Zhongtong Finance APP learned that GTJA released a research report stating that the reshaping of the valuation of the coal sector is underway, reflecting not only the profound changes in the supply and demand structure of the coal industry, and the gradual 'public utility'-ization, but also the investment strategy issue of the high dividend assets that are more favored by the market trend towards a downward trend in risk-free returns under the background of asset shortage. Recommended high-profitability and stable earnings predictability leaders: Shaanxi Coal Industry (601225.SH), Shenhua Energy (601088.SH); recommending the coal and electricity integration of China Coal Xinji Energy, benefiting Shaanxi Energy (001286.SZ); recommending long-term coking coal: Hengyuan Coal Electricity (600971.SH), Pingdingshan Tianan Coal Mining (601666.SH), Huaibei Mining Holdings (600985.SH), Shanxi Coking Coal Energy Group (000983.SZ); recommending central enterprises leading the national reform: China Coal Energy (601898.SH); recommending the leading sprayed coal dragonhead, Shanxi Lu'an Environmental Energy Dev.Co.,Ltd (601699.SH); recommending the fundamental turning point, Shanxi Coal International Energy Group (600546.SH).
According to China GTJA's view:
Thermal coal: price increases are expected in July, but it is unlikely for the peak season to be prosperous. This week, from June 17th, 2024 to June 21st, 2024, the closing price of Huanghua Port Q5500 was 858 yuan/ton, a 20 yuan/ton decrease from last week, continuing to show a downward trend. Although South China has gradually emerged from continuous cloudy and rainy weather, the East China has begun to enter the rainy season. The overall daily consumption of the southern region is difficult to rise significantly, and the current situation of the South being weaker than the North remains unchanged. At the same time, from the macro data disclosed in May, the certainty of water and electricity recovery brought about by the cloudy and rainy weather in South China has begun to suppress thermal power, and the trend is expected to continue in June. It is expected that the price ceiling this summer will be difficult to break through 950 yuan/ton, which has been predicted since April and is now gradually being verified again.
Coking coal: Q3 long-term contract prices are expected to remain stable. Jing Tang port's main coking coal warehouse price (produced in Shanxi) was RMB 2020/ton, unchanged month-on-month. The bank believes that the market is still relatively pessimistic about demand for real estate and infrastructure, and infers that the steel demand in June will be in the off-season, and profitability and output are expected to have significant downward pressure. However, the daily output of pig iron in the steel mill has remained at 2.39-2.40 million tons/day (the highest in 2023 was only 2.45-2.48 million tons/day), which is higher than the average of 2.38 million tons/day in 2023. At the same time, the mainstream coking coal market rose by 50 yuan/ton this week, which also reflects the short-term downward pressure on the price of raw materials under the situation of better steel demand. The bank judges that Q3 long-term contract prices are likely to remain stable, which also means that the long-term contract price of 2100 yuan/ton is higher than the same period of around 1900 yuan/ton, and will have a significant upward push. The profits of listed coking coal companies will recover and their certainty will increase year-on-year. The turning point of coking coal may occur at the intersection of the off-season and the peak season in August, and it is still bullish on price elasticity in Q4.
Industry Review: 1) As of June 29th, 2024, the inventory of Qinhuangdao Port was 5.97 million tons (0.2%). The main coking coal warehouse price in Jing-Tang port was RMB 2020/ton (0.0%). The port level coke was RMB 2077/ton (2.5%), and the total inventory of coking coal in the three ports was 240.7 million tons (3.5%). The operating rate of coking enterprises with a capacity of over 2 million tons was 77.25% (0.07PCT). 2) The offshore price of Q5500 at the port of Newcastle in Australia fell by 2 US dollars/ton (-1.7%), and the difference between North China Port (Q5500) and Australian imported coal was 49 yuan/ton. The landed price of Australian coking coal was US$254/ton, a decrease of US$17/ton (-6.1%) from last week. The cost of Shanxi-made coke in Jing Tang Port is 87 yuan/ton lower than that of imported hard coking coal from Australia.
Risk warning: macroeconomic growth is lower than expected; large-scale imported coal enters the market; supply exceeds expectations.