Morgan Stanley: Rating of China Coal Energy (01898) upgraded to "hold", anticipating a slight increase in domestic coal prices this year.

Morgan Stanley released a research report stating that China Coal Energy (01898) has shown better resilience in profit performance than expected, benefiting from cost control and the recovery of the coal chemical business. The bank expects that with the support of anticipated overseas supply disruptions and rising import prices, mainland coal prices will slightly increase in 2026 compared to 2025. The bank believes that the tension in the Middle East has also led to high oil prices, causing an increase in chemical product prices, which is beneficial for the profitability contribution of its coal chemical business. After taking into account actual performance, the bank has lowered its earnings per share forecast for China Coal Energy for the next two years by 3% and 2%, maintaining a "hold" rating and raising the target price from HK$17.5 to HK$17.7.