Founder: Coal industry booming, investment focusing on coal chemical industry and elasticity.

Founder released a research report stating that in 2026, coal prices will gradually increase, which in turn will drive up the prices of coal sector stocks. Overall, the current coal market is showing a tight balance between steady demand recovery and dual pressure from domestic and foreign supply. Considering the core factors of supply and demand, it is likely that coal prices will steadily rise in the future. Investment focus should be on coal chemical industry and resilience, as oil prices remain high due to geopolitical conflicts, coal prices are stable to weak, and the high-profit cycle of the coal chemical industry is expected to continue. Founder's main points are as follows: Review: External disturbances lead to increase in coal prices due to rising demand In 2025, coal experienced a cyclical bottoming out with a rebound, and in the second half of the year, "coal production cuts" led to a rise in coal prices. In 2026, external factors such as production limits in Indonesia and conflicts in the Middle East affected coal imports, while domestic industrial electricity demand increased, resulting in a gradual increase in coal prices, which in turn led to an increase in coal sector stock prices. Outlook: Supply remains tight, demand growth is expected On the demand side, as summer temperatures gradually rise, the pressure to ensure power supply continues to increase, pushing up coal consumption in the power sector. At the same time, the vitality of domestic manufacturing continued to recover, driving up industrial electricity consumption compared to the same period last year. On the supply side, there are multiple constraints in the industry, limiting supply increment. On one hand, international oil prices continue to remain high, raising the comprehensive costs of overseas coal mining, transportation, and customs clearance, leading to a simultaneous rise in import coal prices; on the other hand, recent stringent safety and environmental checks in the domestic coal industry have led to some mines suspending production for rectification, resulting in a decline in capacity utilization. Overall, the current coal market is characterized by a tight balance between steady demand recovery and dual pressure from domestic and foreign supply. Considering the core factors of supply and demand, it is likely that coal prices will steadily rise in the future. Investment strategy: Focus on the coal chemical industry and resilience As international oil prices rise, the coal chemical industry is experiencing historic profitability dividends. Due to the impact of conflicts in the Middle East, oil prices have risen significantly, leading to a simultaneous increase in prices of mainstream chemical products such as polyolefins, methanol, and ethylene glycol, with product-side profits released elastically with oil prices. In contrast, while coal prices have risen, the increase in oil prices is greater, making coal chemical raw material costs relatively more stable compared to petrochemicals. From a breakeven perspective, polyolefins produced from coal are 45-55 USD/barrel, methanol is 58 USD/barrel, and ethylene glycol is 58 USD/barrel, much lower than the current oil price, with the cost gap continuing to widen, demonstrating the significant profit advantage of coal-based production routes compared to oil-based routes. The profit elasticity brought by substitution effects is more prominent, and when oil reaches 100 USD/barrel, the profit of coal-based polyolefins can exceed 40%. In the short term, as oil prices fluctuate at high levels due to geopolitical conflicts, coal prices remain stable to weak, and the high-profit cycle of the coal chemical industry is expected to continue. Investment logic one: With the continuous evolution of the energy crisis, the growing demand for alternatives to coal, improvements in the supply and demand pattern of coal, companies with strong coal price flexibility are expected to benefit first. Recommended stocks to watch: Yankuang Energy Group, Guanghui Energy, Jinneng Holding Shanxi Coal Industry, Shanxi Coal International Energy Group. Investment logic two: In the case of high oil and gas prices, focus on investing in companies in the coal chemical industry, where the profits of their chemical divisions are expected to increase, thickening the company's performance. Recommended stocks to watch: Yankuang Energy Group, CHINA RISUN GP, Huaibei Mining Holdings, Guanghui Energy. Investment logic three: Growth-oriented companies are worth attention, Yankuang Energy Group is expected to achieve a target of 300 million tons of raw coal production in the future, still at some distance, with additional potassium salt, molybdenum mines; SHOUGANG RES is expected to obtain mining permits for the Lianshan mine in the future, further enriching its assets; Huaibei Mining Holdings has prospects for the resumption of production at the Xinhuchai coal mine, the completion and operation of the Taohutu coal mine and the Juneng Power Generation plant, recommended stocks to watch: Yankuang Energy Group, SHOUGANG RES, Huaibei Mining Holdings. Risk warning: Risks of safety production, significant fluctuations in coal prices, macroeconomic fluctuations, risks of new production capacity falling short of expectations.