Coal sector hits record high, is it a buy now?

time:2023-01-28 07:06:39 source:clevelanddrifters.com author:Garbage
Coal sector hits record high, is it a buy now?

Today's market coal sector led the gains and hit a record high for the coal index in one fell swoop. In contrast, the new energy sector was sluggish throughout the day. This can't help but make some investors have the question: "How strong is the coal trend, can you buy the coal sector now?" Recently, someone commented on my article and said: "Your bearish view of coal is wrong, and the trend of coal is very strong. Okay." I didn't bother to explain it. In order to let friends have a deeper understanding of the coal industry today, I will talk about my views on the coal industry in depth today. I am bearish on the coal industry mainly for the following three reasons: 1. Coal is a cyclical industry and a mature industry. This is doomed that this industry will not grow very well. Taking Yankuang Energy as an example, its stock price has hit a record high, but its price-earnings ratio is only 12 times! Why is its P/E ratio so low? This is because of the nature of its industry. The performance of listed companies in cyclical industries is generally unstable, showing ups and downs in performance fluctuations. Therefore, the market values ​​cyclical industries such as coal, oil, and steel very low. The coal industry seems to have been very strong in the past two years, but if the time is extended to 20 years, it will be found that the coal industry is very bearish from the perspective of long-term investment. The coal index seems to have only risen six or seven times in 20 years. I can't remember the exact number. The consumer industry index has risen at least a dozen times in the past 20 years, and liquor has risen dozens of times. The consumer industry is the most suitable sector for long-term holdings in all industries. A cyclical industry sector such as coal seems to be very strong in the short and medium term, but in fact it is not a rival to the consumer industry in the long run. my country's coal industry has entered a mature period of industry development, and the growth rate of listed companies' performance has begun to decline. Many coal companies have basically stopped industrial expansion or even started to shrink their business. This industry is already in a state of middle-aged and elderly people. Taking Yankuang Energy as an example, it seems that the price-earnings ratio is only 12 times now, but now it may be its peak period of cyclical prosperity and high stock price. The investment rule of cyclical stocks is "buy when the price-earnings ratio is high and sell when the price-earnings ratio is low." That is, buy when the industry is at a trough and sell when the industry is at its peak. Now, of course, is the peak period of the coal industry, and the coal industry may enter a trough at any time. The electrocardiographic trend (ups and downs) of the coal industry is not suitable for long-term holding. It is very difficult to play the difference, and it is not suitable for ordinary investors to invest. 2 There are special background reasons for the surge in the coal sector in the past two years, and there are certain accidental and unexpected factors. The first is that the currency of the United States released water in the past two years, leading to global commodity inflation. Coal and oil, as commodities, will of course rise in price. (The more money, the more valuable things will be.) In addition, the Russian-Ukrainian war has led to the tight supply of oil and natural gas in Europe, the shortage of coal, and the global high temperature this year, which also makes the world's power supply tight. Coal power generation is still the main method of power generation in the world, which intensifies the market demand for coal, and the price of coal continues to rise. Coal is so hot right now, but let's be careful - can it last for a long time? U.S. interest rate hikes have contracted the currency, which is the main force behind the decline in coal prices. Can the Russian-Ukrainian war continue all year round? Will the world have such abnormally high temperatures next year as this year? When these factors that cause coal to rise slowly disappear, it will be difficult for coal to maintain its current high price. The collapse of coal from a high level is a high probability event. 3 Substitute role of new energy Some listed companies in the A-share market have begun to replace coal. For example, Conch Cement, a leading company in the cement industry, has started to build photovoltaics to replace the coal used every day. Wanhua Chemical, a leading company in the chemical industry, has also entered photovoltaic power generation to replace the use of coal. Some companies have also begun to announce that they have begun to build photovoltaic power plants. The reason is that under the background of the global pursuit of carbon neutrality, all walks of life have begun to pay attention to environmental protection and carbon emissions, and the replacement of traditional oil and coal by new energy sources is the general trend. Although oil and coal are still the main energy supplies in the world at present, with the technological progress of new energy, people's dependence on oil and coal will become lower and lower. The proportion of coal in the world's energy will only get lower and lower, and the proportion of new energy in the world's energy demand can only get higher and higher. In a few decades, more than 60% of the world's energy may be new energy, and coal and oil may only be backup energy. Therefore, it can be seen from the above three points that if we do long-term value investment, then investing in coal does not make much sense. New energy or consumer industries are the best targets for long-term investment.

(Responsible editor:Hot industry)

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