VAT Cut Is a Positive to Chinese Coal Producers; While Our Bearish Coal Price Outlook Remains.
China will lower the value-added tax, or VAT, rates as part of a CNY 2 trillion cost cut package to support the slowing economy and tariff dispute with the U.S. This favors Chinese coal producers, who will enjoy a 3% VAT rate cut to 13% on domestic coal production. We expect the VAT rate cut to boost net profits by 4%-10% for the major coal producers we cover, after taking into account the cost-side VAT rate cuts. Among these, we think China Coal is best positioned to benefit with estimated 8%-1...
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