Investment Rating - The industry investment rating is maintained at "Accumulate" [1] Core Viewpoints - The current fundamentals of the port thermal coal market remain weak, with a stable supply and weak downstream demand. However, due to the upcoming maintenance of the Daqin Line in April and the release of coal demand from the chemical industry, prices in the production areas have increased, leading to a slight rise in port coal prices [2] - In the short term, coal prices are expected to fluctuate due to seasonal changes and demand dynamics, with a focus on resource stocks as a preferred investment [3] Summary by Sections 1. Market Review - From March 16 to March 21, the port thermal coal spot price increased by 6 CNY/ton, reaching 735 CNY/ton [1] - The average daily coal inflow to the four ports in the Bohai Rim was 2.0143 million tons, an increase of 10,800 tons week-on-week, with a growth rate of 0.54% [1] - The average daily coal outflow from the four ports was 1.9298 million tons, an increase of 178,300 tons week-on-week, with a growth rate of 10.18% [1] 2. Production Area Coal Prices - As of March 21, the price of 5500 kcal thermal coal in Datong South Suburb increased by 46 CNY/ton to 631 CNY/ton, while the price of 6000 kcal thermal coal in Yanzhou rose by 80 CNY/ton to 930 CNY/ton [18] - The port thermal coal price at Qinhuangdao increased by 6 CNY/ton to 735 CNY/ton [18] 3. Inventory and Shipping - The coal inventory at the Bohai Rim four ports increased to 27.343 million tons, up by 790,000 tons week-on-week, with a growth rate of 2.99% [33] - The average daily number of anchored vessels in the Bohai Rim four ports was 85, reflecting a 35% increase week-on-week [33] - The average shipping cost on domestic routes rose by 8.77 CNY/ton to 44.04 CNY/ton, marking a 25% increase [34] 4. Recommendations - The report suggests focusing on resource stocks, particularly recommending companies like Haohua Energy and Guanghui Energy as elastic targets in the thermal coal sector [3][38]

Investment Rating - The report maintains a "Recommended" rating for the coal mining industry [1] Core Views - The coal prices at northern ports have stopped declining and increased, indicating resilience in prices during the off-season, which opens up space for the peak season [1] - The supply side shows a slight increase in domestic production, while the demand side reflects a decrease in electricity consumption during the traditional off-season, but non-electric demand remains strong [4][5] - The report emphasizes the long-term upward trend in coal prices driven by factors such as rising labor costs, increased safety and environmental investments, and government taxation [7] Summary by Sections 1. Thermal Coal - As of March 20, the price of thermal coal at northern ports is 735 RMB/ton, up by 6 RMB/ton week-on-week [14] - Production capacity utilization in the Shanxi region increased by 0.89 percentage points week-on-week [14] - The daily consumption of six major power plants decreased by 31,000 tons week-on-week [14] - The inventory of six major power plants increased by 174,000 tons to 13.141 million tons, down 343,000 tons year-on-year [14] - The report notes that while domestic supply is stable, the market is influenced by tight import coal supply and speculative demand [14] 2. Coking Coal - The capacity utilization rate for coking coal mines increased by 1.49 percentage points to 87.2% [5] - The average daily crossing volume at Ganqimaodu port is 1,379 cars, up by 1 car week-on-week [5] - The price of main coking coal at ports is 1,620 RMB/ton, up by 50 RMB/ton week-on-week [41] 3. Coke - The price of coke remains stable, with expectations for price increases in the market [6] - The production rate of independent coking plants is 72.85%, up by 0.4 percentage points week-on-week [66] - The average profit per ton of coke has increased to approximately 38 RMB/ton, up by 41 RMB/ton week-on-week [64] 4. Anthracite - The price of anthracite remains stable, with production conditions affecting quality and output [80] 5. Key Companies and Investment Logic - The report highlights several key companies for investment, including China Shenhua, Shaanxi Coal and Chemical Industry, and Yanzhou Coal Mining Company, recommending a focus on their value attributes [7][9]

