This report is read as follows:
Benefit from coking coal boom year-on-year improvement, performance improvement, in line with expectations; double coke weak, Q3 performance declined month-on-month; coking coal prices rebounded, Q4 investment benefits increased, coal-coke will increase in the future.
Main points of investment:
Raise the profit forecast, maintain the target price and increase the rating. In the first three quarters of 2022, the company had revenue of 9.4 billion yuan (+ 14.9%), net profit of 2.71 billion yuan (+ 46.6%) and non-net profit of 2.67 billion yuan (+ 45.2%). It benefited from the year-on-year improvement of coking coal boom and improved performance, in line with expectations. In view of the fact that the company corrected the accounting errors in the first quarterly report of 2022 (the revised net profit of 22Q1 was 1.12 billion yuan, which was 580 million yuan higher than that before the revision), and the price of Q4 coking coal rebounded, the company raised its 24-year EPS to 1.21,1.37,1.58 (formerly 0.78,0.92,1.07) yuan, maintaining the target price of 6.86 yuan and increasing its holding rating.
Shuangjiao weak, Q3 performance declined month-on-month. The company's 22Q3 revenue is 2.84 billion yuan (month-on-month ratio-17.6%) and return-to-mother net profit is 620 million yuan (month-on-month ratio). The main reasons are: 1) Q3 investment income is 880 million yuan, a decrease of 170 million compared with the previous month. The company's investment income mainly comes from China Coal Huajin, which has a 49% stake. China Coal Huajin mainly sells market-oriented coking coal, and Q3 coking coal prices are reduced, resulting in a decline in profit. 2) after excluding the investment income, the company's Q3 operating profit was-270 million yuan, and the loss increased by 190 million compared with the previous month, indicating that the loss of the company's main coke and coking products increased, mainly because the double coke decreased in the same direction, and the price difference continued to decrease. It is worth noting that the company Q3 actively adjusted the product sales structure, and the sales volume of coke (- 7.8%) and methanol (- 12.2%) decreased. On the contrary, it can be promoted such as asphalt (ring ratio + 53.0%), carbon black (ring ratio + 177.8%) and so on.
Coking coal prices rebounded, Q4 investment benefits are expected to increase. According to wind, the average October price of lean coal in Rizhao Port (produced in Shanxi) is 2350 yuan / ton, an increase of 212 yuan over Q3. With the increase in the price of coking coal, Huajin, which contributes to the company's main performance, will benefit, investment income is expected to improve, and Q4 performance is expected.
Both coal and coke will increase in the future. China Coal Huajin's Libi Mine of 4 million tons (anthracite) and the company plans to build 1.44 million tons of coke capacity, which are expected to be put into production in 2024.
Risk hint. The macro economy fell short of expectations; coal prices fell more than expected.
