The 2026 coal market experienced an impressive round of revaluation in the third quarter. The price of 5,500 kcal thermal coal in Qinhuangdao rose moderately at the beginning of the year to an average price of 882 yuan/ton in the third quarter, an increase of more than 30% over the previous year. After entering October, it once broke through the 1,000 yuan mark. Under this background of the industry, Yankuang Energy (01171) handed over its three-quarter report.
The Zhitong Finance App notes that in the first three quarters, the company achieved operating income of 117.504 billion yuan (RMB, same below), up 11.33% year on year; net profit attributable to shareholders of listed companies was 11.117 billion yuan, up 55.95% year on year; after deducting non-net profit of 8.544 billion yuan, up 31.07% year on year, with basic earnings per share of 1.11 yuan. Among them, net profit for the third quarter was 3,968 billion yuan in a single quarter, a significant increase of 73.28% over the previous year. The profit growth rate is significantly higher than the revenue growth rate, indicating that this is not a simple large-scale expansion, but high-quality growth brought about by the restoration of profitability. The coal sector is the core driving force of this round of results.
Prices rose and costs fell, and gross profit in the coal sector rose significantly
From an industry perspective, the root cause of this round of price increases is the superposition of multiple supply-side constraints.
On the domestic side, the impact of safety supervision on major production areas continued from the beginning of the year to the end of the year. Coal mine production tends to be cautious. The annual approved production capacity restrictions and the limited capacity of the Jiangmei outbound railway channel combined to limit the increase in supply. On the import side, the low water level of Indonesian rivers restricts barge transportation. The delivery cost of some imported coal is inverted with the selling price, and the supplemental role of importers is greatly reduced. The direct result of the contraction in supply is a systematic rise in the price center, but the price increase is not evenly distributed: coking coal is more marketable and more sensitive to changes in supply. The main coking coal price in Jingtang Port remained in the high range of 2,430 yuan/ton in the third quarter. The average price increase over the same period was about 58% year-on-year, which is significantly stronger than the increase of about 30% of coal power. This “strong, dynamic and weak” structural characteristic for Yankuang Energy, which mainly has thermal coal assets, forms the value of optimizing the coal type structure after Kestrel delivery.
According to the Zhitong Finance App, the gold content of Yankuang Energy's report card is first reflected in the volume-price game of the main coal industry.
On the production side, the company continued the production capacity layout of “stabilizing within the province, expanding outside the province, and improving overseas”. Commercial coal production in the first three quarters was 131.791 million tons, a year-on-year decrease of 3.02%. Although it has declined somewhat, it is still at a high level in the same period in history. What is more noteworthy is the sales side: commercial coal sales during the same period were 126.03 million tons, down only 0.32% year on year, and the decline was significantly less than the decline in production. Production has shrunk and sales have basically stabilized, indicating that the company has reduced the impact of stricter safety inspections on the revenue side to a low level through inventory adjustments and trade coal supplementation, and has also provided a solid sales base for profit realization.
The flexibility on the price side comes from both structural and operational support. The company's comprehensive Changxie coal accounts for a relatively low share and a high proportion of spot sales, and can more fully realize the dividends of price increases in the upward cycle of domestic and foreign coal prices; at the same time, it has grasped the market market window through refined marketing methods such as leading increases and decreases, competitive sales, and refining coal efficiency. As reflected in the results, the overall average price of coal production rose 16.8% year on year to 587.8 yuan/ton, and the coal and ancillary industries achieved net profit of 9.96 billion yuan to mother, which became the core support for the performance.
The cost-side improvements are also worth watching closely. Faced with the pressure of a rigid rise in the prices of factors such as diesel and labor in Australia, the company hedged the increase in expenditure through centralized procurement, efficiency improvements for controllers, and assessment restrictions. The sales cost of tons of coal in the third quarter fell to 332.7 yuan/ton, down 5.7% from month to month, and the cost of self-produced coal decreased by 2.6% year on year and 9.0% month on month. The rise in sales prices and the decline in costs have formed a “scissor gap”, directly expanding the gross profit space of tons of coal. This is also the direct reason why the gross profit growth rate of the coal sector has increased and the profit growth rate far exceeds the revenue growth rate.
