Yamato: Maintaining China Shenhua Energy (01088) "outperform the market" rating Three-Year Shareholder Return Program is a positive signal.

Daiwa has released a research report stating that they are maintaining a "outperform the market" rating for China Shenhua Energy (01088). The company announced yesterday that they will increase their annual dividend commitment to no less than 65% of net profit for the years 2025-2027 as part of their shareholder return plan. Daiwa believes that even though China Shenhua Energy's dividend payout ratio has been maintained at 60-100% between 2019 and 2023, the current announcement of 65% is somewhat underwhelming. However, the bank sees the mid-term dividend as a positive surprise that was not widely expected by investors. The report states that despite a 8.8% year-on-year drop in coal prices for China Shenhua Energy in 2025, Daiwa expects the stock price to react positively to this event. Furthermore, the next catalyst for the company will be the disclosure of their 2024 dividend at the end of March 2025, with Daiwa predicting a dividend of 2.2 RMB. Nevertheless, Daiwa believes that a sharp drop in coal prices could potentially impact Shenhua's stock price after the March catalyst mentioned above.