According to financial intelligence sources, Guotai Haitong Securities has released a research report stating that recently, five listed companies including Pingmei Corporation simultaneously issued announcements declaring they received notifications from controlling shareholders that the Henan Provincial Party Committee and Provincial Government decided to implement strategic restructuring of Henan Energy and China Pingmei Shenma Holding Group. This rapid major merger of Henan Province's state-owned assets supervision commission's energy system, exceeding market expectations, represents an important implementation of deepening SOE reform. This acquisition marks a major breakthrough for SOE reform in the coal and power industry and is expected to drive a new wave of A-share SOE reform enthusiasm. Additionally, following the National Energy Administration's intervention in coal "anti-involution" in July, the national coal output in July-August was 380 million and 390 million tons respectively, significantly weaker than the monthly average output over the past 1.5 years (approximately 400 million tons), with actual coal production contraction leading among all anti-involution industries.
Guotai Haitong Securities' main viewpoints are as follows:
Investment opportunities from SOE reform deserve attention and are expected to create sector effects. After China Shenhua announced its hundred-billion-yuan asset acquisition plan in July, this week Pingmei Corporation, Shenma Corporation, Yicheng New Energy, Silane Technology, and Dayou Energy simultaneously issued announcements declaring they received notifications from controlling shareholders that the Henan Provincial Party Committee and Provincial Government decided to implement strategic restructuring of Henan Energy and China Pingmei Shenma Holding Group. China Shenhua's hundred-billion-yuan asset acquisition most likely reflects top-down directive from the state-owned assets supervision commission to group to listed company levels, reflecting high-level intentions. This rapid major merger of Henan Province's energy system by the provincial state-owned assets supervision commission, exceeding market expectations, also represents important implementation of deepening SOE reform. This acquisition marks a major breakthrough for SOE reform in the coal and power industry and is expected to drive a new wave of A-share SOE reform enthusiasm.
Supply and demand: Total social electricity consumption growth in August has recovered to 4.6% cumulatively, compared to only 2.5% growth in Q1, representing rapid and substantial recovery. Full-year growth is expected to recover above 5%, with demand side completely refuting market pessimistic expectations. In August, industrial raw coal production above designated size was 390 million tons, down 3.2% year-over-year and up 10 million tons month-over-month from July. Following the National Energy Administration's intervention in coal "anti-involution" in July, national coal output in July-August was 380 million and 390 million tons respectively, significantly weaker than the monthly average output over the past 1.5 years (approximately 400 million tons), with actual coal production contraction leading among all anti-involution industries. Looking at full-year output, H2 production is expected to decline slightly month-over-month due to "excess production inspections," with projected output of 2.35-2.4 billion tons, full-year output of 4.75-4.8 billion tons, basically flat year-over-year. Combined with confirmed declining imports, total supply shows a downward trend. Q2 2025 represents the fundamental turning point, with coal industry downside risks fully released.
Thermal coal: Prices rising in off-season. As of September 26, 2025, Q5500 warehouse delivery price at northern Huanghua Port was 713 yuan/ton, up 0.6% from the previous week. From supply perspective, domestic supply remains stable with imports continuing to contract; total domestic plus import supply is expected to maintain stable decline for the full year. On demand side, demand is expected to improve significantly in June-August, with Q3 profitability expected to rebound.
Coking coal: Spot and futures both rebounding, molten iron expected to remain strong in off-season. As of September 26, 2025, main coking coal warehouse delivery price at Jingtang Port (Shanxi production) was 1,710 yuan/ton, up 6.2% from the previous week. Daily average molten iron production declined slightly week-over-week, with demand side expected to remain strong in off-season.
Industry review: 1) As of September 25, 2025, main coking coal warehouse delivery price at Jingtang Port was 1,710 yuan/ton (+6.2%), Grade 1 coke at port was 1,696 yuan/ton (-0.5%), coking coal inventory at three ports totaled 2.59 million tons (-6.1%), operating rate for coking enterprises above 2 million tons was 79.18% (+0.08 percentage points). 2) Australia Newcastle Port Q5500 FOB price rose $1/ton (+1.3%), northern port (Q5500) seaborne coal cost 7 yuan/ton lower than Australian import coal; Australian coking coal CIF price was $205/ton, up $2/ton (+0.7%) from previous week, with Jingtang Port Shanxi main coking coal cost 34 yuan/ton higher than Australian import hard coking coal.
Risk warnings: Macroeconomic growth below expectations; large-scale entry of imported coal; supply exceeding expectations.