Event: on April 21, 2022, the company released quarterly reports for 2021 and 2022. The net profit attributed to the owner of the parent company in 2021 was 305 million yuan, an increase of 144.36% over the same period last year. The net profit attributed to the owner of the parent company in the first quarter was 272 million yuan, an increase of 168.34% over the same period last year.
The volume and price of coalbed methane business has risen, prompting the company to release its performance in 2021. Increase market development efforts to ensure that coalbed methane should be sold out, and achieve coalbed methane sales of 1.099 billion cubic meters in 2021, an increase of 20.5% over the same period last year, promoting the steady improvement of the company's economic benefits. The sales revenue per unit of coalbed methane was 1.78 yuan per cubic meter, an increase of 14.5% over the same period last year. The unit cost was 1.22 yuan per cubic meter, an increase of 1.4% over the same period last year. Benefiting from cost control and rising prices, the company's coalbed methane mining business achieved a gross profit margin of 336.86%, an increase of 8.16 percentage points over the same period last year.
Subsidies have greatly increased and 22Q1's performance has exceeded expectations. While the company focuses on the development of the main industry, takes many measures to deeply tap the production potential, strengthens the market development, and achieves a steady increase in the unit price, sales volume and sales income of coalbed methane in the first quarter, the company confirms that the subsidy for coalbed methane is 176 million yuan, an increase of about 172 million over the same period last year. After deducting subsidies, the company's profit is 96 million yuan, which is basically the same as the profit after deducting subsidies in the same period last year.
With abundant reserves, the production of coalbed methane is expected to continue. The company is rich in coalbed methane resources, and continues to increase:
In 2021, the company won 5 coalbed methane exploration rights, and currently holds 22 coalbed methane mining rights, with a total area of 2680 square kilometers. The opening up of new blocks can speed up the pace of increasing reserves and production, and help to enhance the competitiveness and sustainable development ability of the company's coalbed methane industry.
With the rise in oil and gas prices, the company's comprehensive price is expected to rise. Under the influence of strong overseas demand and the repeated situation in Russia and Ukraine, overseas oil and gas prices have risen sharply. According to wind, the average price of 22Q1 Brent crude oil rose 65.26% year on year to $100.87 per barrel, while the average 22Q1 price of NYMEX natural gas was $4.57 per million British thermal units, an increase of 67.91% over the same period last year. Driven by overseas prices, domestic LNG prices have also risen sharply. According to Wind data, LNG prices in Jincheng, Shanxi Province, where 22Q1 is located, rose 73.62% year on year. As a result, the company's comprehensive price is expected to rise.
Driven by the goal of "double carbon", it is of great significance to vigorously develop the coalbed methane industry. Coalbed methane contains 21 times as much methane as carbon dioxide, and every 100m cubic meter reduction in methane emissions is equivalent to 1.5 million tons of carbon dioxide reduction. Large-scale surface extraction uses coalbed methane to control coal mine gas, which can not only reduce the release of methane during coal mining, but also develop and utilize the gas in coal mine goaf and abandoned mine, and reduce the destruction of methane escape to the ozone layer. At the same time, using low emission intensity energy instead of high emission intensity energy is an effective way to achieve carbon neutralization, and the carbon emission intensity of coalbed methane is lower than that of coal and petroleum. Its large-scale extraction and utilization will play an important role in the process of realizing the "double carbon goal" in our country.
Investment suggestion: we estimate that the return net profit of the company from 2022 to 2024 will be 738max 980max 1.099 million yuan, the corresponding EPS is 0.76Universe 1.14, and the corresponding PE on April 21, 2022 is 15, 11 and 10 times, respectively. Maintain the recommended rating.
Risk hints: the risk of slow exploration and mining of new mines; the risk of falling coalbed methane prices; the risk of insufficient policy support.