Investment Rating - The investment rating for the coal mining industry is "Positive" [2] Core Viewpoints - The current phase is seen as the beginning of a new upward cycle in the coal economy, with a resonance between fundamentals and policies, making it an opportune time to invest in the coal sector [11][12] - The coal price is expected to stabilize and rebound, ending a continuous decline since March 4, with limited room for price correction due to factors such as the inverted import coal price and ongoing geopolitical tensions [11][12] - The coal sector is characterized by high barriers, strong cash flow, high return on equity (ROE), and high dividends, indicating that quality coal companies remain undervalued with potential for overall valuation improvement [11][12] Summary by Sections 1. Coal Price Tracking - As of March 20, the market price for Qinhuangdao port thermal coal (Q5500) is 731 CNY/ton, unchanged from the previous week [28] - The price for Shanxi-produced coking coal at Jingtang port is 1600 CNY/ton, up by 10 CNY/ton [30] - International thermal coal prices show mixed trends, with Newcastle thermal coal at 86.3 USD/ton, down by 1.7 USD/ton [28][30] 2. Coal Supply and Demand Tracking - The capacity utilization rate for sample thermal coal mines is 91.1%, an increase of 0.6 percentage points [45] - The daily coal consumption in coastal provinces increased by 238,000 tons/day (+12.62%), while inland provinces saw a decrease of 87,000 tons/day (-2.79%) [46] - The steel furnace operating rate is reported at 79.8%, up by 1.44 percentage points [11][12] 3. Coal Inventory Situation - As of March 19, coal inventory in inland provinces decreased by 2.413 million tons (-3.06%), while coastal provinces saw a slight decrease of 52,000 tons (-0.15%) [46] - The available days of coal in inland provinces remained stable, while coastal provinces experienced a decrease of 0.5 days [46] 4. Key Companies to Watch - Focus on stable operators such as China Shenhua, Shaanxi Coal, and China Coal Energy [11][12] - Companies with significant performance elasticity include Yanzhou Coal, China Power Investment, and Guanghui Energy [11][12] - Special attention to high-quality metallurgical coal companies like Lu'an Environmental Energy and Shanxi Coking Coal [11][12]

Group 1: Market Overview - Credit bond yields mostly declined, with short to medium-term bonds performing relatively well amid market volatility and cautious sentiment[1] - The geopolitical situation and inflation expectations continue to impact market dynamics, leading to a mixed performance in credit spreads[1] Group 2: "Fixed Income +" Fund Redemption Impact - The scale of "Fixed Income +" funds grew rapidly, increasing from CNY 693.5 billion at the end of 2024 to CNY 1.581 trillion by the end of 2025[2] - The bond allocation in mixed secondary bond funds reached 82.08%, with 37% in financial bonds, 35% in public bonds, and 15% in government financial bonds[2] Group 3: Redemption Effects and Future Outlook - Recent net redemptions from "Fixed Income +" funds have intensified, but the credit bond market remains stable with minimal impact from these redemptions[2] - Seasonal demand for asset management products in Q2 may mitigate the negative effects of redemptions, with April and July typically seeing increased credit bond allocations[2] Group 4: Investment Strategy - For bonds with maturities of 3 years or less, the expected yield range is 1.61%-1.94%, with credit spreads between 14-35 basis points[3] - Bonds in the 4-5 year range, particularly those rated AAA and AA+, show yields around 1.88%-2.02% and credit spreads of 22-32 basis points, indicating potential investment opportunities[3]

