Investment Rating - The report rates the coal industry as "Buy" [1] Core Insights - Historical review indicates that geopolitical conflicts may stabilize seasonal price declines and elevate average prices [3] - The geopolitical tensions involving the US, Israel, and Iran have intensified, exceeding market expectations, leading to high oil and natural gas prices, which are expected to continue rising and influence energy prices [4] - The international coal price has increased by 20% due to the surge in natural gas prices, raising expectations for global coal demand amid high energy prices [4] - Domestic supply remains stable, but the significant rise in overseas coal prices may lead to a reduction in imports, potentially lifting domestic seasonal coal price bottoms [4] - The peak supply-demand pressure is expected to end around March-April, with a subsequent increase in electricity coal demand starting in May [4] Summary by Sections Thermal Coal Data Tracking - As of February 27, 2026, the price of Q5500 thermal coal at Huanghua Port is 749 CNY/ton, up 27 CNY/ton (3.7%) from the previous week [4] - Domestic supply remains stable, with a slight decrease in imports expected throughout the year [4] - Demand during the off-season is showing significant improvement, with Q3 profits expected to rebound [4] Coking Coal Data Tracking - As of February 27, 2026, the price of main coking coal at Jingtang Port is 1700 CNY/ton, unchanged from the previous week [4] - Daily iron and steel production has slightly decreased, but demand is expected to remain strong [4] Inventory and Price Trends - As of March 6, 2026, Jingtang Port's main coking coal price is 1610 CNY/ton, down 5.3% from the previous week, with total coking coal inventory at three ports at 2.612 million tons, down 1.6% [4] - The price of Australian Newcastle Q5500 coal has increased by 2 USD/ton (1.7%), while domestic coal remains cheaper than imported coal by 85 CNY/ton [4] Long-term Price Agreements - The annual long-term price for Q5500 thermal coal at Northern Ports is 682 CNY/ton, up 2 CNY/ton (0.3%) from the previous month [30] - The comprehensive trading price for Q5500 thermal coal at Qinhuangdao is 695 CNY/ton, up 5 CNY/ton (0.7%) from the previous week [30] Market Performance - The coal sector outperformed the market last week, with the coal sector rising by 3.50% while the Shanghai Composite Index fell by 0.93% [69] - Notable gainers include Baofeng Energy (19.64%) and Zhongmei Energy (14.24%) [69]

Investment Rating - The industry investment rating is not explicitly stated in the provided documents, but it can be inferred that there is a positive outlook based on the focus on growth areas such as carbon reduction and renewable energy integration [7]. Core Insights - The government work report emphasizes the dual carbon goals, focusing on zero-carbon parks, computational power integration, and circular economy initiatives. By 2025, it aims for a 5% reduction in carbon emissions per unit of GDP and an increase of 370 million kilowatts in renewable energy installations, with non-fossil energy accounting for nearly 40% of total power generation [2]. - The electricity sector is experiencing a shift driven by three main factors: the integration of computational power by electricity companies, validation of energy security and dual carbon goals during the Two Sessions, and a market adjustment since November 2022 leading to low public holdings [3]. - The coal sector is expected to benefit from demand elasticity and supply constraints, with a projected increase in electricity consumption and coal demand due to geopolitical tensions and export restrictions [4]. Summary by Sections Government Policy and Goals - The report outlines specific targets for 2025 and 2026, including a 3% reduction in energy consumption per unit of GDP and a 3.8% reduction in carbon emissions per unit of GDP. It highlights the importance of pollution control and the development of a green low-carbon economy [2]. Electricity Sector Dynamics - The report identifies three driving factors for the electricity market: the strategic moves by power companies towards computational power, the reaffirmation of energy policies during the Two Sessions, and the current low valuation of the sector following a market adjustment [3]. Coal Market Outlook - The coal market is highlighted for its demand elasticity, with expectations of increased consumption driven by low base effects and geopolitical factors affecting supply. The report notes a recent price increase for thermal coal, indicating a potential upward trend in the market [4]. Investment Opportunities - The report suggests focusing on specific timelines for investment opportunities: current coal dynamics, upcoming quarterly reports for thermal power, and monitoring hydropower during the flood season. Key stocks to watch include Yanzhou Coal Mining, China Shenhua Energy, and Huaneng Power International [5].

