China Shenhua Energy (01088) rose more than 3%, and as of press time was up 2.33% at HK$42.18, with turnover of HK$177 million.
On the news front, China Shenhua Energy recently disclosed its third-quarter results. Great Wall Securities noted that the company's third-quarter revenue was RMB 106.69 billion, down 10.3% quarter-on-quarter, while net profit attributable to shareholders was RMB 15.69 billion, down 13.1% quarter-on-quarter. The brokerage judged that the decline in self-produced coal output and sales offset the contribution from higher coal prices, which may be related to stricter safety supervision in the third quarter after a mine accident. Third-quarter investment income was RMB 664 million, down 46.5% quarter-on-quarter, as reduced returns from power plants jointly invested with GD Power dragged on profit. Looking ahead to the fourth quarter, the brokerage believes supply guarantees are expected to drive a recovery in coal production and sales, while winter stockpiling is likely to support an upward shift in the coal price center, with quarterly net profit attributable to shareholders expected to rebound.
Morgan Stanley said in a research report that China Shenhua Energy's net profit for the first nine months of the year rose 4% year-on-year to RMB 44 billion, implying third-quarter net profit rose 3% year-on-year to RMB 15.7 billion, broadly in line with market expectations. The bank expects the company's fourth-quarter earnings to remain resilient. Resumption of production at Shanxi coal mines is still progressing, but overall progress is slow due to continued strict safety inspections and a shift in the mindset of coal mining companies. In addition, restocking demand before winter heating and low power plant inventories are expected to keep thermal coal prices fluctuating at high levels in the near term, implying resilient earnings for China Shenhua Energy through the end of the year.
Comments