This kind of “price increase” and “cost reduction” occurred simultaneously, so that the profit quality of the coal sector did not simply depend on the unilateral rise in market coal prices, but was compounded by actual improvements in internal operating efficiency. The financial structure was also being optimized simultaneously: by the end of the third quarter, the balance ratio fell to 60.8%, down 1.5 percentage points from the beginning of the year; net cash flow from operating activities was 25.486 billion yuan, up 29.76% year on year. The cash flow growth rate basically matched the profit growth rate, indicating that the cash content of profits was solid.
Looking at the business structure, the chemical and power sectors are divided. The comprehensive price of chemical products in the first three quarters was 3,180 yuan/ton, up 10.5% year on year, and the price side continued to improve. The average electricity sales price in the electricity sector was 0.36 yuan/kilowatt-hour, down 6% year on year. Against the backdrop of rising coal prices driving up fuel costs, the profit margin of the power business was squeezed to a certain extent. This differentiation does not change the overall pattern of underpinning the main coal industry, but it also suggests that the hedging effect of coal-electricity integration in the upward cycle of coal prices still needs time to be verified.
The Kestrel coal mine completed delivery, and both coal types and production were upgraded
If the results of the three-quarter report are now in the bag, then the delivery of Kestrel Coal Mine is clearly visible in the future. On October 1, 2026, Yancoal Australia completed the transfer of 100% interest in Kestrel Group and indirectly obtained 80% of Kestrel Coal Mine. The down payment of US$1.85 billion in cash consideration has been paid to the counterparty's designated account. Yancoal Australia confirmed its share of Kestrel coal mine production and economic benefits from the delivery date. This point coincides with the end of the three-quarter report reporting period, which means that Kestrel's contribution has not yet entered any page of the previous three quarters, but will be fully presented in the fourth quarter and 2027 results.
The weight of the Kestrel coal mine is not simply a combination of production. This mine, located in the Bowen Basin in Queensland, is one of Australia's largest producing well metallurgical coal mines. It mainly produces high-quality hard coking coal. The company announcement made it clear that the Kestrel Coal Mine will contribute high-quality metallurgical coal to help Yancoal Australia expand its scale and strengthen its diversified layout. Yankuang's previous coal assets were dominated by thermal coal, and the price cycle exposure was relatively single; after Kestrel's hard coking coal assets were injected, the weight of metallurgical coal in the overall product portfolio increased. In connection with the price structure described above — coking coal is more elastic than thermal coal during the year — Kestrel brought not only a quantitative increase, but also a structural upgrade in price elasticity. At the same time, the company's reserve project is not limited to Kestrel. New mines such as Wucaiwan No. 4 and the oil house are continuing to be built, which will hedge the impact of safety supervision and support the release of medium- to long-term production capacity.
Summarize
Looking at the three-quarter report in parallel with Kestrel's delivery, Yankuang Energy's current picture is clear: profit growth in the first three quarters verified the company's ability to deliver on profits as a leading thermal coal company in the upward cycle of coal prices, while Kestrel's consolidated statement injected quantifiable and traceable epitaxial increases into the fourth quarter and beyond.
There are certainly variables in the persistence of high coal prices. At the end of October, thermal coal prices have declined slightly, and the coking coal market has also entered weak turbulence, and the short-term supply and demand game continues. However, even if the price center falls moderately from current levels, improvements in production and coal structure brought about by Kestrel will still form an independent source of growth, and the company's established tradition of high dividends provides another layer of safety cushion for valuation. In this sense, Yankuang Energy's point of view in the fourth quarter of 2026 is no longer just “how much more can coal prices rise”, but “whether the two lines of coal prices and mergers and acquisitions can resonate.” Judging from the profit cashing in the three-quarter report and the timely implementation of Kestrel's delivery, the answer is biased towards the positive side.