- The report discusses multiple quantitative timing models for A-shares, including the "Volume Model" (neutral), "Feature Institutional Model" (bearish), "Feature Volume Model" (bearish), "Smart Algorithm Model for CSI 300" (neutral), and "Smart Algorithm Model for CSI 500" (neutral) [1][10][67] - For mid-term A-share models, the "Limit Up and Down Model" is neutral, while the "Up and Down Return Difference Model" is bullish for most broad-based indices. The "Calendar Effect Model" remains neutral [1][11][68] - The long-term A-share model, "Momentum Model," is neutral [1][12][69] - Comprehensive A-share models, such as "Comprehensive Weapon V3 Model" and "Comprehensive Guozheng 2000 Model," are bearish [1][13][70] - For Hong Kong stocks, the mid-term "Turnover to Volatility Model" is bearish, while the "Up and Down Return Difference Model" and its similar variant are neutral [1][14][71] - The report emphasizes that timing strategies are built on multi-cycle and multi-strategy systems, including short-term, mid-term, and long-term models. These models incorporate factors like price-volume, acceleration, trend, momentum, and limit up/down to achieve a balance between defensive and aggressive strategies [8] - The backtesting results for the "Double Bottom Pattern" show a weekly decline of -2.25%, underperforming the Shanghai Composite Index by -1.32%. Since December 31, 2020, the cumulative return of this pattern is 24.42%, outperforming the Shanghai Composite Index by 5.67% [41][50] - The "Cup and Handle Pattern" experienced a weekly decline of -2.18%, underperforming the Shanghai Composite Index by -1.25%. Since December 31, 2020, the cumulative return of this pattern is 21.94%, outperforming the Shanghai Composite Index by 3.19% [41][45]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the valuation comparisons of various indices and sectors within the A-share market, indicating that the overall market is at historically high valuation percentiles, particularly in the real estate, automation equipment, and electronics sectors [2][5][6] - The report tracks the mid-term economic conditions across several industries, noting significant price fluctuations in raw materials and end products, particularly in the new energy and technology sectors [3][4][8] Valuation Summary A-share Valuation (as of March 6, 2026) - The overall market PE is 22.6x, with a PB of 1.9x, placing it at the 83rd and 51st historical percentiles respectively [2][5] - Specific indices such as the Shanghai Composite and CSI 500 show varying PE and PB ratios, with the CSI 500 at 37.5x PE and 2.6x PB, indicating a high valuation relative to historical data [2][5] Industry Valuation Comparisons - Industries with PE valuations above the 85th percentile include real estate, automation equipment, retail, electronics, and IT services [2][8] - Industries with PB valuations above the 85th percentile include electronics (semiconductors) and communications [2][8] - Sectors such as securities, food and beverage, medical services, and white goods are noted to have both PE and PB valuations below the 15th percentile, indicating potential undervaluation [2][8] Mid-term Economic Conditions Tracking New Energy - In the photovoltaic sector, upstream prices for polysilicon have decreased significantly, leading to a downward pressure on prices due to weak demand [3] - Battery material prices, including cobalt and lithium, have also seen declines, reflecting a cautious outlook on future demand [3] Technology (TMT) - The semiconductor market has shown robust growth, with a 46.1% year-on-year increase in global sales, particularly in China [3] - However, consumer electronics, particularly smartphones, are experiencing a decline in shipments, with forecasts adjusted downward [3] Real Estate Chain - Steel prices have seen slight increases, while cement prices have decreased, indicating mixed signals in the construction materials sector [3] - The glass industry is facing high inventory levels, leading to stable prices despite ongoing losses [3] Consumer Sector - Pork prices have dropped significantly due to seasonal demand fluctuations, while liquor prices have shown slight recovery [3] - Agricultural products like corn and wheat have seen price increases, reflecting varying demand dynamics [3] Cyclical Industries - Commodity prices are fluctuating, with precious metals experiencing declines while industrial metals like aluminum have seen price increases due to supply concerns [3] - Oil prices have surged, reflecting geopolitical tensions and supply chain disruptions [3]

