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China International Capital Corporation: Reiterates a "Neutral" rating for the Coal Industry but recommends to Buy China Shenhua Energy.
China International Bank released a Research Report stating that due to weak demand and increased supply, the benchmark price for spot Thermal Coal in China has fallen to its lowest level in four years. The bank expects that with high inventory levels, coal prices will not rebound in the next two months. The situation for coking coal is even worse, with the benchmark price dropping to its lowest level in nearly eight years. Therefore, the bank has significantly lowered its coal price forecasts, expecting the average spot prices for this year’s benchmark Thermal Coal and coking coal to drop by 17% and 35% year-on-year, respectively. The profitability of coal producers is inevitably expected to decline sharply again this year. The bank reaffirmed its 'neutral' rating on the Coal Industry, with China Shenhua Energy (01088) being the only one rated as 'Buy' in the industry.
Dividends exceeded 44 billion with a ratio as high as 76%! China Shenhua Energy's performance declined but still maintained its high dividend "tradition" | Directly reporting on the Earnings Conference.
① Executives from China Shenhua Energy stated at the Earnings Conference that they anticipate the central prices of the coal market and long-term contracts will decline further by 2025; ② Chairman Lv Zhirun has resigned due to retirement reasons after less than a year in office, leaving the position of chairman of the company vacant.
China Securities Co.,Ltd.: The price of Thermal Coal may maintain a downward trend, and the value of green electricity environmental benefits is expected to be realized more quickly.
China Securities Co.,Ltd. released a research report stating that overall, under the stable growth trend of raw coal production, Thermal Coal prices are expected to maintain a downward trend, and the profitability of thermal power is expected to be sustained.
Statistics on Capital Trend of Hong Kong Stock Connect (T+2) | March 27
Capital Trend of Hong Kong Stock Connect | March 27.
Goldman Sachs: Downgraded China Shenhua Energy's earnings forecast reflects weak Coal and coal-fired power prices, lowering the Target Price to HKD 29.5.
Goldman Sachs released a Research Report stating that China Shenhua Energy (01088) surpassed the bank and market expectations for last year's Net income, with a dividend of 2.26 RMB per share and a payout ratio of 72% calculated under international financial reporting standards, higher than the 70% in 2023. The bank lowered its profit forecasts for Shenhua for this year and next year by 5% to 7%, reflecting lower assumptions for Coal prices and weaker coal-electricity prices, partially offset by better-than-expected cost control. The bank expects strong operating Cash flow and a continuously strong balance sheet will support Shenhua in maintaining a 70% payout ratio, corresponding to a yield of 7.2 cents. The bank maintains a "Neutral" rating on Shenhua, with a target.
Goldman Sachs: Downgraded China Shenhua Energy (01088) earnings forecasts reflecting weak Coal and coal power prices, lowering the Target Price to HKD 29.5.
The bank lowered Shenhua's earnings forecast for the next two years by 5% to 7%, reflecting lower assumptions for Coal prices and weaker coal-to-electricity prices, partially offset by better-than-expected cost control.
