CITIC Securities: Escalation of Middle East geopolitical conflicts may help boost valuation of the coal sector.

According to the research report of CITIC Securities, the escalation of the Middle East geopolitical conflict may lead to an increase in oil prices, which could effectively push up coal prices. At the same time, if the trade and logistics of chemical products such as methanol are affected, domestic coal-to-chemical demand is also expected to increase, which will be favorable for coal prices. Currently, with the addition of export disruptions caused by Indonesia's reduction in coal production, domestic coal prices are expected to continue to improve. It is recommended to invest in undervalued companies with coal-to-chemical businesses and companies with a relatively high proportion of chemical coal sales, while also paying attention to companies with coal resources in Indonesia.