YAL has been on a rollercoaster ride in 2026, initially climbing from around $5 in January to above $6 following its FY25 result before surging towards $9 in April as metallurgical coal prices strengthened and speculation around the Kestrel acquisition gathered momentum. The catalyst was confirmed in April when Yancoal agreed to acquire an 80% stake in Queensland’s Kestrel coking coal mine for up to US$2.4bn, materially increasing its exposure to higher-value metallurgical (coking) coal. However, the stock subsequently surrendered most of those gains, as thermal coal prices softened and investors digested the funding and leverage implications of the acquisition.
Again, the picture improved through August, with 1H26 EBITDA rising 29% to A$767m and revenue increasing 13% to A$3.02bn, supported by stronger volumes and realised coal prices. Solid Q2 production, an increased Glencore sales cap and regulatory progress on Kestrel also helped YAL recover to above $6 by month-end.
For MM, the investment case is increasingly about whether Yancoal can successfully execute its strategic shift toward metallurgical coal while maintaining balance-sheet discipline, a similar transition to the one Whitehaven embarked on with its acquisition of Blackwater and Daunia. However, we’ve generally not been a fan of this complex, primarily Chinese-owned dividend play, where strategically anything can happen!
- We can see YAL testing $7 into Christmas, but it’s not a preferred stock for MM.
MM is cautiously bullish towards YAL around $6.20
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