- The report introduces a quantitative timing model based on volume signals, referred to as the "Volume Timing Signal" model. The model evaluates market sentiment by analyzing the volume of major indices. As of March 6, 2026, the volume timing signals for all indices, including the Shanghai Composite Index, Shanghai 50, CSI 300, CSI 500, CSI 1000, ChiNext Index, and Beijing 50, indicate a cautious outlook[23][24] - The "HS300 Rising Stock Proportion Sentiment Indicator" is introduced to assess market sentiment by calculating the proportion of stocks in the CSI 300 index with positive returns over a specific period (N days). The formula is: $ \text{HS300 N-day Rising Stock Proportion} = \frac{\text{Number of CSI 300 stocks with positive returns over N days}}{\text{Total number of CSI 300 stocks}} $ This indicator is effective in capturing upward opportunities but has limitations in predicting market downturns. As of March 6, 2026, the indicator showed a slight increase, with the proportion of rising stocks exceeding 60%, indicating high market sentiment[24][25] - The "HS300 Rising Stock Proportion Timing Tracking" applies two different smoothing windows (N1=50 and N2=35) to the above sentiment indicator. When the short-term smoothed line (fast line) exceeds the long-term smoothed line (slow line), it signals a bullish market sentiment. As of March 6, 2026, both the fast and slow lines were rising, with the fast line above the slow line, suggesting a continued bullish outlook[26][28] - The "Moving Average Sentiment Indicator" is based on the eight-moving-average system, which uses the closing prices of the CSI 300 index and calculates moving averages with parameters 8, 13, 21, 34, 55, 89, 144, and 233. The indicator assigns values of -1, 0, or 1 based on the position of the current price relative to the moving averages. When the current price exceeds more than five of the moving averages, it signals a bullish sentiment. As of March 6, 2026, the CSI 300 index was in a non-prosperous sentiment zone[32][36] - The report also analyzes cross-sectional volatility and time-series volatility as indicators of short-term alpha opportunities. Cross-sectional volatility for CSI 300, CSI 500, and CSI 1000 index components increased week-over-week, indicating an improved short-term alpha environment. Over the past quarter, cross-sectional volatility for CSI 300 and CSI 1000 was in the upper-middle percentile of the past six months, while CSI 500 was in the middle percentile. Time-series volatility for the same indices also increased week-over-week, with CSI 1000 in the upper-middle percentile of the past six months, indicating a favorable alpha environment[37][38][41]

Report Industry Investment Rating - Not provided in the report Core Viewpoints - The post - holiday coal price rally was influenced by the Indonesian coal incident. However, as the market enters the traditional consumption off - season in March, the coal price support weakens, and the market pattern becomes looser, with coal prices likely to continue to decline. In the long - term, new energy will continue to replace thermal power, and coal demand will peak and decline during the 15th Five - Year Plan period. Policy will guide supply, and coal prices will operate between 600 - 850 yuan/ton in the long run [2]. Summary by Directory 1. Price - Coal prices have a slight correction. Both domestic and imported coal prices have increased. As of March 6, 2026, the price of Yulin 5800 kcal coal index rose by 4.0 yuan/ton week - on - week; the price of Ordos 5500 kcal coal index fell by 1.0 yuan/ton week - on - week; the price of Datong 5500 kcal coal index rose by 22.0 yuan/ton week - on - week. The price of Qinhuangdao Port 5500 coal was reported at 750.0 yuan/ton, up 6.0 yuan/ton week - on - week, and the price of Qinhuangdao Port 5000 coal was reported at 669.0 yuan/ton, up 3.0 yuan/ton week - on - week. The CCI import 4700 index rose by 1.7 dollars/ton week - on - week, and the CCI import 3800 index rose by 1.7 dollars/ton week - on - week [4][8]. 