Event: on July 9, 2022, the company issued a half-year performance forecast for 2022. It is estimated that the net profit belonging to shareholders of listed companies in the first half of the year is 3.3-390 million yuan, an increase of 94.94%-130.38% over the same period last year; net profit after deducting non-recurring profits and losses is 3.29-389 million yuan, an increase of 98.37%-134.55% over the same period last year.
22Q2 single-quarter performance year-on-year outstanding, month-on-month stability. The net profit of 22Q2 in the single quarter was 0.58 billion yuan to 118 million yuan, an increase of-14.71% to 73.53% over the same period last year. Compared with 22Q1's net profit of 272 million yuan, the month-on-month decline was mainly due to a sharp increase in government subsidies in the first quarter. Compared with 22Q1's net profit of 96 million yuan after deducting subsidies, 22Q2's performance remained basically stable.
The volume and price of coalbed methane increased steadily, and the performance benefited from the new high price of natural gas. The conflict between Russia and Ukraine has strained global LNG supplies, international natural gas prices have risen sharply, and domestic LNG prices have also risen synchronously and reached new highs. According to Wind, the average national LNG price of 22Q1 is 4.65 yuan per cubic meter, and 22Q2 rose to 5.21 yuan per cubic meter, up 12.0 percent from the previous month and 101.4 percent from the same period last year. The company focuses on increasing reserves and production, deeply taps the production potential, increases market development efforts, and increases the unit price and sales volume of coalbed methane in the first half of the year. According to the company's announcement, 22Q1, benefiting from the sharp rise in natural gas prices, the unit price of CBM transported by the company has increased to 1.84 yuan per cubic meter (1.64 yuan per cubic meter in 2021), and the unit price of CNG is 1.83 yuan per cubic meter (1.81 yuan per cubic meter in 2021).
Government subsidies have increased sharply, contributing more than 30% of profits. In the first half of 2022, the government subsidy announced by the company totaled 193 million yuan, an increase of about 173 million yuan over the same period last year, of which the profit and loss recognized by the company was 175 million yuan. Deducting income tax at 25%, the government subsidy is expected to contribute 33.7% of the net profit of 39.8%.
When increasing reserves and production, the transport capacity is expected to be improved. The production process of the company has been continuously accelerated. by the end of 2021, the company has completed three-dimensional seismic exploration in some areas of Shunhengling, Wuxiang South and Liulin Shixi, and submitted proved reserves reports of coalbed methane in some areas. the annual production capacity of the company's planned and Shunhengling, Wuxiang South and Liulin Shixi blocks are 300 million cubic meters per year, 200 million cubic meters per year and 100 million cubic meters per year, respectively. The production of coalbed methane can be released in the future. In terms of reserves, the company won 5 new coalbed methane exploration rights in 2021, with a total area of 84.58 square kilometers, with abundant resources potential. In addition, the company is under construction in the west-east long-distance gas pipeline project investment progress of 95.5%, Huaxin gas to the company's equity succession work is under way, the company's coalbed methane transport channels are expected to be further expanded in the future.
Investment suggestion: as the company's coalbed methane sales include long-term association sales and market price sales, considering the sharp rise in natural gas prices, we expect that the company's performance flexibility will be greatly released. In 2022-2024, the company's return net profit will be 6.92 million yuan, and the corresponding EPS will be 0.72, 0.89 and 1.09 yuan respectively, slightly lowering the profit forecast. The PE corresponding to July 11, 2022 is 15 times, 12 times and 9 times respectively, maintaining the "recommended" rating.
Risk hints: the risk of coal seam price decline; the risk of gas well exploration and exploitation not up to expectations; the risk of insufficient policy support.