According to Zhitong Finance APP, on October 20th, Hong Kong coal stocks continued their strong performance from last week. By the close, JINMA ENERGY (06885) surged over 15%, YANKUANG ENERGY (01171) rose nearly 4%, and China Shenhua (01088) increased by more than 2%. On the news front, due to abnormal weather before and after the National Day holiday, the southeastern coastal areas experienced rare high temperatures, coupled with expectations of a cold winter driving winter storage demand, the recent domestic coal daily consumption has reached the highest level for the same period in the past five years. In addition, since the energy bureau's inspection of overproduction policies in July, domestic coal production has been continuously suppressed from various aspects, with coal production in July and August declining year-on-year for two consecutive months, and overall inventory has fallen below last year's level. Guotai Junan pointed out that the industry benefits from a dual improvement in supply and demand fundamentals, leading to coal prices rising beyond expectations.
Specifically, thermal coal prices have rebounded in the off-season. As of October 17, 2025, the closing price for Q5500 at Huanghua Port in northern China was 750 yuan/ton, an increase of 34 yuan/ton (4.7%) from the previous week. In terms of supply, it remains stable domestically, while imports continue to decrease: 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, the off-season demand has significantly improved, and Q3 profits are expected to rebound.
Coking coal futures and spot prices have both rebounded, and iron and steel production is expected to remain strong in the off-season. As of October 17, 2025, the price for premium coking coal at Jing Tang Port (Shanxi production) was 1690 yuan/ton, an increase of 30 yuan/ton (1.8%) from the previous week. Last week, the average daily pig iron production slightly decreased compared to the previous week, but demand is expected to remain strong in the off-season.
In terms of inventory, the inventory pressure across all links has significantly eased compared to the first half of the year, supporting the rebound in coal prices. The inventory at major Chinese ports is 60.43 million tons, down more than 18 million tons from the mid-May peak, and lower than the same period last year by 5.8%; coal companies have improved sales, leading to a decrease in inventory. In August, the inventory of six major state-owned coal mines in China was 24.23 million tons, down 8.25% month-on-month and up 0.48% year-on-year, returning to last year's level. Power plant inventories are slightly higher than the same period last year. Pig iron production remains high, with good downstream demand and coking coal inventories above last year's levels; the supply-demand pattern has improved, and port inventories are significantly lower than last year.
From the demand side, the total electricity consumption in August 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%. As we enter the normal demand off-season in September and October, the unexpected demand has already emerged. After the October holiday, the East China region still maintains a high level, leading to daily consumption reaching the highest level for the same period in the past five years, while inventories are also lower than those in the same period of 2023-2024.
From the supply side, the contraction of coal supply under the influence of anti-involution is leading the entire industry. Following the State Energy Administration's intervention in coal &#34;anti-involution&#34; in July, coal production nationwide 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. In August, the output of industrial raw coal was 390 million tons, a year-on-year decrease of 3.2%, with an increase of 10 million tons compared to July. Looking ahead to the annual production, it is expected that in Q4, due to the &#34;overproduction inspection,&#34; national production is expected to slightly decline month-on-month, with subsequent production from September to December expected to maintain at 39-40 million tons per month, with an annual production of around 4.75 billion tons, a year-on-year decrease of 30-50 million tons
In addition, from the changes in PE and PB, the coal industry in 2020 has grasped the opportunity for a bottom reversal.
Looking at the changes in PE and PB in the coal sector, it can be observed that after a period of rapid development, both PE and PB in the coal industry have shown a downward trend. During this period, there were two significant divergences in PE and PB. The first occurred from 2014 to 2017, mainly driven by the previous bull market that pushed the index up, while the later period saw poor profits from coal companies, leading to high PE. The second divergence has been from mid-2024 to the present, initially due to falling coal prices and poor profits from coal companies. However, after the rebound in coal prices in the second half of 2025, profits for coal companies are expected to improve, and the fourth quarter coal prices have upward elasticity. Coupled with the current market recovery, the coal sector has performed significantly worse than other sectors, and the bottom is clear, making the fourth quarter rebound of the sector promising.
