Bank of China International: Maintains a "hold" rating on Yankuang Energy Group (01171), expects the acquisition of a subsidiary to slightly increase profits.

China International Capital Corporation Limited released a research report stating that Yankuang Energy Group (01171), a subsidiary holding 62.3% of shares in YANCOAL AUS (03668), has agreed to acquire 80% equity of Red Hawk Coal Mine. The initial payment is 1.85 billion US dollars, plus a contingent consideration of up to 550 million US dollars within five years. The transaction is still subject to a series of approvals and is expected to be completed by the end of the third quarter of 2026. The bank maintains a "hold" rating on Yankuang Energy Group's H shares. The bank stated that Red Hawk Coal Mine is the largest underground coking coal mine in Australia, with an estimated coal production of 5.9 million tons in 2025. As of September 1, 2025, the mine has 164 million tons of saleable coal reserves and 406 million tons of coal resources, equivalent to a 25-year mining life. China International Capital Corporation Limited points out that based on data from 2025, this transaction will increase Yankuang Energy Group's attributable coal production and coal reserves by 2.6% and 1.4% respectively. Assuming a bank loan of 1.4 billion US dollars with an annual interest rate of 6% for the transaction, it is estimated that the transaction will increase profits by about 4% in 2027.