The Zhitong Finance App learned that CICC released a research report saying that China Shenhua (01088,601088.SH)'s third-quarter results were slightly lower than the forecast, mainly due to rising electricity business costs and year-on-year increases in expenses during the period. The bank adjusted the coal price and electricity cost assumptions, kept the 2026 and 2027 profit forecasts unchanged, and maintained the “outperforming industry” ratings for A shares and H shares. The target prices were RMB 51 and HK$51, respectively. According to the bank's forecast, the price-earnings ratio for H shares in 2026 and 2027 will be 15.2 times and 15.1 times, respectively.
China Shenhua's net profit for the third quarter was 15.7 billion yuan and 16.3 billion yuan respectively, up 3.2% and 2.6% year on year, down 13% and 15% month on month, respectively; net profit from A shares to mother after deducting non-recurring profit and loss was 15.9 billion yuan, up 11% year on year and 1.7% month on month.
The bank pointed out that the profits of the company's coal chemical business increased, but profits from the electricity business declined. In the third quarter, the price of self-produced coal rose 10% year on year to 417 yuan per ton. During the same period, the spot price of 5,500 kcal thermal coal in Qinhuangdao rose 31% year on year. The bank believes that the industry's supply and demand will remain tight in the fourth quarter, which will support coal prices to remain high, and the company's coal sales price is expected to continue to rise.
In terms of the electricity business, electricity sales costs rose 24% year on year to RMB 0.341 per kilowatt-hour in the third quarter. Mainly due to rising coal prices driving up fuel costs, we are still facing some cost pressure in the short term.