This report is read as follows:
Coke price increases, profits decline, participation in China Coal Huajin increased profits, 2021 annual performance improved; Coke fell, investment income increased, 22Q1 performance improved; Coke high boom continued, Wangjialing mine after the recovery of high profits sustainable.
Main points of investment:
Lower the profit forecast and target price, and maintain the overweight rating. The company's 21-year revenue was 11.23 billion (+ 58.1%), the return net profit was 1.26 billion (+ 14.9%), the dividend per share was 0.15 yuan; the 22Q1 revenue was 3.12 billion (+ 33.0%), and the return net profit was 540 million (+ 19.7%). Due to the increase in coking coal cost, the profit fell back, and the performance was slightly lower than expected.
In view of the continued high prosperity of coking coal and shares in Wangjialing Mine due to the limitation of production safety, the company lowered its EPS for 22 years to 0.78,0.92 (formerly 1.00,1.09) yuan, predicted 24-year EPS to 1.07 yuan, gave the company 2022 9xPE according to the industry average, lowered the target price to 7.02 yuan (formerly 8.0) yuan, and increased its holding rating.
The price of coke increased, the profit decreased, the participation of China Coal Hua Jin increased its profit, and its annual performance improved in 2021. In 2021, the company's coke production and sales were 3.46 million tons, respectively, compared with the same period last year, the coke price was 2525 (+ 821) yuan / ton, and the volume and price rose to achieve revenue of 8.74 billion (+ 53.2%), but affected by the continuous rise of raw material coking coal, the coke sales cost was 2395 (+ 887) yuan / ton, the cost increase exceeded the selling price, and the coke business gross profit was 450 million (- 31.8%). Although the profits of the main coke industry declined, Huajin of China Coal achieved a net profit of 5.08 billion (+ 84.5%) in 2021, and the company recognized 1.86 (+ 2.8) billion investment income. In addition, due to asset impairment, Feihong Chemical (75% equity) made a net profit of-920 million in 2021, while its loss rose sharply from-30 million in 20 years.
Coke fell, investment income improved, 22Q1 performance improved. The company's 22Q1 coke sales volume of 887000 tons (+ 3.3%), the price of 2611 yuan / ton (+ 36.4%), but due to the increase in raw material costs, excluding investment income, the operating profit of the main business is-120 million (- 200.8%). Benefit from coal Huajin increased profits, investment income of 660 million (+ 99.4%), helping to improve performance.
The high prosperity of coking coal continues, and the high profit after recovery of Wangjialing Mine is sustainable. China Coal Huajin Wangjialing (7.5 million tons) due to safety production restrictions, is expected to continue to contribute to revenue after resumption of production.
Risk hint. The macro economy fell short of expectations; coal prices fell more than expected.