The coal sector rises, with Zhengzhou Coal & Electricity and Yankuang Energy hitting the daily limit, and China Coal Energy and others surging.

The coal sector gained momentum and rose during the trading session on the 12th. As of the latest report, Zhengzhou Coal & Electricity, Yankuang Energy hit the daily limit, China Coal Energy rose nearly 10%, and Lu’an Environmental Energy and JinKong Coal Industry increased over 6%.

Fangzheng Securities pointed out that recently, the escalation of Middle Eastern geopolitical conflicts has triggered market concerns over potential disruptions in crude oil supply, causing international oil prices to rise accordingly. Based on energy substitution logic, the expected demand for coal is likely to improve. Additionally, considering the Indonesian government’s significant production cuts earlier this year, which led to a coal shortage in the international market, and the rapid decline in Indonesian and overseas coal inventories, China’s imported coal costs have increased, driving port coal prices sharply higher. Coupled with the growing electricity demand for AI applications in the future, coal prices are expected to see substantial growth.

The institution stated that the tightening of supply in the coal industry has become an investment theme. The oversupply situation is expected to reverse, and as policies to tighten capacity on the supply side continue to be implemented through 2026, restrictions on imported coal can also be anticipated. China Shenhua and China Coal Energy, which have a high proportion of long-term contracts, show strong performance stability. If coal prices remain high, undervalued stocks like Yankuang Energy (Hong Kong stocks) and China Coal Energy (Hong Kong stocks) may also see valuation recovery.