.24%, while the Shenzhen Component Index closed at 12590.56, up 3.89% [1] - Key stocks in the coal mining sector showed significant price increases, with Shanxi Coking Coal rising by 4.44% to a closing price of 7.05 [1] Group 2 - The coal mining sector saw a net inflow of 347 million yuan from main funds, while retail investors experienced a net outflow of 456 million yuan [2] - Major stocks like Shanxi Coking Coal and China Shenhua experienced varying levels of fund inflow and outflow, indicating mixed investor sentiment [3] - The trading volume and turnover for key stocks in the coal sector reflected active market participation, with Shanxi Coking Coal achieving a turnover of 494 million yuan [1][2]

Report Industry Investment Rating There is no information provided regarding the report's industry investment rating in the given content. Core Viewpoints of the Report - "Anti-involution" has evolved from a social issue to a long - term policy, with its influence expected to be further established in the upcoming Central Economic Work Conference. It will reshape the price environment and industrial landscape. - The policy will lead to a reduction in over - capacity and price self - discipline, which may narrow the decline of PPI and stabilize inflation. - In the economic aspect, it may result in a co - existence of price increase and growth slowdown in the short term. - For the bond market, the initial impact may be less than 30BP, and it may push up the 10 - year Treasury bond yield by 12.8 - 17.06BP [1][3][44]. Summary According to the Directory 1 Policy: "Anti - involution" of "Generalization" and "Long - term" 1.1 "Anti - involution" Policy Context: From Regulating Industry Competition to Emphasizing Capacity Governance - Since the Politburo meeting in July 2024, the policy has evolved from focusing on unfair competition in emerging industries to capacity regulation and price stability in traditional industries, with a significant expansion in scope and a more prominent macro - regulatory nature [10]. 1.2 "Anti - involution" Policy Origin: Persistent Concerns about Low Inflation - The policy is a response to weak domestic market demand. In 2025, the CPI and PPI data show weak demand, and the policy aims to stabilize prices [15]. 1.3 "Anti - involution" Policy Expectation: A Long - cycle Policy Goal - It is expected to be further established as a strategic policy in the Central Economic Work Conference at the end of this year. It will affect product and service prices in over - capacity industries and may influence the macro - price level through the upstream and mid - stream of the industrial chain [20]. 2 Industry: Current Industry Profits and "Involution" Degree 2.1 High "Involution": Mid - and Downstream Manufacturing - Using industrial enterprise profit changes and long - term gross margin trends, 20 industries have seen profit declines this year, with coal mining and others having large drops. Over the past three years, industries like coal and oil and gas extraction have had significant gross margin declines [23][24]. 2.2 Low "Involution": High - concentration Industries - 20 industries have had profit increases this year, with 13 exceeding the industry average. Industries such as ferrous metal smelting and non - ferrous metal mining have high profit growth, and others like other mining and alcohol, tea, and beverage industries have seen continuous gross margin improvements [26]. 3 Impact: What Impact Does "Anti - involution" Have? 3.1 Impact on Prices: No Worries This Year, Long - term Increase - The policy affects the supply side through production cuts and price self - discipline, which will be transmitted to PPI. Future PPI decline may narrow, and inflation may stabilize [3][28]. 3.2 Impact on Growth: Affecting Production and Demand - The policy may directly affect enterprise production capacity and industrial added value. The constructed production index shows that price increase and growth slowdown may co - exist in the short term, and more coordinated macro - policies may be needed [32][37]. 3.3 Impact on the Bond Market: Lifting the Investment Return Rate Center - Referring to the 2015 supply - side reform, the initial impact on the bond market may be less than 30BP. The policy may push up the ROIC, which corresponds to an upward space of 12.8 - 17.06BP for the 10 - year Treasury bond yield [38][40].

