Hong Kong Stock Concept Tracking | The price of thermal coal continues to rise; institutions suggest paying attention to supply contraction and low inventory levels (with related stocks)

Recently, coal prices have shown a trend of accelerated increase. According to data from the Business Society, on September 9, the benchmark price of thermal coal reached 972.75 yuan/ton, up 11.11% from 875.50 yuan/ton at the beginning of the month. On September 4, the closing price of Qinhuangdao Q5500 thermal coal broke through the key level of 950 yuan/ton. In the secondary market, on September 9, the coal sector rose; by the end of the trading day, KINETIC DEV (01277) was up 4.67%, closing at 2.13 HKD; Yankuang Energy Group (01171) was up 2.76%, closing at 13.79 HKD; China Shenhua Energy (01088) was up 2.72%, closing at 46.86 HKD; and China Coal Energy (01898) was up 1.40%, closing at 11.57 HKD. Due to multiple supply shocks, coal prices continue to rise. On the domestic supply side, coal mine production is slow under strict safety supervision, and the cycle for new capacity takes 3-5 years, with the medium to long-term capacity utilization rate having reached its peak. The accelerated exit of overproduced capacity is shrinking supply, and low railway shipments are leading to rapid inventory reductions at ports. From January to July 2026, national raw coal production decreased by 3.2% year-on-year, with June and July seeing declines of 9.5% and 9.9%, respectively. The operating rate of 442 coal mines in Shanxi, Shaanxi, and Inner Mongolia has decreased to 78.18%, with the operating rate in Shanxi province being only 62.87%, marking a low point for the same period in recent years. On the import side, disruptions in river transport in Indonesia and tight RKAB quotas have kept the supply of imported coal tight. El Nio is exacerbating drought conditions in IndonesiaJuly was the driest month in Indonesia since 1991, with coal production decreasing by 4.2% year-on-year in the first half of the year and exports down 3.2%. Additionally, the implementation of a single export channel policy starting in September has intensified supply disruptions. Regarding the coal industry's performance, according to Wind data, the coal industry achieved a revenue of 1,359.8 billion yuan in the first half of 2026, a year-on-year increase of 9.3%; total profit reached 210.7 billion yuan, a year-on-year increase of 41.1%. Quarterly profits further increased, with revenue in the second quarter reaching 722.1 billion yuan, a quarter-on-quarter growth of 13.2%; total profit for the second quarter was 125 billion yuan, a quarter-on-quarter growth of 45.9%. From the perspective of specific stocks, according to Wind data, Guizhou Panjiang Refined Coal's net profit in the first half increased by 575.55% year-on-year, Anhui Hengyuan Coal Industry and Electricity Power increased by 227.41%, Gansu Energy Chemical increased by 182.94%, and Shanxi Lanhua Sci-Tech Venture increased by 103.87%. Among leading companies, China Shenhua Energy saw a year-on-year revenue increase of 7.93% and a net profit increase of 5.22%; Shaanxi Coal Industry's net profit increased by 38.37% year-on-year; and Yankuang Energy Group's net profit surged by 33.97%. Guotai Haitong released a research report stating that multiple supply shocks are contributing to the ongoing rise in coal prices, leading to a comprehensive recovery in profitability in the coal sector. Among the sub-sectors, the profitability improvement for thermal coal companies in the first half exceeded that of coking coal companies. Against the backdrop of a noticeable decline in domestic production, import demand has significantly increased, and it is anticipated that imports will rise in the second half of the year, playing a supplementary role amid domestic declines. The firm believes that the coal sector's bottom was established in 2025, and that in 2026, supply-demand dynamics will tighten under domestic and international disturbances, significantly boosting the price center of coal, with marked improvements in fundamentals. China Galaxy Securities has indicated that overall, since the beginning of this year, coal prices have been on the rise due to factors like tightened exports from Indonesia and conflicts in the Middle East. Coal companies have benefitted from rising coal prices, achieving high growth in overall net profit attributable to the parent, profitability, and cash flow. Semi-annual report data showed that in the first half of 2026, the Shenwan coal industry achieved a total operating revenue of 668.2 billion yuan, a year-on-year increase of 15.6%; the net profit attributable to shareholders reached 68.9 billion yuan, a year-on-year increase of 28.6%. It is suggested to focus on stocks with high spot market proportions, low-cost advantages, and potential for capacity growth, as well as leading companies with resource reserves, cost advantages, and high dividend commitments. Sinolink recently released a research report arguing that while import volumes in the first seven months have increased year-on-year, they are insufficient to offset the domestic gap and have limited buffering effects. On the demand side, there is a coexistence of overall electricity growth, volatility in thermal power, and weak non-electric demand. Currently, low production and low inventory in mines, along with peak daily consumption by power plants subsiding but remaining at high levels, have exacerbated supply tightness at production sites and led to strong pricing at the pit, resulting in rapid inventory clearance at ports. Considering that power plant inventories are significantly lower than last year, the intensity of winter stockpiling may be strong, which is expected to drive coal prices up rapidly. Related stocks China Shenhua Energy (01088): China Shenhua Energy (01088) released interim results for the six months ended June 30, 2026, reporting revenue of 189.338 billion yuan, an increase of 7.9% year-on-year; profit attributable to owners of the company was 31.054 billion yuan, a year-on-year increase of 1.9%; earnings per share were 1.448 yuan; and an interim dividend of 0.98 yuan per share was declared. The announcement also noted that the group owns high-quality coal resources at the Shen Dong, Zhungeer, and Zhuandong mining areas, among others. As of June 30, 2026, the group had coal reserves of 10.108 billion tons and recoverable coal reserves of 3.577 billion tons according to Chinese standards. Yankuang Energy Group (01171): Yankuang Energy Group (01171) released interim results for the six months ended June 30, 2026, reporting sales revenue of 70.231 billion yuan, an increase of 15.4% year-on-year; net profit attributable to shareholders was 7.875 billion yuan, a year-on-year increase of 57.2%; earnings per share were 0.78 yuan. For the first half of 2026, the group spent 13.1529 million yuan on coal exploration, primarily for certain new mining exploration projects; capital expenditure related to coal development and mining was 3.790 billion yuan, mainly for fixed asset investments in existing mines, including the development and mining costs for the Wucaiwan No. 4 open-pit mine, Youfanghao coal mine, Yangjiaping coal mine, and the coal mines owned by Yancoal Australia and Yancoal International. China Coal Energy (01898): China Coal Energy (01898) released results for the six months ended June 30, 2026, reporting revenue of 73.136 billion yuan, a year-on-year decrease of 1.8%; profit attributable to shareholders was 8.192 billion yuan, a year-on-year increase of 11.8%; basic earnings per share were 0.62 yuan; an interim dividend of 0.184 yuan per share was proposed. CHINA QINFA (00866): The company released interim results for the six months ended June 30, 2026, reporting revenue of 1.179 billion yuan, a year-on-year increase of 8.23%; profit attributable to owners was 227 million yuan, recovering from a loss of 126 million yuan in the same period last year; basic earnings per share were 0.0867 yuan. The increase in profit attributable to owners was due to a rise in the average selling price of thermal coal and a change in provisions that resulted in a gain of 165 million yuan (compared to none in 2025).