Zhaojin Wealth News | Zhongyin International issued a research report, believing that the Grosvenor metallurgical coal mine (owned by Anglo American Resources [AALLN, NR]) in Queensland, Australia, which suffered an underground fire at the end of June, will be shut down for several months. The bank calculates that the shutdown will result in a global reduction in coking coal exports of about 0.8%, which may cause coking coal prices to rise and become a catalyst for the rise in Yancoal Aus (03668) stock price.
The bank expects that when some coking coal contracts are repriced in the next few months, the higher spot prices will push up Yancoal's average selling price in 2H24 and 1H25. The bank raised its profit forecast for 2024/25 by 7%/9% mainly due to the bank's upward revision of its average coal price forecast. The bank's target price based on net present value has been raised from HKD 40 to HKD 45. The current stock price is equivalent to a 2024 PE ratio of 6.5 and a dividend yield of 7.7%, and the bank believes that the stock is attractive to investors seeking safety margins and high dividends. Maintain “buy”.