Investment Rating - The report maintains a "Buy" rating for the coal mining sector, indicating a positive outlook for the industry moving forward [5]. Core Insights - The report emphasizes that the coal industry is experiencing a reversal rather than a rebound, with expectations for profitability to improve as coal prices have likely reached their lowest point [12][10]. - The report highlights that coal prices have begun to stabilize and recover, particularly in the context of both thermal and coking coal [15][19]. Summary by Sections Market Overview - As of September 1, 2025, the spot price for Q5500 thermal coal is reported at 695 CNY/ton, down 73 CNY/ton from the beginning of the year but up 77 CNY/ton from the lowest price in June [19]. - The average spot price for Q5500 thermal coal in Q2 2025 was 642 CNY/ton, reflecting a year-on-year decline of 211 CNY/ton (24.7%) and a quarter-on-quarter decline of 91 CNY/ton (12.5%) [19]. - Coking coal prices have also shown resilience, with the price for low-sulfur coking coal reported at 1480 CNY/ton, up 100 CNY/ton from the start of the year [23]. Performance Overview - The report notes that the coal sector has underperformed compared to the broader market, with the CSI 300 index rising by 16.37% from April 1 to September 1, 2025, while the coal index only increased by 8.99% [2][29]. - Among 26 sampled coal companies, 19 saw their stock prices rise, while 7 experienced declines during the same period [2]. Fund Holdings - As of Q2 2025, active funds held 0.43% of their portfolios in the coal sector, a slight decrease from Q1, while passive funds held 0.71%, also down from the previous quarter [3][34]. - The combined holding of both active and passive funds in the coal sector is 0.55%, reflecting a decline of 0.06 percentage points from Q1 2025 [3]. Financial Performance - The report indicates that coal companies' profits have been under pressure due to declining coal prices, with a total profit decline of 5.4% to 113.7% among the sampled companies [3][12]. - Notably, companies like Electric Power Energy and Kailuan achieved profit growth despite the overall downward trend in the sector [3]. Operational Insights - Coal companies are focusing on increasing production, improving quality, and reducing costs to mitigate the impact of falling prices [4][12]. - The total coal production for the sampled companies in H1 2025 was 586 million tons, a year-on-year increase of 4.5% [12]. Investment Recommendations - The report recommends stocks with strong earnings elasticity such as Lu'an Energy, Yanzhou Coal, and Jinkong Coal, while also highlighting key state-owned enterprises like China Shenhua and China Coal Energy for potential investment [10][11].

Core Viewpoint - The article analyzes the supply-side reform period from 2015 to 2018, highlighting the impact on asset performance and PPI, and contrasts it with the current anti-involution policies, providing insights for future investment opportunities and risks [2]. Group 1: Asset Review During Supply-Side Reform - The introduction of supply-side reform in November 2015 marked a bottoming out of coal and steel prices, leading to a relative outperformance against the market [3]. - In the early stages of the policy (end of 2015 to mid-2016), there was significant volatility in related assets due to the clash between "strong expectations" and "weak realities" [3]. - The trend of rising coal and steel prices began around June 2016, following the breakdown of local capacity reduction targets and improvements in economic fundamentals [3][4]. - The sustainability of the market rally was primarily driven by demand, with profitability in the coal and steel sectors improving due to rising prices, which were largely supported by demand [4][31]. Group 2: PPI Review During Supply-Side Reform - From the introduction of supply-side reform to the PPI turning positive, it took 10 months, with coal, steel, and non-metallic building materials contributing 49% to the PPI recovery [5][53]. - The recovery of PPI was also supported by improvements in the global economy, with oil and non-ferrous metals contributing 36% to the PPI rise during the same period [5][53]. - After PPI turned positive, the breadth of price increases across industries significantly improved, with the proportion of industries experiencing price increases remaining high [5][54]. Group 3: Differences Between Current Anti-Involution and Supply-Side Reform - The macroeconomic context and policy objectives differ significantly between the current anti-involution measures and the supply-side reform, with the latter focusing on reducing ineffective supply and expanding effective supply [7]. - The current anti-involution policies are expected to have a more gradual impact on prices compared to the rapid effects seen during the supply-side reform [7]. - The methods of capacity governance differ, with supply-side reform relying more on administrative measures, while anti-involution emphasizes legal and market-based approaches [7]. Group 4: Future Insights on PPI and Anti-Involution Related Assets - PPI is expected to enter a recovery cycle starting in August, but the timing for it to turn positive may be longer than in 2016, likely extending beyond the first quarter of next year [8]. - The performance of anti-involution related assets will depend on overall macro demand improvement, with key indicators such as manufacturing sector ROE, capacity utilization, and actual inventory growth showing no significant improvement yet [10]. - Active equity funds have a relatively low allocation to key anti-involution sectors, indicating that the momentum from fund reallocation may be weaker than during the supply-side reform period [11].

