--- title: "Dongfang Caifu Securities: Q2 2025 may be the low point for the year's performance, optimistic about the upward opportunities in the coal sector" type: "News" locale: "en" url: "https://longbridge.com/en/news/260387585.md" description: "Dongfang Caifu Securities released a research report indicating that the second quarter of 2025 may be the low point for the coal industry's annual performance. The total profit of the coal industry in the first half of 2025 is expected to be 149.2 billion yuan, a year-on-year decrease of 52.9%. As the coal market warms up and mainstream coal companies raise their prices, it is expected that performance in the second half of 2025 will increase quarter-on-quarter. Although the industry's debt scale has reached a new high, the debt-to-asset ratio remains around 60%" datetime: "2025-10-09T07:31:06.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/260387585.md) - [en](https://longbridge.com/en/news/260387585.md) - [zh-HK](https://longbridge.com/zh-HK/news/260387585.md) generator: "portal-rs" --- # Dongfang Caifu Securities: Q2 2025 may be the low point for the year's performance, optimistic about the upward opportunities in the coal sector According to the Zhitong Finance APP, Dongfang Caifu Securities released a research report stating that the total profit of the coal industry in H1 2025 was 149.2 billion yuan, a year-on-year decrease of 52.9%, with Q1/Q2 profits of 80.4 billion and 68.8 billion yuan respectively, down 47.4% and 58.1% year-on-year. In H1 2025, capital expenditure in the coal industry slowed down, while listed companies' capital expenditure continued to grow by 47% year-on-year. The industry's debt scale reached a new high of 4.8 trillion yuan, but the debt-to-asset ratio remained around 60%. The average net profit per ton of coal in H1 2025 decreased by 30% year-on-year, and the net profit attributable to the parent company in Q2 2025 decreased by 14% quarter-on-quarter. Q2 2025 may be the low point for the year's performance; since July, with the recovery of the coal market, mainstream coal companies have significantly increased their selling prices, and costs still have special reserves and safety cushions, making a quarter-on-quarter increase in performance in H2 2025 expected. ## The main points of Dongfang Caifu Securities are as follows: **The total profit of the coal industry in H1 2025 was 149.2 billion yuan, a year-on-year decrease of 52.9%, with Q1/Q2 profits of 80.4 billion and 68.8 billion yuan respectively, down 47.4% and 58.1% year-on-year.** In terms of monthly profit per ton of coal, after reaching a historical peak of 366 yuan/ton in October 2021, the industry's profit per ton of coal has generally declined, mainly due to a drop in coal prices. In June 2025, the industry's profit per ton of coal was 54 yuan/ton, reaching a new low since the supply-side reform in 2016. The number and proportion of loss-making enterprises in the industry continued to rise in H1 2025, with a loss ratio of 56% as of June 2025, an increase of 13.6 and 10 percentage points compared to the same period and the end of 2024 respectively. **Capital expenditure in the coal industry slowed down in H1 2025, while listed companies' capital expenditure continued to grow by 47% year-on-year, and the industry's debt scale reached a new high of 4.8 trillion yuan, but the debt-to-asset ratio remained around 60%.** In H1 2025, the cumulative year-on-year growth of fixed assets in the coal industry was 14.4%, a slowdown from the 16.6% growth in H1 2024. After reaching a new high since 2015 in 2024, listed companies' capital expenditure continued to grow in H1 2025, with a total capital expenditure of 84 billion yuan, an increase of 26.9 billion yuan year-on-year, a growth rate of 47%. Since 2023, the industry's debt-to-asset ratio has generally remained around 60%, with a new high of 4.79 trillion yuan in June 2025. **The average net profit per ton of coal in H1 2025 decreased by 30% year-on-year, and the net profit attributable to the parent company in Q2 2025 decreased by 14% quarter-on-quarter, possibly marking the low point for the year's performance.