This week's Xinjiang index was 101.5, +0.75% month-on-month; Xinjiang coal chemical investment index was 99.55, -1.03% month-on-month; The Xinjiang state-owned enterprise reform index was 105.8, +2.6% month-on-month. The top three companies that rose this week: Li New Energy (001258. SZ) rose 28.64%, and Tianshun shares (002800. SZ) rose 13.25%, while Western Gold (601069. SH) up 11.37%; Top three decliners this week: Daqo Energy (688303. SH) fell -5.61%, Hubei Yihua (000422. SZ) fell -6.47%, and Alloy Investment (000633. SZ) fell -11.15%. This week's rise in new energy is mainly driven by the rise of wind power concepts; Alloy investment is mainly due to a pullback after last week's surge, and Hubei Yihua is mainly due to lower than expected performance.

This week, the United States announced the establishment of a "minimum benchmark tariff" of 10% for trading partners and higher tariffs on trading partners, including China, followed by domestic countermeasures, announcing an additional 34% tariff on all imports of United States origin (note: in 2024, China will import 9.6397 million tons of crude oil from the United States, and 4.1584 million tons of natural gas alone). Looking ahead, it is expected that domestic demand and infrastructure stimulus policies will be introduced in the case of a high probability of decline in external demand, while the uncertainty of the international situation will once again increase the urgency of domestic energy independence and control. Under the current international situation, it may be possible to achieve the following at the same time: 1) coal-to-oil and gas to achieve import energy substitution; 2) large-scale infrastructure investment to stimulate domestic demand; 3) The trend of Xinjiang's coal chemical industry, which has multiple goals such as the Belt and Road Initiative, is expected to enter an accelerated stage, and it is recommended to pay attention to it.

TBEA: Tianchi Energy Co., Ltd., a holding subsidiary of the company, invested in the construction of a 2 billion Nm3/year coal-to-natural gas project in Zhundong with its wholly-owned subsidiary, Zhunneng Chemical Company, with a total investment of 17.04 billion yuan. Internal calculations show that based on the coal price of 150-160 yuan/ton (including tax, 150 yuan/ton for fuel coal and 160 yuan/ton for raw coal) and the SNG price of 2.75 yuan/standard square, the project can achieve a total annual profit of 2.05 billion yuan.

Recently, Xinjiang Shanneng Chemical Co., Ltd. Zhundong Wucaiwan 800,000 tons/year coal-to-olefins project overall design and gasification process package held a kick-off meeting. The meeting brought together more than 100 technical experts and management personnel to carry out in-depth discussions on the project construction plan, marking the official entry of this key project into the substantive construction stage; Announcement of the results of the public bidding for the overall design and basic engineering design of the coal gasification unit of the Zhundong 2 billion cubic meters/year coal-to-natural gas project of Guoneng Xinjiang Coal-to-Gas Co., Ltd., the winning bidder: Saiding Engineering Co., Ltd., the winning bid amount: 13.98 million yuan.

The key prices in Xinjiang this week are: according to the data of Xinjiang Coal Trading Center, the price of Q5000 blended coal in Qitai County is 140 yuan/ton, the price of Balikun blended coal Q5200 is 225 yuan/ton, and the price of main coking coal (A14, S0.9, M4, FC63, V22, G95) in Baicheng is 850 yuan/ton, which is flat from the previous month; The price of Balikun Santang Lake - Ningxia Baofeng was 290 yuan/ton, flat month-on-month; This week, the price of methanol in Xinjiang was 1708 yuan/ton, and the price difference with East China was -890 yuan/ton; This week, the price of urea in Xinjiang was 1645 yuan/ton, and the price difference with Shandong was -305 yuan/ton. In February 2025, Xinjiang's coal railway shipments: 3.48 million tons of state-owned key coal mines, a year-on-year increase of -7.45%; In December 2024, Xinjiang's raw coal output was 58.22 million tons, +18.24% year-on-year.

Energy security + cost advantage, Xinjiang coal chemical industry is expected to open a golden age. From the perspective of national strategy, Xinjiang has benefited from two major shifts: from the coastal economy to the Belt and Road Initiative, Xinjiang has changed from a geopolitical rear to a frontier gateway, occupying a geographical advantage. The balance of energy security and dual carbon environmental protection has begun to tilt to the left, the king of coal chemical industry has returned, and Xinjiang has become the center of gravity of energy security by relying on resource advantages. From the perspective of Xinjiang itself, promoting stability through development has become the main line of Xinjiang. Historically, Xinjiang's background has been balanced between development and stability, and Xinjiang is currently in a period of important strategic opportunities for high-quality development. The development of Xinjiang's coal chemical industry is similar to that of shale gas in the United States, that is, it requires the state to invest in underlying technologies and infrastructure over a long period of time, and ultimately overcome its dependence on foreign energy sources. In recent years, with the expansion of the Xinjiang Coal Export Railway, the establishment of the National Pipeline Network Group and the completion of the West-East Gas Pipeline, the laying of the Xinjiang Electric Power Transmission Ultra-High Pressure Pipe Gallery, and the subsequent landing of liquid pipelines, Xinjiang coal, coal-to-gas, coal-to-liquid, and even coal-to-methanol are about to begin to flow to the whole country, which is China's version of the "Energy Independence Plan", and the long-term outlook is not only expected to reduce China's energy import dependence, but also systematically reduce China's energy and manufacturing costs. Recently, we have observed that the approval and commencement of relevant projects in Xinjiang have accelerated, which is expected to be a catalyst to promote the pace of investment in Xinjiang's coal chemical industry-related targets.

The reform of state-owned enterprises in Xinjiang is accelerating. Promoting stability through development has become the background color of Xinjiang, and Xinjiang's state-owned enterprises are not only the beneficiaries of Xinjiang's great development, but also the beneficiaries of business restructuring and management optimization. In the future, Xinjiang state-owned assets and the Xinjiang Corps will carry out business integration along the layout of Xinjiang's ten major industries, and securitization platform will also take place, and there is great room for asset integration and management optimization. The recent change of the actual controller of Western Regions Tourism, the acquisition of Baodi Mining, and the backdoor of Zhongji Health may mean the acceleration of the reform of state-owned enterprises in Xinjiang. It is necessary to focus on local state-owned enterprises in Xinjiang that are backed by Xinjiang's superior resources.

It is recommended to pay attention to the two main lines of coal chemical investment and state-owned enterprise reform: 1) project investment in Xinjiang, including energy and chemical companies with coal mines and conversion in Xinjiang: TBEA, Baofeng Energy, Guanghui Energy, Hubei Yihua, Zhongji Health, etc.; 2) Water sellers who provide services for coal chemical projects, including Xuefeng Technology, Guangdong Hongda, YIPLI, and companies that provide coal transportation services along with coal mining; 3) Shovel stocks that provide services for coal chemical construction, including coal chemical design, general contracting, construction, and equipment: Donghua Technology, Sinopec Refining & Chemical Engineering, 3D Chemical, China Chemical, Aerospace Engineering, Zhongtai Co., Ltd., Fortune, etc.; 4) Xinjiang's local state-owned enterprises/XPCC enterprises are expected to usher in opportunities for deepening reform and development: Lixin Energy, Qingsong Jianhua, Tianfu Energy, Baodi Mining, Xinjiang Tianye, etc.

Risk warning: the policy implementation is less than expected; The construction progress of the project is not as expected; uncertainty in the progress of mergers and acquisitions; There is an error in the project data statistics.