Bank of America Securities has published a research report indicating a bearish outlook on the Coal Industry and Shenhua (01088.HK) this year, as it is expected that the growth of coal demand will be limited, and inventory is at historically high levels, facing ongoing import threats. The bank predicts that this year's thermal coal price will be 720 yuan per ton (down 16% year-on-year), and spot prices are expected to be lower than contract prices from the second to the third quarter, while coking coal prices will be 1,400 yuan per ton.

Bank of America Securities has downgraded Shenhua's rating from 'Buy' to 'Neutral', with the target price reduced by 23% to 34 yuan, and has also downgraded YANKUANG ENERGY (01171.HK) from 'Buy' to 'Underperform', with the target price cut by 38% to 8 yuan. The bank maintains a 'Neutral' rating on China Coal Energy (01898.HK), with the target price lowered by 9% to 9.7 yuan.

The bank continued to indicate that due to weak demand and macro uncertainty, construction investors are opting for defensive state-owned enterprises. The bank is bullish on PetroChina (00857.HK), which has strong cash flow, maintaining a 'Buy' rating and lowering the target price by 3% to 7.8 yuan.