Investment Rating - The investment rating for the coal mining industry is "Positive" [2] Core Viewpoints - The current phase is seen as the beginning of a new upward cycle in the coal economy, with a resonance between fundamentals and policies, making it an opportune time to invest in the coal sector [11][12] - The coal market is characterized by a supply-demand balance in the short term, but a medium to long-term supply gap remains, supporting a bullish outlook on coal prices [11][12] - The report emphasizes the resilience of coal prices despite seasonal demand fluctuations, with expectations for a significant increase in the coal price center in 2026 [11][12] Summary by Sections Coal Price Tracking - As of March 20, the market price for Qinhuangdao port thermal coal (Q5500) is 731 CNY/ton, unchanged from the previous week [28] - The price for Shanxi-produced main coking coal at Jingtang port is 1600 CNY/ton, up by 10 CNY/ton [30] - International thermal coal prices show mixed trends, with Newcastle coal at 86.3 USD/ton, down by 1.7 USD/ton [28][30] Coal Supply and Demand Tracking - The capacity utilization rate for sample thermal coal mines is 91.1%, an increase of 0.6 percentage points [45] - The daily coal consumption in coastal provinces increased by 238,000 tons/day (+12.62%), while inland provinces saw a decrease of 87,000 tons/day (-2.79%) [46] - The report notes a significant increase in the coal consumption for chemical industries and a rise in the operating rate of steel furnaces [11][12] Coal Inventory Situation - As of March 19, coal inventories in inland provinces decreased by 2.413 million tons (-3.06%), while coastal provinces saw a slight decrease of 52,000 tons (-0.15%) [46] - The report highlights the importance of monitoring inventory levels as they impact price stability and market dynamics [11][12] Investment Recommendations - The report suggests focusing on companies with strong fundamentals such as China Shenhua, Shaanxi Coal, and China Coal Energy, as well as those with high earnings elasticity like Yanzhou Coal and Guohua Energy [11][12] - The coal sector is viewed as a high-performance, high-cash flow, and high-dividend asset class, with a favorable long-term outlook [11][12]

Core Insights - The report emphasizes the impact of self-discipline in interbank deposits, the steepening of the yield curve, and the absence of a turning point in monetary policy, suggesting that adjustments in the long end are manageable. This creates opportunities to capitalize on the certainty of the short end and to speculate on the narrowing of term spreads [6][11][12]. Weekly Core Views and Bond Market Strategy - The main trading logic for the week revolves around three key themes: escalating geopolitical conflicts driving up oil prices, strong economic data from January and February reinforcing recovery expectations, and the ongoing impact of self-discipline in interbank demand supporting short-end performance [11][12]. - The self-discipline in interbank deposits is expected to lead to lower issuance rates for interbank certificates of deposit, as banks anticipate a decline in funding costs. This trend is further supported by a decrease in the yield on demand deposits, enhancing the demand for liquid alternative assets like interbank certificates [11][12]. - Geopolitical tensions have led to rising oil prices, creating temporary disturbances in the bond market. However, the report suggests that the actual impact of external inflation on domestic fundamentals and monetary policy remains limited, with the central bank likely to maintain a moderately accommodative stance [12][13]. - Economic data from January and February shows structural recovery, particularly in infrastructure investment, which supports investment stability. However, consumer recovery remains weak, and the real estate sector is still in a bottoming phase, indicating that domestic demand is insufficient [12][13]. Future Market Strategy - The report suggests maintaining a steep yield curve, with support for the short end and manageable risks for the long end. It recommends extending duration to speculate on opportunities for curve flattening. The strategy includes continuing to allocate to 1-year AA- certificates of deposit to capture short-end certainty [13]. - In terms of credit strategy, it is advised to continue investing in 3-5 year perpetual bonds, with a tilt towards 5-year products as the 3-year options approach their profit-taking points. High-yield real estate bonds are also recommended for defensive positioning against market volatility [13]. - The overall bond market is characterized by differentiation, with the short to medium end performing strongly while the long end experiences adjustments. The report notes a slight decline in funding rates during the week [13][16].

