HK Stock Market Move | Coal stocks continue to rise recently, and coal mid-term reports are expected to see significant increases both year-on-year and month-on-month. The ongoing safety supervision is driving a contraction in supply.

Coal stocks continue their recent upward trend. As of the time of writing, E-COMMODITIES (01733) is up 4.55%, trading at HKD 0.805; China Coal Energy (01898) is up 3.93%, trading at HKD 11.63; YANCOAL AUS (03668) is up 2.74%, trading at HKD 33.02; Yankuang Energy Group (01171) is up 1.41%, trading at HKD 12.94. In terms of news, over 20 coal-related listed companies have released their mid-year performance announcements, with 3 companies expected to turn a profit, 6 companies expecting a reduction in losses compared to last year, and 6 companies anticipating an increase in net profits year-on-year. Overall, nearly 70% of the sector is reporting positive results. China Great Wall noted that, in comparison to port coal prices, the average price for the first half of the year rose by about 90 yuan year-on-year, an increase of 13%; in the second quarter, it increased by approximately 100 yuan compared to the first quarter, up 14%; this suggests that the majority of coal companies' mid-year performance is likely to show substantial year-on-year and quarter-on-quarter growth, with the low point for annual and quarterly performance already past. The forecasts released by coal listed companies have shown significant year-on-year increases. Guotai Junan Securities highlighted that safety regulations for Shanxi coal mines have been tightening since the end of June. After the resumption of operations at the Xiqu Coal Mine on August 5, a safety incident occurred, further strengthening market expectations for ongoing stringent safety regulations, limited pace of coal mine resumption, and a slowdown in production release. As the market deepens its understanding of the sustainability of the current safety regulations and their supply impact, the coal supply-demand pattern is expected to continue improving.