The volume and price of the company rose in 2021, the cost control was effective, the scale of impairment returned to the normal level, and the performance improved significantly. Q1 in 2022, the company's production and sales volume declined and costs increased due to short-term geological problems, but under the current coal price expectations, the company's annual performance is expected to maintain rapid growth. Taking into account the company's current undervalued state, upgraded to the "buy" rating.
Net profit increased more than fourfold in 2021 and Q1 performance increased in 2022 compared with the same period last year. In 2021, the operating income / net profit of the company was 8369x2014 million yuan respectively (year-on-year changes were + 91.84% Universe 4105.92%), and the net profit increased significantly, mainly due to the simultaneous increase in coal volume and price and the substantial reduction in non-recurrent losses, corresponding to EPS of 1.68 yuan. The profit distribution plan for 2021 is 0.55 yuan per share, the dividend rate is 32.74%, and the dividend rate is 6.5%. In the first quarter of 2022, the company realized operating income / net profit of 1.744 billion yuan, a year-on-year change of + 27.02%, a change of 82.89%, and a month-on-month change of-56.8%, mainly due to the influence of short-term geological conditions in some mines and a significant increase in mining costs.
The quantity and price increased in 2021, and the unit cost increased obviously due to the decrease of Q1 production in 2021. The company produced 13.72 million tons of coal in 2021 (+ 12.88% compared with the same period last year), all of which are thermal coal. Sales of coal 14.23 million tons (year-on-year + 8.66%), unit price 514.03 yuan / ton (year-on-year + 87.12%), unit sales cost 131.16 yuan / ton (year-on-year-12.79%). The gross profit of the company's coal business is 74.48% (an increase of 29.23pcts over the same period last year), and the net profit per ton of coal is about 140yuan / ton. The company's 2021Q1 coal production / sales volume is 2.8909 million tons respectively (compared with the same period last year), the average sales price is 585.48 yuan / ton (year-on-year + 61.62%), the unit sales cost is 249.60 yuan / ton (year-on-year + 48.36%), and the gross profit is 44.70% year-on-year. The company's methanol sector Q1 gross margin fell 384.12% month-on-month, mainly due to higher costs caused by rising raw coal prices.
There is clear room for expansion of coal production capacity, and lower taxes and fees will boost profits. According to the announcement of the company, the planned target of achieving a coal production capacity of 30 million tons by the end of the 14th five-year Plan was determined. Gaojiahe Coal Mine is actively going through the formalities related to capacity increase, and Hongqingliang Coal Mine is actively preparing to apply for capacity increase. Hongdunzi Coal Mine Hongyi and Hongdunzi Coal Mine are expected to be put into production in 2022 and 2023 respectively. In addition, the company is actively looking for coal mining projects in areas rich in coal resources. At present, the company can enjoy the preferential tax policies brought about by the large-scale development of the western region, and the enterprise income tax rate will be reduced by 15%. On this basis, Hongdunzi coal industry will also enjoy local preferential policies, exempting the local part of enterprise income tax in the first three years, and halving the local part of enterprise income tax in the fourth to sixth years.
Risk factors: methanol business long-term loss; coal production capacity expansion is lower than expected; coal price decline.
Investment suggestion: considering the expectation of high coal price in today's Ming Dynasty, we adjust the company's 2022~2023EPS forecast to 1.98 yuan (1.14 yuan in the original forecast) and add 2.32 yuan to the EPS forecast in 2024. The current share price is 8.46 yuan, which corresponds to 4.0max 4.3max 3.6x in 2022 and 2024. According to the industry average valuation level of 8 times PE and the company's valuation discount of 20% to 25% compared with the industry last year, we value the company 6 times PE in 2022, corresponding to the target price of 13 yuan, and raise it to "buy" considering the company's current undervaluation.
Rating.