2. Supply 2.1 Domestic Production (Weekly) - Pit - mouth supply is increasing steadily. From February 26 to March 4, 2026, the capacity utilization rate of sample coal mines in the Three - West regions reached 83.51%, up 13.97 percentage points from the previous period. Factors affecting coal production capacity in 2026 include the exit of backward production capacity, the exit or conversion of uncompleted approved increased - capacity mines, and the disposal of increased - capacity mines that fail to fulfill coal contracts [14][16]. 2.2 Domestic Production (Monthly) - In 2025, the national raw coal production increased by 1.2% year - on - year. In December 2025, the national raw coal production was 43703 tons, a year - on - year decrease of 1.0% and a month - on - month increase of 2.40%. Shanxi, Inner Mongolia, and Shaanxi produced 339556 tons of raw coal in 2025, accounting for 70.28% of the national total, with a year - on - year increase of 1.49% [17][22]. 2.3 Seaborne Coal - The arrival volume of imported coal at ports decreased month - on - month [23]. 2.4 Import (Monthly) - In December 2025, the national coal import volume reached 5859.7 tons, a year - on - year increase of 11.94% and a month - on - month increase of 33.01%. In 2026, Indonesian coal exports have been weak due to policy interference, such as slow approval of mining plans and potential export tariff regulations [24][29]. 3. Inventory 3.1 Mine - The inventory at the origin increased month - on - month [31]. 3.2 Port - The inventory at northern ports has accumulated. As of March 6, the total inventory of northern ports (excluding Huanghua) was 2340.0 tons, a week - on - week increase of 108.0 tons [2][37]. 4. Transportation - The inflow and outflow of ports have increased [39]. 5. Demand 5.1 Power Demand - The daily coal consumption of coastal power plants has rebounded, and the inventory has been depleted. In the next 10 days (March 7 - 16), there will be more precipitation in some areas, and the average temperature in some areas will be lower than normal. In 2025, the growth rate of the whole - society electricity consumption was 5% [41][48][49]. 5.2 Power Production - In 2025, the thermal power generation decreased by 1% year - on - year. The precipitation in the southwest region is relatively low [52][54]. 5.3 Non - power Demand - The demand for building materials and metallurgy is weak, while the demand for chemical coal remains high. The blast furnace operating rate this week was 80.22% week - on - week, and the capacity utilization rate of cement clinker decreased by 6.19 percentage points to 35.29% week - on - week [60].

Market Overview - The Hang Seng Index decreased by 3.3% this week, while the Hang Seng Composite Index fell by 3.8%. Large-cap stocks outperformed small-cap and mid-cap stocks, with declines of 3.6%, 4.0%, and 4.6% respectively [1] - Major concept indices experienced declines, with the Hang Seng Consumer Index dropping by 4.8%. The free cash flow strategy showed resilience, increasing by 0.4% [1] - Among 30 sectors, 4 sectors saw gains while 26 sectors declined. The strongest performers were Oil & Petrochemicals (+5.1%), Coal (+2.6%), Construction (+2.6%), and Utilities (+0.5%). The weakest sectors included Computer (-7.8%), Retail (-7.4%), Electronics (-6.3%), and Steel (-6.0%) [1] Valuation Levels - The valuation of the Hang Seng Index decreased by 1.1% to 11.2x, while the Hang Seng Composite Index valuation fell by 2.1% to 11.2x. Most major concept indices saw a decline in valuation [2] - The Hang Seng High Dividend Index increased by 2.0% to 7.7x, while the Hang Seng Biotechnology Index decreased by 4.8% to 24.5x [2] - Valuations rose in 5 sectors and fell in 23 sectors. The largest increases were in Comprehensive Finance (+33.5%) and Oil & Petrochemicals (+3.3%), while the largest declines were in Retail (-8.5%) and Computers (-7.7%) [2] Earnings Expectations - The EPS for the Hang Seng Index decreased by 1.5% compared to last week, while the EPS for the Hang Seng Composite Index fell by 1.0% [3] - Most major concept indices saw downward revisions in EPS expectations, with the Hang Seng High Dividend Index experiencing a significant decrease of 2.2% [3] - Among 15 sectors, 12 sectors had downward revisions in EPS expectations, with Comprehensive Finance seeing the largest cut at -27.4%. In contrast, sectors like Construction (+4.9%) and Coal (+1.9%) had upward revisions [3]

