Western: With energy security, modern coal chemical industry welcomes a big development. Outlook on companies in the industry benefiting first from this development.

Western released a research report stating that the current global energy landscape is undergoing deep adjustments, with a high dependence on foreign oil and natural gas in China. Ensuring energy and supply chain security is crucial, and the importance of modern coal chemical industry is highlighted. By 2025, oil usage in the chemical industry in China is expected to account for about 24%, while coal usage is expected to be around 8%. With limited overseas chemical production capacity and strict control over large-scale refining and chemical projects domestically, China's modern coal chemical technology and scale are globally leading, and it is expected to export to countries along the Belt and Road Initiative, achieving high-quality overseas expansion. Western is optimistic about the prospects of engineering companies specialized in coal chemical industry benefiting from the development of modern coal chemical industry. Key points from the report: - The importance of modern coal chemical industry is highlighted under the background of energy security. - Modern coal chemical industry, also known as new coal chemical industry or deep coal processing, has high technical content in processes and product technologies, focusing on clean conversion and high value-added products. During the "14th Five-Year Plan" period, there have been frequent supportive policies for coal chemical industry, especially in the Xinjiang region which has abundant coal reserves. There are still risks in China's energy security supply, and modern coal chemical industry can complement the petroleum chemical industry. China's modern coal chemical industry has maintained a leading position globally in terms of scale and technology, such as the third generation technology of methanol-to-olefins (DMTO-III) leading globally. - Xinjiang's modern coal chemical industry has prominent cost advantages, supported by resources, policies, and clustering. - With the concentration of project approvals, specialized engineering companies in coal chemical industry are expected to benefit. Risks include: delays in coal chemical project progress, coal price increases, carbon taxes, deviation in calculations, etc.