Morgan Stanley has issued a research report stating that Yankuang Energy (HKG: 01171) expects its first-half 2026 net profit to reach between 5.3 billion and 7.2 billion yuan, representing year-on-year growth of 53% to 72%. This performance aligns with the bank's own forecast of 7.16 billion yuan. Excluding non-recurring items, the first-half recurring profit increased by 2% year-on-year to 4.5 billion yuan. This implies a second-quarter standalone net profit of approximately 3.2 billion yuan, marking a 74% increase compared to the same period last year. Morgan Stanley has reiterated its "Overweight" rating on the stock, maintaining its H-share target price at HK$15.6.
The bank noted that the company's strong first-half performance primarily reflects higher coal prices supported by resilient demand, elevated coal chemical prices influenced by the Middle East conflict, and significant investment gains from the disposal of a 100% equity stake in Inner Mongolia Xintai Coal. Thermal coal prices have recently found short-term support due to potential increases in daily power plant consumption following widespread rainfall and the release of inventory replenishment demand. Concurrently, coking coal prices are also expected to be supported by supply constraints in major coal-producing provinces like Shanxi, following tightened safety inspections due to a late-May mining accident.
The favorable coal pricing environment and robust coal chemical margins are anticipated to continue underpinning Yankuang Energy's resilient earnings performance.
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