CITIC Securities: 2026H1 coal industry recovery clearly shrinks supply or continues to support performance
The Zhitong Finance App learned that CITIC Securities released a research report saying that in the first half of 2026, driven by the year-on-year rise in coal prices and cost control, the sample companies' total net profit increased by about 34% year-on-year, and Q2 increased by about 41% month-on-month, and performance improved markedly. Mid-term dividend activity continued to increase, and the sector's cash dividend amount increased by about 28% year on year. Looking ahead, supply contracted due to stricter safety regulations after the mine disaster, the coal price center is expected to move upward, and the market is expected to fluctuate upward during the year.
CITIC Securities's main views are as follows:
Sample company H1 business situation: production declined slightly year-on-year, and rising coal prices led to an improvement in gross profit
The 23 listed coal companies tracked by the bank produced 709 million tons of raw coal in the first half of 2026, a year-on-year decrease of 2.0%, mainly affected by stricter safety regulations. The average sales price of coal rose 12.8% year on year. Among them, the average sales price of thermal coal/metallurgical coal companies increased by 12.0%/8.4% year on year, respectively. The average cost of coal per ton of listed companies in the sample rose by 5.4%. The cost growth rate was lower than the price growth rate, and gross margin improved. The average calculation value of gross profit per ton of coal of each sample company increased by 28.9% year-on-year. Among them, gross profit per ton of thermal coal/metallurgical coal increased by 23.4%/25.8%, respectively.
The net profit H1 of the sample listed companies increased 34% year over year, and total dividends for the medium term increased further
In the first half of 2026, the sample company achieved a total net profit of 74.8 billion yuan, an increase of 34.3% over the previous year; Q2 net profit increased 41.2% month-on-month. The total amount of the A share, B share, and H share sample companies tracked by the bank reached 31.35 billion yuan in 2026, an increase of 27.9% over the previous year. Two of these companies released their mid-term dividend plans for the first time, and 5 companies planned mid-term dividends for two consecutive years, indicating a marked increase in the sector's mid-term dividend activity.
Economic outlook for the year: supply contraction is continuous, and the coal price center may continue to move upward
After the disaster at the Shanxi mine in late May, safety supervision became stricter. From June to July, the country's raw coal production declined by about 10 ppts year-on-year. The bank expects policy strength and supply contraction effects to continue during the year. And although demand is weakening year over year, the release of seasonal demand pulses may also support the strengthening of coal prices. Under tight supply conditions, the short-term port thermal coal price may exceed 1,000 yuan/ton, and the average price of high-quality coking coal from the production area may reach 3,000 yuan/ton. The average price center in Q3/Q4 may continue to move upward, and the sector's performance is flexible or further expanding. In particular, the profit of the metallurgical coal sector in Q3 or increased 60% month-on-month.
Risk factors:
The easing of geographical conflicts and cuts in overseas coal production fell short of expectations, leading to a systematic decline in international coal prices; macroeconomic fluctuations affected coal demand and coal prices; implementation of supply contraction policies fell short of expectations, and safety inspections were relaxed, leading to an increase in supply; accelerated adjustment of the energy structure, increased energy saving and carbon reduction efforts, increasing pressure on coal consumption; weather factors disrupted or affected coal price expectations.
Investment strategy: The supply contraction effect remains unabated, and the sector is expected to fluctuate upward.
The effects of the recent contraction in supply continue to show, with various types of coal prices gradually reaching new highs during the year; looking ahead to the future market, thermal coal prices are expected to rise further if demand from the electricity industry is not released from September to October; if steel demand and prices pick up, coking coal prices will be more elastic. The bank continues to be optimistic about sector market conditions under contraction in supply. Against the backdrop of recent sector fluctuations, it can participate at dips.