Damo: Yankuang Energy (01171)'s preliminary results for the second quarter are in line with expectations and reaffirms the “gain” rating

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Yankuang Energy (01171) expects net profit to increase 53% year-on-year to 7.2 billion yuan in the first half of 2026, and the performance is in line with the bank's forecast of 7.16 billion yuan. After deducting non-recurring profit and loss, recurring profit increased 2% year-on-year to RMB 4.5 billion in the first half of the year. This meant that its net profit for the second quarter in a single quarter increased 74% year over year to RMB 3.2 billion. Morgan Stanley reiterated its “increase” rating on Yankuang Energy, and the target price for H shares remained unchanged at HK$15.6.

The bank pointed out that the company's good performance in the first half of the year mainly reflected higher coal prices supported by resilient demand, rising coal chemical prices affected by the Middle East conflict, and high investment returns brought about by the disposal of 100% of Inner Mongolia's Xintai Coal shares. Recently, thermal coal prices have received short-term support due to the potential increase in daily consumption of power plants and the release of demand to replenish stocks after rainfall in many places. Meanwhile, due to the coal mine accident in late May, safety inspections were tightened, supply was limited in major coal-producing provinces such as Shanxi, and coking coal prices are also expected to be supported. Better coal prices and coal chemical profits will continue to bring resilient profit performance to Yankuang Energy.