Guotai Haitong: Allocation in individual coal stocks is significantly diverging; maintain "Overweight" rating on the sector.

Guotai Haitong released a research report stating that, according to fund 2026 Q3 reports, the proportion of coal sector holdings among the top ten fund heavy positions rebounded quarter-on-quarter, while allocation across individual stocks diverged significantly; Shanghai/Shenzhen Stock Connect and Hong Kong Stock Connect showed divergent increases and decreases. The industry rating of "Overweight" is maintained. Looking ahead to Q4, with the phased release of winter storage and restocking demand in northern China, as well as the gradual advancement of coal mine resumption and production increases, the core contradiction in the coal market is shifting from the earlier supply contraction to a game between supply recovery and demand absorption. The bank believes that subsequent focus should be on the actual progress of policy-driven production increases and supply guarantees, as well as the quality of winter demand. Guotai Haitong's main views are as follows: Maintain the industry rating of "Overweight" Q3 market performance was realized as expected; in Q4, focus on the game between supply recovery and demand absorption. The inflection point in the coal sector previously judged by the bank was realized as expected in Q3, and the sector entered a main upward wave. The core reason was that the market gradually recognized a substantive contraction on the supply side, and tight supply and demand pushed coal prices to continue strengthening and hit a new high since 2024. Entering Q4, as coal prices rose rapidly, policy efforts to stabilize production and guarantee supply continued to intensify, successively promoting Xinjiang coal outward transport, temporary suspension of production at coal mines being resumed to reach production, and Shanxi's production increase and supply guarantee. The supply side has seen marginal recovery, and the moment of greatest supply-demand pressure has passed. Looking ahead to Q4, with the phased release of winter storage and restocking demand in northern China, as well as the gradual advancement of coal mine resumption and production increases, the core contradiction in the coal market is shifting from the earlier supply contraction to a game between supply recovery and demand absorption. The bank believes that subsequent focus should be on the actual progress of policy-driven production increases and supply guarantees, as well as the quality of winter demand. In terms of investment recommendations, continue to recommend Shaanxi Coal Industry, Yankuang Energy Group, China Shenhua Energy, and China Coal Energy; in the coking coal sector, recommend Huaibei Mining Holdings and Pingdingshan Tianan Coal. MiningCo.,Ltd. In 2026Q3, the proportion of public fund heavy positions in coal rebounded, while allocation across individual stocks diverged significantly In Q3, the coal index rose 19.29%, while the CSI 300 fell 12.49% over the same period, with the sector outperforming by 31.78%; in 2026Q3, public funds heavily held a total of 26 coal stocks. The top ten coal heavy positions as a proportion of fund stock investment market value rose from 0.31% in 2026Q2 to 0.46%, up 0.15% quarter-on-quarter. The top five coal heavy positions were China Shenhua Energy, Yankuang Energy Group, Shaanxi Coal Industry, Shanxi Lu'an Environmental Energy Dev.Co.,Ltd, and China Coal Xinji Energy, with fund holdings as a proportion of tradable shares at 0.87%, 5.64%, 2.25%, 7.93%, and 12.03%, respectively. Measured by quarter-on-quarter changes (fund heavy-position shares as a proportion of tradable shares at the end of 2026Q3 versus the end of 2026Q2), the top five companies by increase were China Coal Xinji Energy, Yankuang Energy Group, Shanxi Lanhua Sci-Tech Venture, Beijing Haohua Energy Resource, and Yunnan Coal & Energy, with holdings as a proportion of tradable shares increasing by 3.11, 1.93, 1.26, 1.01, and 0.76 percentage points, respectively; the top five companies by decrease were Jizhong Energy Resources, Pingdingshan Tianan Coal. MiningCo.,Ltd., Jiangxi Tungsten Rare and Precious Equipment, Anhui Hengyuan Coal Industry and Electricity Power, and Jinneng Holding Shanxi Coal Industry, decreasing by 3.27, 1.94, 1.63, 1.23, and 1.17 percentage points, respectively. In Q3, fund allocation showed clear divergence: China Coal Xinji Energy and Yankuang Energy Group received increases, while Jizhong Energy Resources and Pingdingshan Tianan Coal. MiningCo.,Ltd. saw decreases; Shanghai/Shenzhen Stock Connect concentrated increases in 2026Q3 in Anhui Hengyuan Coal Industry and Electricity Power, Shanghai Datun Energy Resources, Sundiro Holding, Shanxi Lanhua Sci-Tech Venture, and Jizhong Energy Resources, with their proportions of total share capital increasing by 2.73%, 1.46%, 0.95%, 0.90%, and 0.79%, respectively; decreases were concentrated in Beijing Haohua Energy Resource, Jinneng Holding Shanxi Coal Industry, China Coal Xinji Energy, Jiangxi Tungsten Rare and Precious Equipment, and Liaoning Energy Industry, with their proportions of total share capital decreasing by 1.68%, 1.00%, 0.71%, 0.69%, and 0.32%, respectively. At period-end, Shanghai/Shenzhen Stock Connect holdings were concentrated in Anhui Hengyuan Coal Industry and Electricity Power, Shanxi Coal International Energy Group, Shanghai Datun Energy Resources, Shaanxi Coal Industry, and Shanxi Lanhua Sci-Tech Venture, accounting for 5.11%, 2.30%, 2.20%, 1.73%, and 1.68% of total share capital, respectively; at the end of 2026Q3, Hong Kong Stock Connect holdings were concentrated in Yankuang Energy Group, China Coal Energy, PER ENERGY, SHOUGANG RES, and China Shenhua Energy, accounting for 19.42%, 12.81%, 11.79%, 11.50%, and 10.84% of total share capital, respectively. Risk warning: macroeconomic growth weaker than expected, large-scale entry of imported coal, and supply release exceeding expectations.