HK Stock Market Move | Coal stocks strengthened in the afternoon, with SOUTHGOBI (01878) soaring 26% and China Shenhua Energy (01088) rising over 6%.

Coal stocks strengthened in the afternoon, as of press time, SOUTHGOBI (01878) rose 26.2% to HK$3.42; China Shenhua Energy (01088) rose 6.32% to HK$33.65; CHINA QINFA (00866) rose 3.85% to HK$1.35; China Coal Energy (01898) rose 3.45% to HK$9.3. On the news front, SOUTHGOBI's performance in the third quarter led the coal stocks. SOUTHGOBI announced its performance for the first three quarters ending in September this year, with revenue of US$319 million, an increase of 31.2% year-on-year. Net profit was US$20.6 million, a turnaround from a loss of US$23.428 million in the same period last year, with earnings per share of 6.8 cents. In addition, a Citigroup research report stated that Shenhua's net income in the third quarter reached RMB 17.8 billion, a year-on-year increase of 14%, and a quarterly increase of 19%, exceeding market expectations. CITIC SEC released a research report stating that the price of power coal fluctuated slightly in the third quarter of 2024, and the quarterly long-term contract price of coking coal was lowered in September. Against the backdrop of weak and stable coal prices, the performance of coal companies has differentiated, but some heavyweight companies have exceeded expectations, driving an improvement in overall performance in the third quarter sector-on-quarter. Looking forward to the middle and late stages of the fourth quarter, it is expected that coal prices will mainly remain stable due to seasonal factors and policy expectations, coupled with policy factors that may further drive dividend styles, and the sector may enter a new round of rebound in the short term. Open source securities believe that both thermal coal and coking coal prices are currently at low levels, and with the continuous improvement of supply and demand fundamentals, both types of coal will still have upward elasticity, and there is still significant room for price increases.