01898 Overview

Market Response to Middle East Tensions: Aluminum and coal stocks surged on the 12th, with notable increases in companies like CHALCO and CHINAHONGQIAO, driven by heightened supply risks due to the ongoing conflict in the Middle East.

Impact on Commodity Prices: UBS reported that the conflict has elevated international prices for aluminum and thermal coal, with significant supply disruptions already affecting aluminum and potential future impacts on smelting capacity.

Forecast Adjustments: UBS raised its aluminum price forecast for 2026 by 13% to $3,250 per ton, while also increasing its thermal coal price forecast for the same year by 10% to $126 per ton, reflecting the ongoing energy price risks.

Natural Gas and Coal Price Dynamics: The rise in natural gas prices, influenced by the Iran conflict, has supported coal prices, with European natural gas prices increasing by about 50% and Brent crude oil prices by about 30%.

Global Energy Supply Risks: The situation in Iran has heightened global energy supply risks, potentially leading to an increase in coal prices, as noted in a CICC report.

Strategic Importance of Coal: Coal is becoming increasingly significant for China as a key energy source and raw material for chemicals, with potential for enhanced valuation of high-quality coal assets.

Stock Recommendations: JPMorgan recommends stocks such as YANKUANG ENERGY, YANCOAL AUSTRALIA, CHINA COAL ENERGY, and SHAANXI COAL IND, anticipating strong performance in coal and aluminum sectors.

Short Selling Data: The report includes short selling data for the recommended stocks, indicating varying levels of short interest across these companies.

Coal Production and Sales Decline: In 2025, China Coal's commercial coal production decreased by 1.8% year-over-year to 135 million tons, while sales dropped by 10.2% to 256 million tons.

Self-Produced Coal Sales: The sales of self-produced commercial coal also saw a slight decline of 0.9% year-over-year, totaling 136 million tons.

Board Recommendation: The Board of CHINA COAL has recommended the appointment of Gao Shigang as the executive director, pending shareholder approval.

Appointment Details: Gao will also serve as the president, with his term starting from the Board's approval until the new senior management is appointed.

Gao's Background: He is currently the Deputy Secretary of the Party Committee and General Manager of China National Coal Group Corporation, bringing extensive experience in the coal industry.

Market Information: The stock quote for CHINA COAL is delayed by at least 15 minutes, with short selling data indicating a significant amount of short interest.

Citi's Forecast Update: Citi has raised its earnings forecasts for CHINA COAL (01898.HK) for 2025-2027 by 28%, 39%, and 32%, projecting earnings of RMB16.2 billion, RMB15.2 billion, and RMB13.8 billion respectively.

Target Price Adjustment: The target price for CHINA COAL has been increased from HKD8.6 to HKD10.7, while maintaining a Neutral rating on the stock.

Production Decline: CHINA COAL reported a 7.4% year-over-year decrease in commercial coal production, totaling 11.17 million tons in November 2025.

Sales Volume Drop: The company's commercial coal sales volume fell by 15.7% year-over-year, amounting to 21.74 million tons, with self-produced sales down by 5.2% to 11.67 million tons.