1.Basic knowledge: There are many types of coal and the distribution is uneven.
There are many types of coal, which can be divided into power coal, coking coal, and chemical coal according to their use, accounting for their respective proportions in 2022. 3%。China accounts for half of the world's coal production and consumption, with coal production and consumption in 2022 being 45600 million tons, 42300 million tons, respectively, accounted for the world. 8%。China's coal supply and demand are mismatched, coal reserves and production are concentrated in North China and Northwest China, while coal consumption is concentrated in North China and East China.
2.Policy regulation: safe supply, flexible supply.
Policy regulation and controlCoal industryThe impact is mainly reflected in the supply and ** aspects. On the supply side, since 2016, China has launched supply-side structural reforms, increased the withdrawal of backward production capacity, and steadily released advanced production capacity; In 2020, the global economy stabilized and recovered after the epidemic, domestic and foreign demand grew rapidly, and China rapidly increased supply through the release of high-quality production capacity through nuclear increase; Establish an output and capacity reserve system to ensure the stability of coal**; Coal mine safety production supervision has disrupted supply in stages. In May 2022, the state and local governments clarified the reasonable range for medium and long-term thermal coal trading; Form a "2+4+4" negotiated pricing mechanism for coking coal. With the support of supply-side structural reform and long-term agreement price systemCoal industryThe high boom is expected to continue.
3.Supply and demand pattern: dynamic balance, **stable.
The supply side remains stable: in terms of thermal coal, domestic production: the main producing areas of Shanxi, Shaanxi and Mongolia account for about 75% of the output, and it is difficult to increase; The increase in domestic supply is in Xinjiang, and the construction of railways is expected to improve the capacity of Xinjiang's coal export; Foreign imports: Imports will reach a record high of 4 in 2023700 million tons, it is difficult to continue to grow. In terms of coking coal, domestic production: the production areas are mainly Shanxi, Shandong, Anhui, etc., and it is difficult to increase; Foreign imports: Mongolia's imports have growth potential. 
The demand side remains stable in the medium and long term: in the medium term, coal will still be the main energy source in China, and in the long run, the positioning of coal will change from the main energy force to the bottom line, and the proportion of non-fossil energy in China will increase steadily in the future.
4.Coal companies: stable operation and increased dividends.
Since 2020, with the development of coal, the operating income and net profit of major listed companies have achieved steady growth, and the dividend rate has increased, the dividend yield has improved, and the investment value has been highlighted. In terms of sub-sectors, there are many companies in the thermal coal sector, and there are many tens of millions of tons of mines, and China Shenhua is the industry leader; Most of the coking coal companies are concentrated in the central and eastern regions, Panjiang and Shanxi have a large number of coking coal resources, and Lu'an has a large output of environmental energy; There are few companies in the anthracite sector, concentrated in Shanxi, and Huayang has a large output.
5.Investment Recommendation: Maintain "Overweight" rating on the sector.
Coal is a basic energy commodity in China. Under the policy regulation and control, we will achieve safe supply and flexible supply, and ensure the use of coal for people's livelihood through the long-term agreement mechanism to stabilize the fluctuation. With the support of supply-side structural reform and long-term agreement price systemCoal industryThe high boom is expected to continue. Coal ** stable. Major coal companies have stable operations, increased dividends, and prominent investment value, maintaining an "overweight" rating in the industry.
This is an abridged excerpt from the report, the original PDF of the report
Fossil Energy-Coal Industry Research Framework-Guoxin**-20240201 [55 pages].
Report**: Value Catalog