Shenwan Hongyuan Group: Bullish on the rebound of coal prices in the peak season, long-term investment value deserves special attention

Shenwan Hongyuan Group released a research report stating that the market generally has a long-term bearish view on the development prospects of traditional fossil energy, but believes that the transformation of energy structure is a long and complex systemic project. Coal, as the "ballast stone" for ensuring supply, cannot be replaced in the short term. The rigid demand will continue to strengthen the industry's fundamentals. Against this background, the attributes of the coal sector as a "cash cow" are becoming more stable, and the reasonable high operation of coal prices is expected to further drive industry profitability and dividend-paying ability to exceed expectations, with long-term investment value warranting particular attention. Shenwan Hongyuan Group's main points are as follows: Supply side The coal industry supply side is facing a deep-seated reshaping of the structure. In December 2025, six state departments issued the "Key Benchmark Levels and Baseline Levels for Clean and Efficient Utilization of Coal (2025 Edition)", bringing coal consumption for coal-fired power generation and heating, coal-to-gas projects under control, coupled with stricter supervision in safety and environmental protection, the supply order is further transitioning towards rationalization and high-quality transformation. With stringent approval for capacity replacement and new capacity in major production areas, the industry's capacity release is expected to continue to be stable yet tight, with the dominance of high-quality and compliant capacity increasing. The wave of de-globalization is driving the continuous awakening of resource nationalism, highlighting coal as a key strategic energy source that safeguards national energy security. Since December 2025, Indonesia has explicitly reduced its coal production target for 2026, reinstated 1%-5% coal export tariffs, and tightened foreign exchange controls, consolidating its control over resources through production and tax adjustments. Demand side In December 2025, the rigid growth foundation of electricity consumption for the whole society remains unchanged, with resilient coal electricity demand. The coal chemical sector is experiencing new growth momentum, with projects such as coal-to-oil and coal-to-olefin accelerating, and with a 7% year-on-year growth in coal consumption in the chemical industry in December, continuing the high-growth momentum and becoming the core driving force for demand growth. Overall, coal demand in 2026 is expected to remain stable with a slight increase. Investment analysis opinion It is optimistic about the continuous rebound of thermal coal prices and recommends focusing on growth targets such as TBEA Co., Ltd., Jinneng Holding Shanxi Coal Industry, Shanxi Huayang Group New Energy, China Coal Xinji Energy, Huaihe Energy, Yankuang Energy Group; recommends stable operating high dividend high dividend targets such as China Shenhua Energy, Shaanxi Coal Industry, China Coal Energy, and Inner Mongolia ERDOS Resources; recommends flexible coking coal targets such as Shanxi Coking Coal Energy Group, Huaibei Mining Holdings, Shanxi Lu'an Environmental Energy Development Co., Ltd. Risk warning: New energy supply increment exceeding expectations, energy storage technology development higher than expected; macroeconomic downturn exceeding expectations, coal demand lower than expected; significant international coal demand decline, international coal prices falling more than expected.