Damo: Yankuang Energy (01171)'s net profit for the first three quarters is expected to remain resilient in the fourth quarter

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Yankuang Energy (01171) expects net profit for the first nine months of 2026 to increase 56% year-on-year to RMB 11.1 billion, which is in line with market expectations. This means that third-quarter earnings will increase 73% year over year and increase 24% to RMB 3.95 billion quarterly, compared with market expectations of 3.8 billion to 4 billion yuan; the bank maintains an “increase in holdings” rating, with a target price of HK$15.9 billion.

The bank pointed out that the year-on-year profit improvement reflected the increase in the prices of coal and coal chemical products in the first nine months, as well as the sale of all shares in Inner Mongolia's Xintai Coal Industry, which brought high investment returns.

The bank expects that Yankuang Energy's profit for the fourth quarter of 2026 will remain resilient: thermal coal prices have recently been supported due to slow production growth in major coal-producing provinces, low coal inventory levels in inland power plants, and demand for stock replenishment before the winter heating season. Similarly, coking coal prices can also benefit from supply restrictions in major coal-producing provinces, such as Shanxi, due to increased safety inspections, and reduced imports from Mongolia. As coal prices improved, coal chemical profits and newly acquired renewable energy businesses performed better.