Shares of SHOUGANG RES (00639) continued their upward momentum, climbing more than 6% during trading. As of the latest update, the stock was up 5.93% to HK$2.77, with a turnover of HK$94.38 million.

The company projected that its net profit attributable to shareholders for the first half of this year would range between approximately HK$550 million and HK$600 million, representing a year-on-year increase of 36% to 49%. According to Guoyuan International, based on the midpoint of this estimate, the first-half earnings would already account for about 91% of the full-year 2025 net profit of HK$632 million.

This strong performance was driven by three key factors: a year-on-year increase of roughly 20% in the market prices of major refined coking coal products during the first half; a 16% rise in the average selling price of self-produced refined coking coal; and a more than 20% increase in sales volume of self-produced refined coking coal, alongside sustained cost-control efforts that contributed positively.

Notably, production resumption in major coal-producing regions like Jinzhong, Luliang, and Linfen in Shanxi Province has remained slow, keeping the supply of high-quality primary coking coal tight. Additionally, two government departments released the "15th Five-Year Plan for the Coal Industry Development" yesterday, aiming to promote high-quality growth in the sector.

Why the rally? Citic Securities noted that in the near term, ongoing safety supervision at mines continues to affect production schedules, leading to relatively more pronounced supply constraints for coking coal. Combined with steady demand for thermal coal during the peak summer season, coal prices and the sector still have a foundation for staged performance.