Morgan Stanley: China Shenhua Energy (01088) maintains full-year production guidance of 513 million tonnes, maintains "Overweight" rating.

Morgan Stanley released a research report stating that China Shenhua Energy (01088) management said at a meeting that production in the first half of 2026 was relatively low, and the full-year production guidance remains unchanged at 513 million tonnes; the bank maintains China Shenhua Energy's "Overweight" rating and a target price of HK$48.3. The report noted that the company's lower production in the first half was mainly due to slow progress in land acquisition in Inner Mongolia, rainy weather affecting coal mine stripping volumes, and changes in mining faces; management believes that ongoing safety inspections have no impact on production. The bank pointed out that the National Development and Reform Commission earlier said it would arrange to increase coal shipments out of Xinjiang, but management believes the short-term impact will be limited, due to limited transport capacity and high railway costs. The transport cost for each tonne of coal from Xinjiang to eastern coastal ports is about RMB 600 per tonne. Unless coal prices remain above RMB 860 per tonne, the volume that can be shipped out will not be much.