Group 1 - The article highlights the significant surge in international oil prices due to escalating tensions in the Middle East, with Brent crude oil rising by 9.26% to $93.32, marking a weekly increase of 35%, the largest in history [1][7]. - The conflict between the US and Iran is expected to be prolonged, with the UN Secretary-General warning that the war "could spiral out of control" [2][5]. - Kuwait has announced a reduction in oil production due to the conflict, with the flow through the Strait of Hormuz plummeting by 94%, leading to concerns about supply disruptions and potential price increases [8][9]. Group 2 - The article discusses the renewed interest in "HALO strategies," focusing on sectors with heavy assets and low risk of technological obsolescence, such as energy, resources, and infrastructure [2][10]. - The oil and petrochemical sector has shown strong performance, with the industry index rising by 31.4% year-to-date, leading among major industry indices [12]. - Other sectors, including coal and non-ferrous metals, have also experienced significant gains, with indices rising around 20% year-to-date [12][16].

Core Viewpoint - Inner Mongolia is confident in its economic development, particularly in the energy sector, emphasizing the transition from fossil fuels to renewable energy and the growth of high-value industries such as biomanufacturing and computing power [1]. Group 1: Energy Sector - Inner Mongolia is a major coal-producing region, with a projected coal output of nearly 1.3 billion tons by 2025, maintaining its position as a top supplier in China [1]. - The region has provided 350 million tons of coal to 29 provinces during the 14th Five-Year Plan, ranking first in the country for coal supply [1]. - The development of renewable energy is significant, with Inner Mongolia's installed capacity for new energy exceeding fossil energy, reaching over 170 million kilowatts [3]. Group 2: Mineral Resources - Inner Mongolia holds over 83% of China's rare earth reserves, with low extraction costs due to the presence of rare earths as by-products of iron ore mining [2]. - The region's thorium resources are sufficient to support national usage for 20,000 years, marking a potential for future nuclear energy development [2]. Group 3: Computing Power Industry - Inner Mongolia is a key hub in China's "East Data West Computing" project, with its data centers benefiting from abundant and low-cost electricity, particularly from renewable sources [4]. - The green electricity ratio in Inner Mongolia's data centers exceeds 82%, and the region has the highest green computing power index in the country [4]. - The transition from coal and electricity sales to computing power sales represents a significant opportunity for economic growth in Inner Mongolia [4].

Group 1: Economic Confidence and Energy Development - Inner Mongolia has strong confidence in its economic development, particularly in the energy sector, with a focus on renewable energy and high-value-added industries like computing power [1] - The coal production in Inner Mongolia is projected to reach nearly 1.3 billion tons by 2025, maintaining its position as a leading coal producer in China [1] - During the 14th Five-Year Plan, Inner Mongolia supplied 3.5 billion tons of coal to 29 provinces, ranking first in the country [1] Group 2: Resource Utilization and Technological Advancements - The abundant coal resources in Inner Mongolia are driving the development of electricity and coal chemical industries, as well as upgrading equipment manufacturing [2] - Inner Mongolia holds over 83% of China's rare earth reserves, with low extraction costs due to the association with iron ore [2] - The region's wind energy accounts for 57% of the national total, and solar energy accounts for 21%, with renewable energy installations exceeding fossil fuel capacity at over 170 million kilowatts [3] Group 3: Computing Power and Data Centers - Inner Mongolia is a key hub for the national "East Data West Computing" project, with significant advancements in the computing power industry [3] - The region's electricity supply, particularly from renewable sources, is abundant, stable, and cost-effective, with green electricity accounting for over 82% of data center energy consumption [3] - Recent developments in large models in China highlight the importance of Inner Mongolia's computing power support, transitioning from coal and electricity sales to computing power [4]