The Zhitong Finance App learned that Guojin Securities released a research report saying that the current trend of coal production is gradually developing “steadily”. The policy emphasizes safe production in mines, the safety supervision situation is getting stricter, and expectations of a contraction in coal supply are increasing. In the thermal coal sector, the company's performance is stable, Changxie Coal accounts for a relatively high share, and attaches importance to dividend returns. Combined market value management assessments are expected to drive the valuation repair of central state-owned enterprises. The economy continues to improve, and computing power is rising. Demand for electricity is strong, and there are still opportunities for thermal power. Focus on companies that are highly elastic under the boost in demand. In the coking coal sector, demand for steel is resilient enough. There is a gap between supply and demand in anticipation of tightening coking coal supply. Combined with low bifocal inventories, there is some room to make up stocks. Focus on companies with steady performance and continued high dividends.

Recommended attention: Central state-owned enterprises: China Shenhua (601088.SH), Shaanxi Coal (601225.SH), China Coal Energy (601898.SH); thermal power: Yankuang Energy (), Guanghui Energy (USD); coking coal: Lu'an Huanneng (Sichuan), Shanxi Coking Coal (000983.SZ), and Jizhong Energy (000937.SZ). 600188.SH 600256.SH 601699.SH

The main views of Guojin Securities are as follows:

Raw coal production cut+import slowdown, supply performance shrinks

1) Raw coal: Domestic coal continues to decline, and the growth rate of imported coal is slowing down. Industrial raw coal production in March was 399 million tons, -4.2% year-on-year; in January-March, industrial raw coal production was 1,106 million tons, cumulative year-on-year ratio.

In March, 41.38 million tons of raw coal were imported, +0.5% year-on-year; in January-March, 115.9 million tons of raw coal were imported, with a cumulative total of +13.9% year-on-year. In January-March, raw coal production was -47 million tons year on year, and imports were +014 million tons year on year. The total raw coal supply was -33 million tons year on year. The overall supply performance contracted.

2) Thermal coal: In March, 31.172 million tons of thermal coal were imported, +4.55% year-on-year; in January-March, 86 million tons of thermal coal were imported, with a cumulative total of +15.82% year-on-year. Thermal coal imports are dominated by Indonesia, and Australian thermal coal contributed the main increase. In January-March, the cumulative import of Indonesian thermal coal was 55,54.45 million tons, -0.34% year-on-year; the cumulative import of Australian thermal coal was 14.1932 million tons, +587.51% over the same period last year.

3) Coking coal: In March, Shanxi produced 94 million tons of raw coal, or -21.0% year on year. Raw coal production in Shanxi dropped significantly, leading to an expected decrease in coking coal production. In March, 9.03 million tons of coking coal were imported, -5.2% year-on-year; in January-March, 26.89 million tons of coking coal were imported, with a cumulative total of +18.96% year-on-year. Coking coal imports are dominated by Mongolia and Russia. As of April 12, the volume of Mongolian coal cleared at Ganqimaodu Port reached 10.868,600 tons, +18.7% over the same period last year.

Low thermal power season+steel production control, demand needs to be initiated

1) Electricity: As the economy continues to recover, the country's power generation capacity continued to grow year on year. In March, the country's regulated industrial power generation capacity was 747.7 billion kilowatt-hours, +2.8% year-on-year; in January-March, the country's regulated industrial power generation was 2,237.1 billion kilowatt-hours, a cumulative year-on-year increase of +6.7%. Thermal power output has declined, and power generation is basically the same as in the same period last year. In March, the country's thermal power generation capacity was 5201 billion kilowatt-hours, +0.5% year-on-year; in January-March, the cumulative thermal power generation capacity was 1,602.8 billion kilowatt-hours, a cumulative year-on-year increase of +6.6%. Wind and solar power generation output has increased markedly due to factors such as the expansion of installed capacity and seasonality. At the same time, hydropower output is expected to be limited in April. Demand for thermal power is expected to decline appropriately before the peak of summer electricity consumption.

2) Steel: Steel consumption falls short of expectations during peak season, and demand weakens due to increased steel production control. Coke production in March was 39.37 million tons, -6% year-on-year; in January-March, coke production was 119.89 million tons, cumulative year-on-year ratio -0.5%; coke stocks were at a historically low level. On the downstream side, pig iron production in March was 72.66 million tons, -6.9% year on year; in January-March, pig iron production was 21.3.39 million tons, -2.9% year on year. Crude steel production in March was 88.27 million tons, -7.8% YoY; in January-March, crude steel production was 256.55 million tons, -1.9% YoY. Up to now, judging from sample data, the average daily production of coke and pig iron has remained low, and it is expected that the pace of resuming production will not be too fast in the short term.

3) Other non-electricity: Non-electricity demand is average, and cement building materials production is improving slowly. In March, cement production was 154.4 million tons, -22% year-on-year; in January-March, cement production was 336.84 million tons, a cumulative total of -11.8% year-on-year.

Affected by factors such as slow disbursement of capital, the launch of post-holiday projects was slow. At the same time, the real estate industry continued to bottom out, and cement production was lower than last year's level. Methanol production in March was 7.65 million tons, +9.01% YoY; urea production was 5.68 million tons; YoY +10.85%. Production in the chemical sector is active, but demand is relatively small, and the overall drive for demand is limited.

Risk warning:

(1) Downstream demand fell short of expectations; (2) import volume exceeded expectations; (3) production growth exceeded expectations.