Fangzheng Securities: Focusing on coal dividends and growth value, growing enterprises are worth paying attention to

The Zhitong Finance App learned that Fangzheng Securities released a research report saying that the current supply-side tightening in the coal industry has become an investment theme, and the situation where coal supply exceeds demand is expected to be reversed. As supply-side capacity tightening policies continue to be implemented in 2026, restrictions on imported coal can also be anticipated in the future. Investment logic 1: Growing companies are worth paying attention to. Investment logic 2: This time, coal prices establish the bottom of the policy and establish a profit base for coal companies. For targets with high dividend ratios, there is a lower limit guarantee for performance, and dividend rates are also guaranteed, and high-dividend companies are expected to receive higher valuations.

Fangzheng Securities's main views are as follows:

Review: The cycle bottomed out in stages, and the stock price followed the price of coal

Coal experienced a cyclical bottom in 2025. At the beginning of the year, coal prices continued the downward trend at the end of 2024. In particular, against the backdrop of a warm winter, high hydropower generation, slowing safety inspections, and trade wars, coal prices continued to decline. Some coal mines experienced a “volume for price” situation, and stock prices declined accordingly. In July, the Energy Administration issued a notice on the inspection of supercapacity production. The phenomenon of “volume for price” on the coal production side began to subside. At the same time, high temperatures continued in summer, and coal prices began to rise. Entering the winter storage period, thermal coal prices rose to a high point during the year, and stock prices also rose along with coal prices.

Outlook: Supply remains tight, demand growth can be expected

In the context of “anti-internal scrutiny,” future safety inspections are still being strengthened. In the context of the current policy, various regions may continue to step up inspections of approval and production safety, and major production areas such as Jinshan, Shaanxi, and Mongolia are implementing overproduction checks one after another to limit the release of coal production capacity. However, Indonesia, China's largest coal importer, has lowered its export target since '26, competition for imported coal has intensified, and overall supply growth has been limited. On the demand side, due to the influence of Document No. 163, the bank believes that the installation speed of photovoltaic wind power has been reduced, the replacement effect of green power is slowing down, and electricity demand for manufacturing and data centers is expected to be gradually released, leading to new demand for coal power. In terms of coking coal, domestic supply is still tight, and there may be an increase in Mongolian coal. Steel used in manufacturing has already surpassed construction steel, and the future pattern of steel supply and demand will be affected by the manufacturing sector to a greater extent.

Investment Strategy: Focus on dividends and growth value

The profits of coal companies are becoming more and more deterministic, and in the future, the market will gradually approve the logic of high dividends-increase valuation of coal. The production restriction policy was introduced on July 10, 2025, and the recent bottom of coal prices was in early June. The port price for thermal coal was 609 yuan/ton, and the port price for main coking coal was 1,230 yuan/ton. At this time, the policy introduced indicates that the policy's tolerance for the lower limit of coal prices has basically remained at this level in the current environment. Currently, interest rates remain low, which will further highlight the value of low-dividend investment. For asset management, insurance and other products with low risk preferences, investment in the coal sector may increase in the capital market.

Risk warning: production safety risk, risk of large fluctuations in coal prices, risk of macroeconomic fluctuations, risk of new production capacity falling short of expectations