HK Stock Market Move | Coal stocks continue to rebound in the near term, coal prices are resilient, and the sector's performance may continue to show a year-on-year improvement trend.

Coal stocks continued their recent rebound, as of the time of writing, SOUTHGOBI (01878) rose by 12.32% to HK$2.37; MONGOL MINING (00975) rose by 7.38% to HK$8; Yancoal Australia (03668) rose by 2.58% to HK$29.8; China Coal Energy (01898) rose by 1.66% to HK$8.57. China Great Wall pointed out that this week, the price of thermal coal continued to rise, mainly due to the continuous backlog of coal shipments at ports, leading to a structural coal shortage at ports, coupled with high temperatures in the southern region supporting coal demand for electricity, with terminal inventories lower than the same period last year. On the other hand, the increase in non-electric demand has brought marginal improvements to coal demand, combined with the weakening of hydropower output in the third quarter, we expect coal prices to be relatively strong. Guotai Junan believes that looking back at 2024, the coal industry experienced the most intense mid-term pressure in both the off-season and peak season, and in the extreme supply and demand background, overall coal prices still showed strong resilience; currently, daily consumption remains at historically high levels, under better-than-expected fundamentals, the sector may be approaching a turning point. The bank points out that sector performance is expected to continue to show a year-on-year improvement trend, and the sector's dividend yield still averages over 6% after adjusting for interim performance, making the sector attractive for dividends once again.