Yancoal’s (YAL) 3Q25 attributable production/ sales volume -9%/+3% YoY. Thedecline in production was due to rainfall, while the increase in sales volume wasdue to the improvement of previous shipping delays. Blended ASP dropped 18%YoY in 3Q25, largely in-line with market trend. We estimate Yancoal deliveredrevenue of ~A$1.48bn in 3Q25 (-17% YoY; +30% QoQ). Our 2025E/26E/27Eearnings forecasts are revised down by 54%/49%/40%, largely due to lowerassumptions on both thermal and metallurgical coal ASP but slightly offset by a2% increase in volume forecast due to an increase in equity interest (3.75%) inMoolarben mines. While we see a lack of near-term catalysts due to the sluggishcoal prices, we still maintain a BUY rating due to YAL’s healthy balance sheetand consistent dividend policy (50% of after tax profit or free cash flow,whichever is higher). Our NPV-based TP is revised down by ~9% to HK$31(from HK$34), after (1) incorporating our new earnings forecast and (2) rollingover our valuation base to 2026E.
　　Attributable sales volume +3% YoY in 3Q25: Attributable sales volume ofthermal coal/ metallurgical coal was flat /+14% YoY to 9mn/1.6mn tonnes in3Q25. On the production side, the total attributable volume dropped 9% YoYto 9.3mn tonnes in 3Q25. In 9M25, the total attributable production volumegrew 4% YoY to 28.2mn tonnes, which accounted for 72-80% of YAL’s fullyearguidance (35-39mn tonnes).
　　ASP breakdown in 3Q25. Thermal ASP dropped 17% YoY to A$130/t in3Q25, within the range of GCNewc 6,000kCal (A$165/t or US$109/t) andAPI5 (A$105/t or US$69/t). Metallurgical ASP dropped 25% YoY to A$195/t,within the range of the market price of Low Vol PCI and semi-soft.
　　Healthy cash position. As at Sep 2025, Yancoal had gross cash ofA$1.8bn, equivalent to ~24% of the current market cap.
　　2025 full-year guidance unchanged: (1) attributable saleable production:35-39mn tonnes (-5% to +6% YoY); (2) operating cash cost (excludingroyalties): A$89-97/t (-4% to +4% YoY); (3) capex: A$750-900mn (up 6%-28% YoY).
　　Key risks: (1) further decline in coal price; (2) elevated unit cost; (3)extreme weather that affects production and delivery.