February 23rd coal stocks continued to rise, Yanzhou Mining Energy rose 4.57%, Shaanxi Coal Industry, Huaibei Mining, Meiteng Technology, Haohua Energy, China Coal Energy, Orchid Kechuang, Electric Investment Energy rose.
Coal ETF rose more than 7 per cent this week, while energy ETF and energy ETF funds rose more than 5 per cent this week.
Yesterday, Inner Mongolia Alashan League Alashan Zuoqi Xinjing Coal Industry Co., Ltd., an open-pit coal mine collapsed in a large area, about 400m in length, with workers and vehicles buried. At present, there are 11 rescue teams at the scene, about 470 people and more than 130 large rescue machinery. However, the amount of landslides is huge, the rescue is very difficult, and the surrounding reinforcements are still rushing to the scene.
At present, all the local coal mines have stopped production and carried out safety hidden trouble investigation. The market is generally worried that the comprehensive safety inspection in the main producing areas will affect coal production, which may stimulate power plants and other main bodies to hoard coal, and increase the tension between coal supply and demand.
Affected by the news, coal prices rose, hitting a recent high. It is speculated that due to the shortage of coal supply and the easy expansion of production capacity, the open-pit coal mine acts as the main force of capacity expansion and supply protection, and the sudden increase in mining work results in great disturbance in the coalfield, instability of the working face, and the failure of safety monitoring to keep up in time, leading to this major safety accident.
From the perspective of coal prices, with the acceleration of the resumption of production downstream, coal prices first suppressed and then rose, and then rebounded after falling to 980 yuan / ton on February 13. as of February 17, the price of coal in Beigang closed at 1026 yuan / ton.
In terms of price, the upside down of domestic and foreign coal prices and the compression of Xinjiang coal transportation profits will cause certain restrictions on the supply.In addition, the inflection point of inventory in power plants and ports has emerged, non-electricity demand has started as scheduled, and coal prices may open the upstream channel.
In terms of stocks, the coal sector has been adjusted for five months since September 2022 and has been systematically underallocated by institutions.In the fourth quarter of 2022, active funds accounted for only 0.99% of the positions in the coal sector, down 0.52% from the third quarter.At present, the PE level of coal enterprises has generally dropped to 4% 6 times, and the dividend yield of some companies has been as high as 10% +.
Cinda Securities said that it is currently in the early stage of a new upward cycle of the coal economy, fundamentals, policy resonance, the allocation of coal plate at this stage is timely. At present, the demand for coal downstream has accelerated recovery, the daily consumption of power plants has been rising, the daily consumption of thermal coal in eight coastal provinces has been higher than the level of the same period in previous years, the operating rate of non-thermal coal downstream has also increased steadily, and coal prices are expected to stabilize and rise. The coal sector is expected to usher in a round of performance and valuation of both the historic market.
Chuancai Securities pointed out that it pays attention to the rebound opportunities in the second half of the year after the coal price goes down. The recovery of coal demand in the first half of the year is likely to be less than expected. Under the resonance of multiple factors at home and abroad, the coal price center is expected to move down. With the accumulation of momentum of China's economic recovery in the second half of the year, the current performance of the superimposed overseas economy is continuing to improve. After entering the third quarter, coal demand is expected to enter the peak season again, and coal prices will rebound in the second half of the year. In the performance of the past few years, it can be seen that the persistence of coal enterprises is much higher than expected, with a higher price-to-performance ratio.
Guosheng Securities believes that the current coal price is the bottom area of the year, followed by the gradual improvement in non-electricity demand, coal prices are expected to open an upward channel. At the same time, with the easing of market pessimism and expectations, the coal sector is also expected to hit bottom and rebound, firmly optimistic and actively added. Under the background of the dual-track operation of the coal market, the stability and sustainability of high profits of coal enterprises are far higher than expected, and the performance-to-price ratio of the plate is prominent.
CITIC predicts that the supply and demand of the coal industry will remain in balance in 2023, and coal prices will remain high throughout the year. Considering production growth and cost control, the performance of most leading companies may remain stable in 2023. In terms of rhythm, it is expected that the industry boom may be repeated in the first half of the year, but coal prices may enter a continuously rising channel driven by seasonal factors and economic recovery in the second half of the year. If the subsequent stable growth policy is gradually increased, coal prices are still likely to exceed expectations, or bring a continuous catalyst for the industry to improve expectations for the whole year.
In addition, the industry mood improved, the plate entered a rebound phase. The overall valuation of PPPM E of the plate is at a historical low, with the expected dividend yield, the sector has obvious value attractiveness, and in the short term, with the decline of the overall market risk appetite, the plate has the basis to rebound; in addition, the level of institutional allocation of the plate has decreased significantly, and the upward resistance is small. Follow-up if domestic stable growth, liquidity or real estate policies and other loose expectations are further superimposed, the plate rebound can be sustained. Under the current market expectation, the price of coking coal is expected to be better than that of thermal coal.