Bank of America Securities released a research report recommending investors choose defensive state-owned enterprises. The bank is Bullish on PETROCHINA (00857), which has strong cash flow, maintaining a "Buy" rating and lowering the Target Price by 3% to 7.8 HKD.

The report states that this year is Bearish on the coal Industry and China Shenhua Energy (01088), due to expectations of limited coal demand growth, high inventory levels, and facing ongoing import threats. The bank estimates this year's thermal coal price at 720 RMB per ton (a 16% decrease year-on-year), with spot prices expected to be lower than contract prices from the second to the third quarter, while coking coal prices are estimated at 1,400 RMB per ton.

Bank of America Securities downgraded China Shenhua's rating from "Buy" to "Neutral," with the Target Price lowered by 23% to 34 HKD. It also downgraded YANKUANG ENERGY (01171) from "Buy" to "Underperform," with the Target Price reduced by 38% to 8 HKD. The bank maintains a "Neutral" rating on China Coal Energy (01898), with the Target Price lowered by 9% to 9.7 HKD.