Cathay Securities and Haitong Securities: Anti-involution and state-owned enterprise reform are expected to become key directions for the coal industry in the future

According to the Zhitong Finance APP, Guotai Junan released a research report stating that recently, Pingmei Coal and four other listed companies simultaneously announced that they received notifications from their controlling shareholders. The Henan Provincial Party Committee and Provincial Government decided to implement a strategic restructuring of Henan Energy and China Pingmei Shenma Holding Group. This rapid energy system merger by the Henan State-owned Assets Supervision and Administration Commission, exceeding market expectations, is also an important implementation of deepening state-owned enterprise reform. This acquisition marks a significant breakthrough in state-owned enterprise reform within the coal and electricity industry, which is expected to drive a new wave of enthusiasm for state-owned enterprise reform in A-shares. Additionally, with the National Energy Administration intervening in coal "anti-involution" in July, the national coal production in July and August was 380 million and 390 million tons, significantly weaker than the average monthly production of about 400 million tons over the past year and a half, with actual coal production contraction leading among all anti-involution industries. Guotai Junan's main viewpoints are as follows: Investment opportunities brought by state-owned enterprise reform need to be emphasized, with the potential to form a sector effect After China Shenhua announced a trillion-yuan asset acquisition plan in July, this week, Pingmei Coal, Shenma Co., Yicheng New Energy, Silane Technology, and Dayou Energy simultaneously announced that they received notifications from their controlling shareholders. The Henan Provincial Party Committee and Provincial Government decided to implement a strategic restructuring of Henan Energy and China Pingmei Shenma Holding Group. The trillion-yuan asset acquisition by China Shenhua is likely top-down, reflecting the top-level will from the State-owned Assets Supervision and Administration Commission to the group and then to the listed companies. This rapid energy system merger by the Henan State-owned Assets Supervision and Administration Commission, exceeding market expectations, is also an important implementation of deepening state-owned enterprise reform. This acquisition is a significant breakthrough in state-owned enterprise reform within the coal and electricity industry, which is expected to drive a new wave of enthusiasm for state-owned enterprise reform in A-shares. Demand and supply sides In August, the total electricity consumption in society has cumulatively increased back to 4.6%, a rapid rebound compared to only 2.5% growth in Q1, and it is expected that the annual growth rate will rebound to over 5%, completely disproving the market's pessimistic expectations on the demand side. In August, the output of raw coal in large-scale industries was 39 million tons, a year-on-year decrease of 3.2%, but an increase of 10 million tons compared to July. With the National Energy Administration intervening in coal "anti-involution" in July, the national coal production in July and August was 380 million and 390 million tons, significantly weaker than the average monthly production of about 400 million tons over the past year and a half, with actual coal production contraction leading among all anti-involution industries. Looking ahead to the annual production, it is expected that in H2, influenced by "checking overproduction," national production is expected to decline slightly on a month-on-month basis, with an estimated production of 2.35 to 2.4 billion tons, and an annual production of 4.75 to 4.8 billion tons, basically flat year-on-year. Coupled with the certainty of declining imports, total supply shows a downward trend. Q2 2025 will be the turning point for the fundamentals, with the downward risk in the coal industry fully released. Thermal coal: Price rebounds in the off-season As of September 26, 2025, the Q5500 closing price at Huanghua Port in northern China was 713 yuan/ton, an increase of 0.6% from the previous week. From the supply perspective, domestic stability continues, and imports continue to shrink: it is expected that the total supply of domestic and imported coal will basically maintain a stable decline throughout the year; on the demand side, it is expected that demand will significantly improve from June to August, and Q3 profits are expected to rebound. Coking coal: Both futures and spot prices rebound, iron and steel are expected to remain strong in the off-season As of September 26, 2025, the main coking coal stock at JingTang Port has increased its price to 1710 yuan/ton, up 6.2% from the previous week. Last week's average daily pig iron production slightly decreased month-on-month, with demand expected to remain strong in the off-season Industry Review: 1) As of September 25, 2025, the main coking coal stock at JingTang Port is priced at 1710 yuan/ton (6.2%), first-grade coke at the port is priced at 1696 yuan/ton (-0.5%), and the total coking coal inventory at three ports is 2.59 million tons (-6.1%), with a utilization rate of coking enterprises with over 2 million tons at 79.18% (0.08 PCT). 2) The offshore price of Q5500 at Newcastle Port, Australia, increased by 1 USD/ton (1.3%), and the price of coal at northern ports (Q5500) is 7 yuan/ton lower than the cost of Australian imported coal; the CIF price of Australian coking coal is 205 USD/ton, up 2 USD/ton (0.7%) from the previous week, while the cost of Shanxi-produced main coking coal at JingTang Port is 34 yuan/ton higher than that of Australian imported hard coking coal. Risk Warning Macroeconomic growth may be below expectations; large-scale imports of coal; supply may exceed expectations