HK Stock Market Move | China Shenhua Energy (01088) fell nearly 3% in the afternoon. Goldman Sachs downgraded the company's A shares to a sell rating, while Bank of America Merrill Lynch is pessimistic about the coal industry this year.

China Shenhua Energy (01088) fell nearly 3% in the afternoon, down 2.23% to HK$30.75 as of the time of publication, with a turnover of 7.4 billion Hong Kong dollars. On the news front, Goldman Sachs downgraded China Shenhua Energy A shares to "sell" with a target price of 33 RMB. In addition, Bank of America Securities released a research report stating that they are bearish on the coal industry and China Shenhua Energy this year due to limited growth in coal demand, high inventory levels, and continued threats from imports. The bank expects the price of thermal coal to be 720 RMB per ton (down 16% year-on-year), with spot prices expected to be lower than contract prices in the second and third quarters, and coking coal prices at 1400 RMB per ton. Cinda believes that with the background of the energy production capacity cycle, whether it is raw materials such as oil, electricity, steel, or costs such as labor and taxes, in addition to the relatively simple conditions for developing mines becoming less, the growth trend in coal mining costs both domestically and internationally is difficult to fundamentally reverse, making it difficult to sustain a significant reduction in costs. In addition, against the backdrop of a significant increase in the cost of coal mine rights transfer, it is necessary to further raise the central price of coal, improve the profit expectations of coal enterprises, enhance capital expenditure willingness, and promote the enthusiasm for coal mine construction investment. Coal is still on the road to revaluation, or a leap into the abyss.