** The average cost per ton of coal for major listed coal companies decreased, with an average decline of 19.5% and 4.2%, resulting in a 30% decrease in average net profit per ton of coal. In H1 2025, operating revenue and costs were 582.5 billion and 426.5 billion yuan respectively, down 18% and 15% year-on-year, with a total net profit attributable to the parent company of 55.2 billion yuan, down 32% year-on-year (excluding Shenhua, 25.5 billion yuan, down 34%). In Q2 2025, operating revenue and costs were 286.3 billion and 209.2 billion yuan, down 3.3% and 3.7% quarter-on-quarter, with a total net profit attributable to the parent company of 25.5 billion yuan, down 13.9% quarter-on-quarter (excluding Shenhua, 12.8 billion yuan, down 27.4% quarter-on-quarter). Dongfang Caifu Securities believes that Q2 2025 may be the low point for the year's performance; since July, with the recovery of the coal market, mainstream coal companies have significantly increased their selling prices, and costs still have special reserves and safety cushions, making a quarter-on-quarter increase in performance in H2 2025 expected **In the first half of 2025, the profitability pressure in the coal industry is prominent. Affected by the market, the decline in costs and expenses is significantly less than the selling price, but leading companies maintain profit resilience.** **China Shenhua's 79% interim dividend highlights its leading stature.** The average ROE of coal sample companies (excluding coking coal companies and Anyuan Coal Industry) in the first half of 2025 is only 1.9%, a decrease of 3.6 percentage points from 5.4% in the first half of 2024; the average cash flow on the books of sample companies is 13.5 billion yuan, down 13% from 15.5 billion yuan in the first half of 2024. Affected by the decline in revenue, the sales/management/financial expense ratios in the first half of 2025 have all increased, with an average expense ratio of 0.86%/7.7%/2.96%, year-on-year increases of +0.15/+0.7/+0.81 percentage points. However, leading companies with a high proportion of long-term contracts, represented by China Shenhua and China Coal Energy, demonstrate performance resilience, with a quarter-on-quarter increase of +6.2%/-6.3% in net profit attributable to shareholders in the second quarter of 2025, and China Shenhua's first interim dividend ratio of 79% showcases its leading stature. **Investment Recommendation:** Dongfang Caifu Securities believes that the second quarter of 2025 may be the annual performance low point for coal companies. Since July, with the continuous interpretation of the "anti-involution" policy logic and the issuance of capacity verification documents by the National Energy Administration, coal prices have further solidified at the bottom, and it is anticipated that the sector will enter a long-term upward cycle. It is recommended to pay attention to opportunities in the sector. **Target Aspects:** (1) Considering the significant decline in coking coal futures prices earlier and the recent sharp rebound in coking coal spot prices, it is recommended to pay attention to coking coal stocks Lu'an Environmental Energy (601699.SH), Pingmei Shenma Energy (601666.SH), Huaibei Mining (600985.SH), and Shanxi Coking Coal (000983.SZ); (2) Long-term beneficiaries of the solidified coal price lower limit dividend stocks China Coal Energy (601898.SH), China Shenhua (601088.SH), and Shaanxi Coal and Chemical Industry (601225.SH); (3) Elastic targets for thermal coal Jinkong Coal Industry (601001.SH) and Yanzhou Coal Mining (600188.SH); (4) Looking ahead to 2025, continue to pay attention to companies expected to continue growing in performance, such as Shenhuo Co., Ltd. (000933.SZ) and Electric Power Investment Energy (002128.SZ); (5) Companies benefiting from the implementation of coal production capacity reserve policies, intelligent transformation of coal mine safety, and the "Belt and Road" initiative, such as Tiandi Technology (600582.SH) and Zhongchuang Zhiling (601717.SH). **Risk Warning:** Downstream demand decline, risks of supply guarantee and price stability, and risks of international geopolitical disturbances affecting domestic export industrial demand ### Related Stocks - [CSUAY.US](https://longbridge.com/en/quote/CSUAY.US.md) - [601088.CN](https://longbridge.com/en/quote/601088.CN.md) - [01088.HK](https://longbridge.com/en/quote/01088.HK.md) - [601898.CN](https://longbridge.com/en/quote/601898.CN.md) - [01898.HK](https://longbridge.com/en/quote/01898.HK.md) - [601225.CN](https://longbridge.com/en/quote/601225.CN.md) ## Related News & Research - [China Shenhua posts 2026 interim report and interim financial report](https://longbridge.com/en/news/297327331.md) - [China Shenhua FY26 H1 net profit attributable to shareholders climbs 1.9% to RMB 31.05 billion; revenue rises 7.9% to RMB 189.34 billion](https://longbridge.com/en/news/297327386.md) - [Renewables’ installed capacity to beat natural gas within a year – EIA data](https://longbridge.com/en/news/297354470.md) - [Wintime Energy Group: Revenue and profit fell on higher costs, but cash flow and coal mine expansion support future growth](https://longbridge.com/en/news/297318953.md) - [Tianjin Development FY26 H1 profit attributable to owners falls 5.58% to HK$ 325.22 million; revenue slips 3.53% to HK$ 1.66 billion](https://longbridge.com/en/news/297300410.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**