This report is read as follows:
Volume and price rise, Q2 performance increased month-on-month; railway transport business increased significantly, methanol business loss; Hongdunzi coal mine provides sustained growth.
Main points of investment:
Maintain earnings forecasts and target prices, and maintain overweight ratings. The company issued a 2022H1 performance forecast, with a net profit of 858 million yuan (+ 35.97% plus 51.82%), which was in line with expectations, maintaining 2022, 2023, EPS 1.15, 1.32, and 1.41 yuan (an increase of 0.20 shares per share in 2021), maintaining the target price of 8.71 yuan, and increasing its holding rating.
Both volume and price rose, and Q2 performance increased month-on-month. The company's 22Q2 return net profit is 544-644 million (+ 18.52%-40.31%), with a forecast of Q2 performance center of 594 million and a month-on-month ratio of + 89.17%. At the revenue end, the volume and price both rose, and the cost side declined: 1) 2022Q2 coal output 3.9935 million tons, year-on-year + 12.76%, month-on-month + 43.12% Q1 affected by factors such as face adjustment in Gaojialiang Coal Mine, output dropped 15.87% compared with the same period last year, and Q2 resumed active production, and output increased greatly compared with the previous year. 2) the income of Q2 tons of coal is 596 yuan / ton, year-on-year + 33.80%, month-on-month + 1.82%. Entering the peak electricity consumption season in July, the daily coal consumption is accelerated, and the subsequent coal price is expected to remain high; 3) the average cost of Q2 tons of coal is 214 yuan / ton, which is 14.4% lower than that of Q1. The company strictly controls the cost and expects the cost to remain stable in the future.
The railway transport business increased significantly, while the methanol business lost money. 1) the railway transport business benefited from the good influence of the coal market, with an increase in transport volume and a significant increase in gross profit. Q2 railway transport volume was 1.8763 million tons (+ 20.80%) and gross profit was 26.7643 million yuan (+ 42.89%). 2) methanol business was affected by maintenance and high coal prices, production and sales decreased compared with the same period last year, Q2 sales volume of 74500 tons (- 38.28%), gross profit loss of 45.3052 million yuan.
Hongdunzi Coal Mine provides sustainable growth. The total production capacity of Hongdunzi Coal Mine is 6.6 million tons, accounting for 49% of the company's production capacity at the end of 2021, of which Hongyi and Hong2 coal mines under construction (both 2.4 million tons and 60% equity) are expected to be put into production in 2022 and 2023 respectively.
Risk hint: the macro-economy is lower than expected and coal prices fall faster than expected.