CITIC Securities Coal Q3 Performance Forecast: Sentiment Improves Quarterly and Maintains Rapid Growth

The Zhitong Finance App learned that CITIC Securities released a research report saying that although the insurance policy is gradually progressing in the short term, it may suppress sector performance emotionally. However, it will take time to reverse the tight supply situation in the industry. If demand for inventory replenishment in winter is effectively released, coal prices are still expected to exceed expectations; at the same time, coal prices rose sharply month-on-month in Q3, and sector performance is expected to improve markedly, providing support for valuations. Based on this judgment, we continue to be optimistic about the sector market under contraction in supply, and we are optimistic about the performance of companies that are undervalued and have good performance.

CITIC Securities's main views are as follows:

In 2026Q3, there was a significant increase in coal prices year over year and month over month.

Due to the intensification of safety monitoring efforts after the mine disaster, domestic coal production experienced a sharp year-on-year decline in the third quarter. Supply contracted significantly, and the average price of various types of coal generally rose in 2026Q3. Among them, the average increase in coal prices in the thermal coal market was about 14% month-on-month, with a year-on-year increase of about 34%. The average price increase of Kengkou thermal coal was higher than that of the port, with increases of 21%/8% respectively; the average price of anthracite rose by about 36% month-on-month, and the average price of anthracite rose by about 36% month-on-month, up about 59% year on year; metallurgical coal prices rose about 23% month-on-month, or nearly 46% year on year.

The net profit of the sample listed companies rose 27% month-on-month in 2026Q3, and reached 42% year-on-year in the first three quarters of 2026.

According to data from the National Bureau of Statistics, the coal mining and washing industry above the national scale achieved a total profit of 294.4 billion yuan in the first 8 months of 2026, an increase of 51.6% over the previous year. The net profit of the mainly tracked coal sample listed companies is expected to increase 42% year-on-year in the first three quarters of 2026, and the net profit for the 2026Q3 single quarter is expected to rise about 27% month-on-month. In terms of sub-sectors, the total net profit of the thermal coal/metallurgical coal/anthracite sub-sectors is expected to increase by about 21%/54%/40%, respectively, in 2026Q3.

2026Q4 fundamental outlook: Although insurance and supply policies are being superimposed, it will take time to reverse the tight supply pattern.

After the disaster in the Shanxi mine in late May this year, safety supervision became stricter, and coal production declined significantly. Raw coal production continued to drop by nearly 7% year on year in September; although insurance policies are currently being superimposed, the country's raw coal production is expected to drop by about 3% year on year in Q4. On the demand side, Q3 demand in major downstream industries is also weakening year on year, but it is expected that Q4 may gradually stabilize year over year; from a month-on-month perspective, demand for electricity and coal also increased significantly due to the peak season. The tight supply situation in the industry will take time to ease, and the average price of coal is expected to continue to rise month-on-month in Q4.

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; superposition of insurance and supply policies and relaxation of safety supervision led 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, etc.