Coal equities rebound this morning, backed by China’s sign to pace down energy price intervention.
In the morning session of Tuesday, November 4, 2021, the share price of Banpu Public Company Limited (BANPU) rose ฿0.10/share or 0.93% to ฿10.80/share, with a trading value of 866 million baht.
The share price of the Lanna Resources Public Company Limited (LANNA) rose ฿0.10/share or 0.57% to ฿17.70/share, with a trading value of 97 million baht.
The share price of Asia Green Energy Public Company Limited (AGE) rose ฿0.08/share or 2.94% to ฿2.80/share, with a trading value of 11 million baht.
China’s National Development and Reform Commission said on Wednesday (November3) during a meeting with miners and power plants that coal prices have fallen too swiftly recently and that the current price level has a limited downside.
Additionally, the NDRC considers that long-term coal prices should remain reasonable, urging power plants and coal producers to hold 100% of their coal under long-term contracts to avoid major price fluctuations.
KTBST Securities (KTBST) has a positive view on the announcement. This could imply that the present coal price (around USD140/ton – USD150/ton based on the Newcastle Exports Index (NEX)) is reasonable and reflects winter demand/supply trends. Yesterday, the NEX coal price closed at USD157.5/ton (+12%).
KTBST recommends “BUY” on BANPU with a target price of 15 baht, citing a rebound in China’s coal prices following government signals indicating a slowing down of the price increase. BANPU’s earnings are predicted to be 10.9 billion baht and 13 billion baht in 2022 and 2022, respectively.