Core Insights - The market is experiencing fluctuations, with major indices adjusting and the Shanghai Composite Index falling below 3800 points, while the banking sector shows resilience with a 0.79% increase [7] - The low volatility dividend stocks are gaining attention as defensive assets amid market volatility and external uncertainties, potentially providing stability in the market [8] Market Performance - The CSI Low Volatility 100 Index decreased by 0.16%, with notable gainers including Tebian Electric Apparatus and Jiangsu Guotai, while Agricultural Bank led the declines [3] - The Hang Seng High Dividend Yield Index rose by 0.96%, with Hang Lung Properties and China Hongqiao among the top performers [5] - The National Large Cap Value Index fell by 0.64%, with China Merchants Energy leading the gains [7] ETF Performance - The CSI Low Volatility 100 ETF (159307) is currently priced at 1.08 yuan, with a 3-month cumulative increase of 3.52% [3] - The Hang Seng High Dividend ETF (513690) has seen a 3-month cumulative increase of 7.99%, currently priced at 1.08 yuan [5] - The National Large Cap Value ETF (159391) is priced at 1.1 yuan, with a 3-month cumulative increase of 4.52% [7] Liquidity and Trading Volume - The trading volume for the CSI Low Volatility 100 ETF was 6.3876 million yuan, with a turnover rate of 0.5% [3] - The Hang Seng High Dividend ETF had a trading volume of 79.8461 million yuan, with a turnover rate of 1.63% [5] - The National Large Cap Value ETF recorded a trading volume of 378,700 yuan, with a turnover rate of 0.08% [7] Fund Characteristics - The CSI Low Volatility 100 ETF has a current scale of 1.277 billion yuan and a share count of 1.184 billion, both reaching a one-year high [9] - The Hang Seng High Dividend ETF has a scale of 4.860 billion yuan, focusing on high dividend yield stocks [9] - The National Large Cap Value ETF tracks the National Large Cap Value Index, emphasizing high dividend yielding leading companies [9] Sector Analysis - The top sectors for the CSI Low Volatility 100 Index include banking (20.6%), transportation (13.3%), and coal (7.4%) [8] - The Hang Seng High Dividend Index's leading sectors are real estate (17.6%), banking (15.3%), and coal (10.8%) [8] - The National Large Cap Value Index's top sectors are dominated by financials, with significant representation from major banks [9]

Market Overview - The Hong Kong stock market continued its downward trend, with the Hang Seng Index closing at 25,059, down 1.12% for the day and up 24.92% year-to-date[3] - The Hang Seng Technology Index fell by 1.85%, while the Hang Seng China Enterprises Index decreased by 1.25%, reflecting a broader market decline[3] - Major sectors such as semiconductor and chip stocks led the decline, while film, banking, and dining stocks showed resilience with gains[9] Oil and Gold Market - Oil stocks declined as investors focused on the upcoming OPEC+ meeting, with international oil prices dropping over 2% on September 4[9] - Gold stocks experienced significant losses, with Tongguan Gold falling nearly 9%, despite spot gold prices reaching new highs recently[9] U.S. Market Performance - On September 4, U.S. markets saw all three major indices rise, with the S&P 500 closing at a record high, up 0.83%[9] - The ADP report indicated a weaker-than-expected increase in private sector employment, with only 54,000 jobs added in August, raising expectations for a potential Fed rate cut[9] Company Highlights - Broadcom's Q3 adjusted net revenue reached $15.95 billion, exceeding analyst expectations, and the company projected Q4 revenue of approximately $17.4 billion, also above forecasts[10] - Lululemon lowered its fiscal year earnings forecast, with Q2 net revenue of $2.53 billion slightly below expectations, leading to a nearly 16% drop in after-hours trading[10] Japanese Market Insights - The Japanese stock market rebounded on September 4, with the Nikkei 225 index rising by 1.5%, driven by strong performances in the technology sector[13] - Notable gains were seen in SoftBank Group, which surged 6.5%, and Advantest, which rose 4.7%[13]