Morgan Stanley has released a research note indicating that management from CHINA SHENHUA (01088) communicated during a meeting that output in the first half of 2026 is expected to be lower, while the full-year production target remains steady at 513 million tonnes. The firm has kept its "Overweight" rating on the company alongside a price target of HK$48.3.

The investment bank highlighted that the reduced output in the first half stems from several factors, including delays in land acquisition processes in Inner Mongolia, adverse weather affecting coal seam stripping volumes, and shifts in mining face configurations. Management also conveyed that ongoing safety inspections have not exerted any influence on production figures.

Furthermore, the report notes that while the National Development and Reform Commission previously announced plans to boost coal shipments from Xinjiang, management perceives the near-term impact as limited. This is due to constrained transportation infrastructure and elevated railway expenses, with each tonne of coal transported from Xinjiang to eastern coastal ports costing approximately 600 yuan. Unless coal prices consistently exceed 860 yuan per tonne, the volume that can be economically shipped remains restricted.