Goldman Sachs raises profit forecasts for mainland coal stocks, increasing the target price for China Coal Energy to 16 yuan

Goldman Sachs published a research report indicating that last year, most cement stocks in the mainland commodity sector recorded year-on-year growth in recurring profits, generally exceeding expectations, while unit cement profits were roughly in line with or slightly below expectations; coal stock profits declined year-on-year, but unit coal profits were basically in line with expectations; steel companies continued to perform poorly but showed year-on-year improvement, and paper packaging companies also performed better than expected.

The bank raised its earnings forecast for the coal stocks it covers by 3% to 15%, reflecting a more optimistic outlook for coal and coal chemical product prices; it lowered the earnings forecast for cement stocks by 7% to 53%, reflecting a weak construction market and a weaker profit margin outlook for the first half of this year. Additionally, the profit margin situation for steel companies remains unchanged, with earnings forecast adjustments ranging from a decline of 8% to an increase of 51% under a low base.

The bank maintains a "Buy" rating on China Coal Energy (01898.HK), CONCH CEMENT (00914.HK), and China National Building Material (03323.HK), with target prices raised from HKD 11.5 to HKD 16, lowered from HKD 31 to HKD 28, and lowered from HKD 6.5 to HKD 6, respectively. Meanwhile, it upgraded the rating for Maanshan Iron & Steel (00323.HK) from "Sell" to "Neutral," with the target price raised from HKD 1.9 to HKD 2.5, as the valuation is approaching a reasonable level