Xiaomo: Raise Mainland thermal coal price forecast to RMB 830 per ton in 2026, short-term preference for Yankuang Energy (01171)

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that coal prices in mainland China have risen 14% since the third quarter, and coal stocks have risen 16% to 22% during the same period, and the market expects the coal price environment to be “higher and longer”; the bank believes that short-term coal prices are still at upward risk, mainly due to limited domestic supply and demand to replenish stocks, so the 2026 thermal coal price forecast was raised from RMB 805 to RMB 830 per ton.

The bank pointed out that after taking into account the higher unit cost, the bank adjusted the profit forecasts for China Shenhua (01088) and Yankuang Energy (01171) from 2026 to 2028, ranging from a 2% reduction to a 4% increase. In addition, the target price of China Shenhua (601088.SH) A shares was raised from RMB 45 to RMB 47, and the target price for H shares was raised from HK$44.5 to HK$46, maintaining the “neutral” rating; and the target price of Yankuang Energy (600188.SH) A shares was raised from RMB 20 to RMB 22, and the target price of H shares remained unchanged at HK$12.5, which also maintained a “neutral” rating.

The bank favors Yankuang Energy in the short term due to its high coking coal exposure and favorable contract portfolio; the bank believes that although the dividend ratio of 6% to 7% for coal stocks is attractive, the high dividend rate is not necessarily sustainable, and may be short-term due to supply restrictions.