Yanzhou Coal Mining (1171): Set to benefit from domestic shortage

China Electricity Council said this year could be the most tightened one for the Chinese coal market since 2016.

Uptrend 2

China Electricity Council said China's north east region may be facing a 37 million tons thermal coal shortage, and this year could be the most tightened one for the coal market since 2016.

Yanzhou Coal Mining (1171.hk), a major Chinese coal producer, reported last month that 3Q saleable coal production increased 20.0% on year to 26.86 million tons, up from 8.8% in 2Q and 4.4% in 1Q. It is worth to notice that sales volume rose 26.1% to 36.19 million tons, the third consecutive quarter that sales growth has exceeded 20.0%, suggesting robust demand.


The company said last month that it plans to increase its 2020-2024 cash dividend ratio, with total cash dividends in each fiscal year accounting for approximately 50% of its net profit for the year after deducting statutory reserves, and the cash dividend per share shall not be less than 0.50 yuan (nearly 10% dividend yield at current share price level).

From a technical point of view, Yanzhou Coal Mining (1171.hk) is gathering more upside momentum as shown on the daily chart. It has broken above a bearish channel drawn from July, while the 20-day moving average has crossed above the 50-day one. The level at $5.70 might be considered as the nearest support, while the 1st and 2nd resistance are expected to be located at $6.55 and $7.00 respectively.



Source: GAIN Capital, TradingView

More from Stocks

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.