The Zhitong Finance app learned that Morgan Stanley released a research report stating that the target price for Yankuang Energy (01171) is HK$13.6, and the rating is “reduced”. The bank believes that compared with China Shenhua (01088)'s net profit for the first nine months, which fell 16% year on year, and China Coal Energy (01898), which fell 14%, Yankuang's net profit declined the most. In addition to a 30% drop in overseas coal prices, Yankuang recorded a 20% to 30% drop in the average coal sales price in all regions of mainland Yankuang. Compared to Yankuang, the bank favors its subsidiary Yancoal Australia (03668).

The bank said that Yankuang Energy's performance in the first three quarters fell short of expectations. According to Chinese accounting standards, net profit fell 46.8% year on year to 15.525 billion yuan. Excluding one-time projects, core net profit for the period fell 46.9% year on year to 14.249 billion yuan. In the third quarter alone, the company's net profit increased 17% quarterly to 4.5 billion yuan, lower than the bank's forecast of 4.9 billion yuan. Since the company's net profit for the first nine months only accounted for 67% and 75% of the bank's and market's full-year forecasts in accordance with International Financial Reporting Standards (IFRS), the quarterly results did not meet expectations.