The upward catalytic performance of coal prices is realized, and the growth of capacity expansion is expected. Maintain the semi-annual report issued by the "buy" rating company, H1 achieved a net profit of 924 million yuan in 2022, + 46.4% compared with the same period last year, and deducted 930 million yuan in net profit, + 49.7% compared with the same period last year. Among them, Q2 achieved a net profit of 610 million yuan in a single quarter, + 32.7% year-on-year and + 94.2% month-on-month. There is a serious mismatch between global energy supply and demand, downstream demand remains strong, energy prices are high, while the company's production and operating activities remain stable, performance is fully released, we are optimistic about the annual performance. We maintain our profit forecast and estimate that the net return from 2022 to 2024 will be RMB 2.60 million for 2.90 million, compared with the same period last year. + 29.1%, 15%, 10%, 1.81, 2.08, 2.29 and 3.3 times for PE.
Hongdunzi Coal Mine Phase I (2.4 million tons / year) and Phase II (2.4 million tons / year) projects are expected to be put into production in 2022 and 2023, the coal production capacity has room for expansion, and the company can grow in the future. Maintain a "buy" rating.
Coal business: coal price hub upward, price compensation profit soaring year-on-year production and marketing: in 2022, H1 company achieved coal production of 6.7838 million tons, a slight decrease of 1.08% over the same period last year; sales volume of 6.8589 million tons, down 3.37% from the same period last year. The actual production / sales volume increased by 48,5989 million tons compared with the planned, outstanding achievement of the set production target. Among them, Q2 realized production / sales of 399.350.3968 million tons, an increase of 12.76 percent over the same period last year. In terms of selling price: the comprehensive selling price of tons of coal in the first half of the year was 591.64 yuan, an increase of 46.28% over the same period last year.
Of this total, the comprehensive selling price of Q2 tons of coal was 596.12 yuan, up 1.8 per cent from the previous month. In terms of gross profit, the gross profit per ton of coal in the first half of the year was 362.76 yuan, an increase of 39.96% over the same period last year. Of this total, the gross profit of Q2 tons of coal was 382.34 yuan, up 13.8 percent from the previous month, and the cost per ton of coal mainly decreased by 14.4 percent from the previous month. The company's commercial coal is mainly sold at the market price, and 30% of the sales structure belongs to chemical coal. In the coal price upward cycle, the performance flexibility may bring excess income.
Coal chemical industry and railway transport: methanol is dragged down by cost, performance is under pressure, and strong downstream demand supports railway transport volume methanol: production and sales volume: in 2022, H1 Company achieved 1646 million tons of methanol production / sales, a decrease of 27.58% and 28.39% compared with the same period last year, mainly due to equipment maintenance and the high price of raw material coal-fuel coal. In terms of gross margin:
The gross profit margin of methanol business in the first half of the year was-29.8%, down 28pct from the same period last year, mainly because the increase in costs was significantly greater than the increase in selling prices. Railway transport: during the reporting period, the revenue of railway business was 81.2689 million yuan, an increase of 32.05% over the same period last year.
The transport volume of the East Copper Railway was 3.6315 million tons, an increase of 16.4 percent over the same period last year, mainly due to the stable operation of the national economy as a whole and the strong demand for coal downstream. The gross profit margin of railway business in the first half of the year was 65.9%, which remained stable.
Actively layout new energy projects to help reduce carbon emissions & reduce production costs (1) Cathay Pacific Chemical 2.3MW distributed Photovoltaic Project: by the end of June 2022, the installation of photovoltaic modules has been completed, the cross-connection has been completed, and the remaining projects are being carried out as planned. (2) 6MW distributed photovoltaic power generation project in Hongqingliang Coal Mine: the feasibility study report has been completed and approved by Dalat Banner Energy Bureau in June 2022, with preliminary decision-making and construction conditions. (3) centralized photovoltaic project: the coal mining subsidence area of Gaojialiang and Hongqingliang Coal Mine has the conditions to build centralized photovoltaic. In order to maximize the utilization of resources, the company is carrying out preliminary work such as feasibility study. As a high energy consumption enterprise, the layout of photovoltaic projects can not only reduce carbon emissions, but also reduce future production costs, killing two birds with one stone.
Risk hints: economic growth is not as fast as expected; coal prices have fallen sharply; increased security checks have led to production suspension and reduction