Event: on April 25, 2022, the company released its annual report of 2021 and quarterly report of 2022. The net profit of the company in 2021 was 1.26 billion yuan, an increase of 14.86% over the same period last year. In the first quarter of 2022, the company realized a net profit of 540 million yuan, an increase of 19.68% over the same period last year.
Impairment affects the release of 21Q4 performance. According to the announcement, the net profit of 2021Q4 is-586 million yuan, and the change from positive to negative is mainly due to the impairment of about 850 million yuan from the holding subsidiary Feihong Chemical (equity 75.03%). The provision of asset impairment affects the release of the company's performance.
China Coal Huajin contributed considerable investment income. In 2021, the company confirmed that the investment income of China Coal Huajin was 1.862 billion yuan, an increase of 282 million yuan, or 17.85%, compared with 1.58 billion yuan in 2020. The net income of the company's investment in the first quarter of 2022 was 620 million yuan, an increase of 99.3% over the same period last year.
The cost rises obviously, the coke gross profit margin drops. In 2021, coke production for the whole year was 3.4644 million tons, an increase of 3.87 percent over the same period last year; sales volume was 3.4632 million tons, an increase of 3.43 percent over the same period last year. The average price of coke sales for the whole year was 2524.57 yuan / ton, an increase of 48.13% over the same period last year; the cost of coke per ton was 2394.91 yuan / ton, an increase of 58.8% over the same period last year. Overall, the gross profit margin of the coke business was 5.14%, down 6.38% from 2020.
In the first quarter of 2022, the company produced 884700 tons of coke, an increase of 3.3 percent over the same period last year, and sold 887300 tons of coke, an increase of 9.3 percent over the same period last year. The price of coke per ton was 2611.54 yuan / ton, an increase of 24.8 percent over the same period last year. In terms of cost, the unit price of clean coal purchased by the company in the first quarter of 2022 was 1954.79 yuan / ton, an increase of 65.68% over the same period last year.
The sharp rise in the cost side has compressed the profit space of the company's coke business.
The proposed cash dividend is 30.49% and the dividend yield is 2.45%. It is proposed to pay a cash dividend of 1.50 yuan (including tax) for every 10 shares, with a cumulative cash dividend of 384 million yuan, accounting for 30.49% of the net profit attributed to the parent company. Based on the stock price on April 25, 2022, the dividend yield is 2.45%.
Investment income is expected to thicken, supporting the company's profits. At present, affected by the epidemic, logistics is limited, and coke presents a weak situation of both supply and demand. if the epidemic is effectively controlled in the later stage, under the stimulation of infrastructure and real estate policies, demand is expected to pick up. However, the upstream coking coal trend is stronger, profits are eroded by the cost end, and the profit space of the main coking industry is limited. However, the company holds a 49% stake in China Coal Huajin, and its main coal products are national scarce, high-quality lean coal, with stable and strong sustainable profitability, which will be a favorable support for the company's profits.
Investment suggestion: we estimate that the return net profit of the company from 2022 to 2024 will be 1.993 billion yuan (1.993 billion yuan) for the return of the company's parent, the corresponding EPS will be 0.67 cusp 0.72 trillion 0.78, and the corresponding PE on April 25, 2022 will be 9 times, 9 times and 8 times respectively. Cover for the first time, giving a "cautious recommendation" rating.
Risk hint: macroeconomic growth is not as expected, China Coal Huajin investment income is not as expected, coke prices fell sharply.