Core Viewpoints - The coal prices have stabilized and are on the rise, with demand for thermal power and cement showing positive year-on-year growth in the first two months of 2026 [1][73] Market Dynamics - Thermal coal prices have seen slight increases, with the CCI5500 thermal coal index reported at 736 RMB/ton, remaining stable week-on-week [10][74] - In the production areas, prices for thermal coal have generally increased, with Shanxi region prices rising by 8 RMB/ton and Northern Shaanxi by 10-17 RMB/ton [10] - The utilization rate of sample thermal coal mines is at 89.7%, up by 0.9 percentage points week-on-week, indicating a recovery in production [20] - The inventory of thermal coal at major ports has increased by 2.4% week-on-week, reaching 6,564,000 tons [20] Industry Perspective - The coal industry is expected to shift from a loose supply-demand balance to a tighter one in 2026, with domestic production growth significantly declining and international supply from Indonesia also expected to decrease [4] - The geopolitical situation is anticipated to further support global energy prices and coal demand, with the coal industry’s price-to-earnings ratio (TTM) at 19.6 times and price-to-book ratio at 1.83 times as of March 20 [4] - Key companies in the sector include Yanzhou Coal Mining, China Shenhua Energy, and Shaanxi Coal and Chemical Industry, which are expected to benefit from rising energy prices [4] Focus on Key Companies - China Shenhua Energy (601088.SH) has a target price of 46.85 RMB/share with a current price of 49.55 RMB, rated as "Buy" [5] - Shaanxi Coal and Chemical Industry (601225.SH) has a target price of 26.63 RMB/share with a current price of 27.16 RMB, also rated as "Buy" [5] - Yanzhou Coal Mining (600188.SH) has a target price of 16.79 RMB/share with a current price of 21.06 RMB, rated as "Buy" [5]

Report Industry Investment Rating No information provided in the report. Core Viewpoint The interest rate curve continues to steepen, with the spreads of short - and medium - term low - quality bonds compressing. The spreads of most urban investment bonds decline slightly, the spreads of industrial bonds generally decline slightly, but the spreads of mixed - ownership real estate bonds rebound. The yields of secondary and perpetual bonds decline across the board, and the spreads of 10Y bonds converge significantly. The excess spreads of 3Y industrial perpetual bonds converge, while the excess spreads of urban investment bonds widen [3][4][5]. Summary by Directory 1. Interest rate curve continues to steepen, short - and medium - term low - quality spreads compress - From March 16th to March 20th, short - and medium - term interest - rate bonds generally oscillated downward, long - term bonds remained weak, and the interest rate curve further steepened. The yields of 1Y, 3Y, 5Y, and 7Y China Development Bank bonds decreased by 2BP, while the yield of 10Y bonds increased by 1BP [10]. - Credit bonds also showed the characteristics of strong short - end and weak long - end. The yields of AA and above - grade 1Y credit bonds decreased by 2 - 3BP, and the yield of AA - grade bonds decreased by 5BP; the yields of AA+ and above - grade 3Y credit bonds decreased by 2BP, and the yields of AA and below - grade bonds decreased by 4BP; the yields of all grades of 5Y bonds remained flat; the yields of AA+ and above - grade 7Y bonds decreased by 1BP, and the AA - grade yield remained flat; the yields of all grades of 10Y bonds increased by 1BP [10]. - The spreads of short - and medium - duration low - quality varieties compressed. The spread of 1Y AAA - grade bonds remained flat, the spreads of AA+ and AA grades converged by 1BP, and the AA - grade spread compressed by 3BP; the spreads of AA+ and above - grade 3Y bonds remained flat, and the spreads of AA and AA - grades converged by 2BP; the spreads of all grades of 5Y bonds widened by 2BP; the spreads of all grades of 7Y bonds widened by 1 - 2BP; the spreads of 10Y bonds widened by 1BP [10]. 2. The spreads of most urban investment bonds decline slightly by 1BP - The spreads of external - rated AAA, AA+, and AA urban investment platforms generally decreased by 1BP compared with last week. In different regions, most spreads decreased by 0 - 1BP. Among AAA platforms, Inner Mongolia's spread decreased by 3BP; among AA+ platforms, Hainan's spread remained flat, Inner Mongolia's spread increased by 1BP, Tianjin, Gansu, and Ningxia's spreads decreased by 2BP, and Yunnan's spread decreased by 4BP; among AA platforms, the spreads of Shanghai and Shaanxi decreased by 2 - 3BP [15]. - In terms of administrative levels, the spreads of provincial, municipal, and district - county platforms generally decreased by 1BP. Specifically, among provincial platforms, Shandong's spread decreased by 2BP, and Inner Mongolia's spread decreased by 4BP; among municipal platforms, the spreads of Shaanxi, Ningxia, and Yunnan decreased by 2 - 3BP; among district - county platforms, Guizhou's spread decreased by 3BP [19]. 