JPMorgan has released a research report noting that mainland China's thermal coal prices have climbed 14% since the start of the third quarter, while coal stocks have rallied between 16% and 22% during the same period. The market is now anticipating a "higher for longer" coal price environment, and the bank believes there are still upside risks to near-term coal prices, driven by constrained domestic supply and restocking demand. As a result, JPMorgan has raised its 2026 thermal coal price forecast from RMB 805 per tonne to RMB 830 per tonne.

Factoring in higher unit costs, the bank has adjusted its 2026-2028 earnings forecasts for China Shenhua (01088) and Yankuang Energy (01171), with revisions ranging from a 2% downgrade to a 4% upgrade. JPMorgan has also lifted its A-share target price for China Shenhua (601088.SH) from RMB 45 to RMB 47, and its H-share target price from HK$44.5 to HK$46, while maintaining a "Neutral" rating.

For Yankuang Energy (600188.SH), the A-share target price has been increased from RMB 20 to RMB 22, while the H-share target price remains unchanged at HK$12.5, with the "Neutral" rating also kept in place. The bank expresses a short-term preference for Yankuang Energy, citing its higher coking coal exposure and favorable contract portfolio. Although dividend yields of 6% to 7% among coal stocks appear attractive, JPMorgan cautions that these high yields may not be sustainable, as supply constraints could prove to be short-lived.