Guosen Securities stated that after the rebound in coal prices in the second half of 2025, profits for coal companies are expected to improve, and the fourth quarter coal prices have upward elasticity. Coupled with the current market recovery, the coal sector has performed significantly worse than other sectors, and the bottom is clear, making the fourth quarter rebound of the sector promising. After the holiday, coal prices quickly stopped falling and rebounded, reflecting the continued strengthening of supply tightening expectations, raising the bottom for coal prices. The release of demand during the peak season may open up upward space for coal prices. The second quarter simultaneously verifies the bottom of coal prices and performance, and the current sector has high PE and low PB, positioned at a cyclical low, with rising coal prices potentially opening up rebound space for the sector.
Guotai Junan believes that the industry fundamentals benefit from improvements on both the supply and demand sides, with coal price increases continuing to exceed expectations. Under the influence of supply-side anti-involution policies, the safety supervision of coal mines has been strengthened, and overproduction is expected to further decrease, reinforcing expectations of coal supply contraction. On the demand side, the La Niña phenomenon is driving expectations of a cold winter, boosting winter storage demand. Additionally, unusual weather before and after this year's National Day has led to rare high temperatures in the southeastern coastal areas, pushing daily coal consumption to historical highs. In terms of market risk preference, the resurgence of trade conflicts may lead to a more intense switch in styles that already have high and low cuts. Whether it is the defensive dividend attributes or the significant turning points in the low-end fundamentals, coal is likely to greatly enhance its attractiveness to the market.
Related concept stocks:
China Shenhua (01088): According to China Merchants Securities, China Shenhua's net profit attributable to shareholders in the first half of 2025 is expected to be 24.641 billion yuan, a year-on-year decrease of 12.0%; the net profit attributable to shareholders after deducting non-recurring gains and losses is expected to be 24.312 billion yuan, a year-on-year decrease of 17.5%; the net operating cash flow is expected to be 45.794 billion yuan, a year-on-year decrease of 11.7%. A high proportion of long-term contracts supports coal prices, and cost control stabilizes gross profit. The company insists on returning to investors, with a mid-term dividend payout ratio of 79%. As a leading energy company, with coal business as its cornerstone, it actively develops multiple fields such as electricity and transportation, forming an integrated layout of coal, electricity, and transportation, which is beneficial for enhancing performance stability. The company’s profitability is continuously optimistic, maintaining a &#34;strong buy&#34; investment rating.
Yankuang Energy (01171): According to Founder Securities, Yankuang Energy is a leading coal company in North China, with coal bases in Shandong, Shaanxi, Inner Mongolia, and Australia. It is also the only coal company in China with a significant overseas resource base, having officially entered the overseas coal market in 2004 by acquiring the Austar coal mine in Australia and establishing Yankuang Australia
The company has always been a high-dividend enterprise, and it has committed to a dividend payout ratio of no less than 60% for the years 2023-2025. Currently, the company still offers good value for money, especially with the low PE valuation of Hong Kong stocks, corresponding to a high dividend yield at the current stock price. It is believed that YANKUANG ENERGY's Hong Kong stock dividend yield has investment value.
China Coal Energy (01898): Guohai Securities pointed out that China Coal Energy's net profit attributable to shareholders in the first half of the year was 7.7 billion yuan, a year-on-year decrease of 21.3%; the net profit attributable to shareholders in Q2 was 3.727 billion yuan, a quarter-on-quarter decrease of 6.3% and a year-on-year decrease of 22.7%. Considering the company's high proportion of long-term contracts and strong performance stability, along with the future production of the Liubi Coal Mine and Weizigou Coal Mine, as well as the gradual ramp-up of its coal chemical business, there is still room for performance growth. At the same time, the company is increasing dividends to enhance shareholder returns and maintains a &#34;Buy&#34; rating

06885

600188

01171

Hong Kong coal stocks continued their strong performance on October 20, with JINMA ENERGY rising over 15% and YANKUANG ENERGY increasing nearly 4%. Due to abnormal weather and expectations of a cold winter, domestic coal consumption has reached the highest level for the same period in the past five years. Guotai Junan pointed out that coal prices continue to rise due to improvements in both supply and demand, with thermal coal prices rebounding and coking coal futures and spot prices both bouncing back, significantly alleviating inventory pressure and supporting the rebound in coal prices

Zhitong

JINMA ENERGY

YANKUANG ENERGY

Hong Kong Stock Concept Tracking | Coal stocks continue to show strong performance! Daily coal consumption has reached the highest level for the same period in the past 5 years. Institutions are optimistic about the sector's rebound in the fourth quarter (with related stocks attached)