3. The spreads of industrial bonds generally decline slightly, and the spreads of mixed - ownership real estate bonds rebound - This week, the spreads of industrial bonds generally declined slightly, while the spreads of mixed - ownership real estate bonds rebounded. The spreads of central and state - owned enterprise real estate bonds converged by 1BP, the spreads of private real estate bonds converged by 2BP, and the spreads of mixed - ownership real estate bonds widened by 20BP. The spreads of Longhu converged by 2BP, Midea Real Estate converged by 3BP, Vanke's spread widened by 221BP, Huafa's spread widened by 9BP, and Poly's spread converged by 1BP [25]. - The spreads of AA+ - grade coal bonds converged by 4BP, and the spreads of other grades converged by 1BP; the spreads of AAA - grade steel bonds converged by 1BP, and the spreads of AA+ - grade steel bonds converged by 4BP; the spreads of AAA and AA+ - grade chemical bonds both converged by 1BP. The spreads of Shaanxi Coal and HBIS converged by 1BP, and the spread of Jinneng Coal Industry converged by 2BP [25]. 4. The yields of secondary and perpetual bonds decline across the board, and the spreads of 10Y bonds converge significantly - The yields of secondary and perpetual bonds declined across the board, and the spreads of 10Y bonds converged significantly. Specifically, the yields of all grades of 1Y secondary capital bonds decreased by 1 - 2BP, and the spreads widened by 0 - 1BP; the yields of all grades of perpetual bonds decreased by 2BP, and the spreads remained flat. The yields of all grades of 3Y secondary and perpetual bonds decreased by 3BP, and the spreads converged by 1BP; the yields of all grades of 5Y secondary capital bonds and AAA - grade perpetual bonds decreased by 1 - 2BP, and the spreads widened by 1 - 2BP, while the yields of AA+ and AA - grade perpetual bonds decreased by 3 - 4BP, and the spreads converged by 1 - 2BP; the yields of all grades of 10Y secondary and perpetual bonds decreased by 2 - 3BP, and the spreads converged by 2 - 3BP [32]. 5. The excess spreads of 3Y industrial perpetual bonds converge, and the excess spreads of urban investment bonds widen - This week, the excess spreads of 3Y industrial AAA - grade perpetual bonds converged by 1.01BP to 8.96BP, reaching the 10.86% quantile since 2015. The excess spreads of 5Y industrial perpetual bonds remained the same as last week at 13.20BP, reaching the 33.02% quantile since 2015. The excess spreads of 3Y urban investment AAA - grade perpetual bonds widened by 1.00BP to 7.06BP, reaching the 15.92% quantile; the excess spreads of 5Y urban investment perpetual bonds widened by 0.56BP to 10.64BP, reaching the 18.71% quantile [35]. 6. Credit spread database compilation instructions - The overall market credit spreads, commercial bank secondary and perpetual spreads, and urban investment/industrial perpetual bond credit spreads are calculated based on ChinaBond medium - and short - term notes and ChinaBond perpetual bonds data, with historical quantiles starting from the beginning of 2015. The credit spreads related to urban investment and industrial bonds are sorted and counted by Huafu Securities Research Institute, with historical quantiles starting from the beginning of 2015 [37]. - The credit spreads of industrial and urban investment individual bonds = the ChinaBond valuation (exercise) of individual bonds - the yield to maturity of the same - term China Development Bank bonds (calculated by linear interpolation method), and finally the credit spreads of the industry or regional urban investment are obtained by the arithmetic average method. The excess spreads of bank secondary capital bonds/perpetual bonds = the credit spreads of bank secondary capital bonds/perpetual bonds - the credit spreads of bank ordinary bonds of the same grade and term. The excess spreads of industrial/urban investment perpetual bonds = the credit spreads of industrial/urban investment perpetual bonds - the credit spreads of medium - and short - term notes of the same grade and term [39]. - Sample screening criteria: Both industrial and urban investment bonds select medium - term notes and public - offering corporate bonds as samples, and exclude guaranteed bonds and perpetual bonds. If the remaining term of an individual bond is less than 0.5 years or more than 5 years, it will be excluded from the statistical sample. Industrial and urban investment bonds are all externally - rated by the issuer, while commercial banks use ChinaBond implicit bond ratings [39].

