Founder: Global energy supply under significant pressure, ongoing conflicts driving up coal prices.

Founder released a research report stating that the escalation of the US-Iran conflict has led to the blockade of the Strait of Hormuz, pushing international oil prices to around $100 per barrel, significantly putting pressure on global energy supply. With current oil and gas storage in the Middle East nearing capacity limits, oil-producing countries may be forced to shut down oil and gas fields, posing a long-term risk of an energy crisis. If the conflict continues, the severity of the energy crisis will continue to increase, leading to a potential resurgence of coal-fired power generation in Europe and other regions, driving up coal prices, and possibly repeating the scenario of 2022. The main points of the Founder are as follows: The energy crisis in 2022 will drive up coal prices At the beginning of 2022, the Russia-Ukraine conflict broke out, causing Brent crude oil prices to rise by 39.6%, with natural gas prices increasing by 150% year-on-year, leading to a rapid increase in coal prices. The price of Newcastle thermal coal rose to $453 per ton at one point, a year-on-year increase of +123% in 2022, despite the high base of coal shortage in 2021. However, the report found that global coal production reached 8.85 billion tons in 2022, an increase of 8.0% year-on-year; global coal demand, on the other hand, decreased synchronously by 5.4%, with coal consumption in Europe decreasing by 10.6% year-on-year, showing no significant increase. Coal prices are bought, not used Against the background of no significant increase in coal consumption in Europe, coal prices have been rising rapidly. By February 2022, coal inventories at the three ports in Europe's ARA region had fallen to historic lows of less than 4 million tons, but after the Russia-Ukraine conflict, port inventories rebounded rapidly to over 7 million tons. Since about 45% of the European Union's coal imports depend on Russia, cutting off the coal channels from Russia after the conflict, the gap can only be filled by seeking alternative sources globally. In 2022, the EU imported 116.5 million tons of seaborne coal, a significant increase of 33.9% year-on-year, bringing a tight supply-demand situation in Europe, and resulting in a sharp rise in international coal prices. Coal prices are expected to rise again in an energy crisis By early 2026, coal inventories at the three ports in Europe's ARA region had reached low levels. If there is another energy crisis, coal prices are likely to follow the trend of 2022. During the crisis in 2022, coal prices rose first, but fell when they reached $396 per ton. The report believes that as coal prices rose to high levels, the crisis sentiment weakened, but as time went on, energy shortages in European countries began to appear, leading to Europe scrambling for coal and causing coal prices to rise again and remain high. By 2026, coal inventories in Europe were also at low levels. Once the crisis takes shape and energy shortages begin, coal prices are expected to remain high, just like in 2022. Investment recommendations Investment logic one: With the continuous evolution of the energy crisis, the growing demand for coal substitutes, improvement in the supply-demand situation for coal, and companies with strong coal price elasticity are expected to benefit. Recommended to focus on: Yankuang Energy Group, Jinneng Holding Shanxi Coal Industry, Shanxi Coal International Energy Group. Investment logic two: The long-term energy crisis will lead to an improvement in coal industry performance, thereby driving up dividend yields. Recommended to focus on high dividend yield expectations: Yankuang Energy Group, Shaanxi Coal Industry, Shanxi Coal International Energy Group, Beijing Haohua Energy Resource, Shan Xi Hua Yang Group New Energy. Risk warning: Risks of safety production, changes in international situations, risks of macroeconomic fluctuations, risks of substantial fluctuations in commodity prices, risks of project construction progress falling short of expectations, risks of policy support falling short of expectations, risks of intensified market competition.