Shenwan Hongyuan Group Co., Ltd. released a research report stating that while the market generally holds a long-term pessimistic view on the development prospects of traditional fossil energy, the firm believes that the energy structure transition is a protracted and complex systematic project. Coal's strategic role as a "guarantor of supply and a stabilizing ballast" cannot be replaced in the short term, and its rigid demand will continue to solidify the industry's fundamentals. Against this backdrop, the coal sector's characteristic as a "cash cow" is becoming increasingly entrenched. The expectation that coal prices will operate at reasonably high levels is anticipated to further drive the industry's profitability and dividend distribution capabilities beyond expectations, making its long-term investment value worthy of significant attention.

Shenwan Hongyuan's main views are as follows: On the supply side, the coal industry is undergoing a deep-seated restructuring of its supply landscape. In December 2025, six national departments issued the "Benchmark and Baseline Levels for Key Areas of Clean and Efficient Coal Utilization (2025 Edition)", bringing coal consumption for coal-fired power generation and heating, as well as coal-to-gas, under regulatory control. Coupled with increasingly stringent and normalized safety and environmental supervision, the supply order is further transitioning towards rationality and high quality. Additionally, with strict approvals for capacity replacement and new capacity in major production areas, the release of industry capacity is expected to continue a trend of being stable yet tight, thereby continuously enhancing the bargaining power of high-quality, compliant capacity. The wave of anti-globalization is fueling the ongoing awakening of resource nationalism. As a critical strategic energy source, coal's core value in safeguarding national energy security is being re-emphasized. Since December 2025, Indonesia has explicitly lowered its coal production target for 2026, reinstated a 1%-5% coal export tariff, and tightened foreign exchange management, aiming to consolidate control over its resources through production regulation and tax adjustments.

On the demand side, the underlying trend of rigid growth in total electricity consumption persisted in December 2025, indicating continued resilience in coal power demand. Meanwhile, the coal chemical sector is gaining new growth momentum, with projects like coal-to-liquids and coal-to-olefins accelerating their implementation. Chemical coal consumption in December increased by 7% year-on-year, maintaining a high growth trend and becoming the core driver of demand growth. Overall, total coal demand in 2026 is expected to remain stable and achieve slight growth.

Investment Analysis Opinion: The firm is optimistic about the continued rebound in thermal coal prices. It recommends focusing on growth-oriented companies such as Tebian Electric Apparatus Stock Co., Ltd., JinKong Coal Industry, Huayang Energy Co., Ltd., Xinji Energy Co., Ltd., Huaihe Energy Co., Ltd., and Yankuang Energy Group Company Limited. It recommends stable operators with high dividends and high yields, such as China Shenhua Energy Company Limited, Shaanxi Coal Industry Company Limited, and China Coal Energy Company Limited, and suggests paying attention to Inner Mongolia ERDOS Resources Co., Ltd. For elastic coking coal plays, it recommends Shanxi Coking Coal Group Co., Ltd., Huaibei Mining Industry Group Co., Ltd., and Lu'an Environmental Energy Development Co., Ltd.

Risk warnings include: New energy supply increases exceeding expectations; energy storage technology development progressing faster than anticipated; macroeconomic performance下滑超预期下滑 (declining more than expected); coal demand falling below expectations; a significant decline in international coal demand; and international coal prices falling more than expected.