- The provided content does not include any quantitative models or factors, nor their construction, evaluation, or backtesting results

Market Outlook - The report maintains a neutral to optimistic view on the market, considering various factors such as international conditions, economic cycles, domestic policies, capital flows, market sentiment, and broad valuations. The Shanghai Composite Index is expected to stabilize gradually after mid-March, with growth indices potentially stabilizing by the end of April. A "systematic slow bull" market is anticipated, with the index likely to challenge the 5178-2440 range in the second half of Q2 2026 [5]. Style Rotation - The report indicates that mid to large-cap stocks will outperform, with a balanced approach between growth and value stocks. Public fund pricing power remains stable, and global liquidity is still relatively loose, supporting the dominance of mid to large-cap styles [10]. Industry Allocation - The industry allocation strategy focuses on both new and traditional energy sectors, with a particular emphasis on cyclical consumption. Key directions include: 1. Strong performers in new energy, particularly benefiting from "computing power and electricity synergy" and supply clearing in power equipment (solar, wind, lithium batteries). 2. Traditional industries are expected to undergo value reassessment, with a focus on "heavy asset" sectors such as electricity, communication services, fiberglass, steel, coke, gas, and coal mining. 3. Within cyclical products, attention should be given to relatively underperforming sectors like basic chemicals and agriculture. 4. In consumer goods, sectors such as pharmaceuticals (innovative drugs) and consumer services are highlighted due to policy support and potential for increased service consumption [7]. Thematic Investment - The report emphasizes the transformative impact of AI on value creation, highlighting investment opportunities in "HALO" trading and the overseas expansion of tokens. It suggests focusing on AI agents, embodied intelligence, and solid-state batteries as key thematic investment opportunities [8]. Economic Analysis - The report notes an improvement in economic conditions at the beginning of the year, driven by policies such as the "old-for-new" initiative and increased consumer demand during the holiday season. The issuance of special bonds and new financial tools is expected to support investment growth, while exports have shown significant strength, contributing positively to the economy [25][26]. Price Trends - The report indicates a positive trend in prices, with CPI and PPI showing signs of recovery. The core CPI reached a new high since 2019, driven by strong demand for gold and services. The PPI is also expected to turn positive sooner than anticipated, influenced by rising international oil prices and ongoing demand in the AI sector [30][34]. Policy Insights - The report outlines a shift in policy focus from quantity to quality, with a moderate expansion in fiscal policy and a continued emphasis on structural monetary policy. The GDP growth target for 2026 has been adjusted to a range of 4.5%-5%, reflecting a more pragmatic approach to economic development [37][38]. Capital Flow Analysis - The report highlights a "residential deposit migration" as a significant source of incremental capital, which may drive the index upward. The balance of margin financing and various equity funds has shown a balanced increase since July 2025, indicating a stable market environment [41][45]. Valuation Assessment - The report notes that major broad-based valuations are currently high, with the Shanghai Composite Index and other indices showing elevated price-to-earnings ratios compared to historical averages. This suggests that further market gains will require earnings growth to support high valuations [63][68].