Bank of America Securities: Downgrades China Shenhua Energy (01088) and Yankuang Energy Group (01171) ratings, prefers PETROCHINA (00857)

Bank of America Securities released a research report recommending investors to choose defensive state-owned enterprises. The bank is optimistic about PETROCHINA (00857) due to its strong cash flow, maintaining a "buy" rating while lowering the target price by 3% to 7.8 Hong Kong dollars. The report stated that this year, the coal industry and China Shenhua Energy (01088) are bearish, as coal demand is expected to have limited growth, with inventory at historical highs and facing continued import threats. The bank expects the price of thermal coal this year to be 720 yuan per ton (a 16% decrease compared to the previous year), with spot prices expected to be lower than contract prices in the second to third quarters, while the price of coking coal is 1,400 yuan per ton. Bank of America Securities downgraded Shenhua's rating from "buy" to "neutral" with a 23% decrease in target price to 34 Hong Kong dollars, and also downgraded Yankuang Energy Group's rating from "buy" to "underperform the market" with a 38% decrease in target price to 8 Hong Kong dollars. The bank maintains a "neutral" rating for China Coal Energy (01898) with a 9% decrease in target price to 9.7 Hong Kong dollars.