Introduction to this report:

Supplementing with price and excellent fee control, performance increased sharply in '22, with a dividend rate of 48%, exceeding expectations; accounting costs fell, and Q4 single-quarter performance reached a record high; it is planned to sell 7.64 million tons of commercial coal in '23, up 9% from actual sales in '22.

Key points of investment:

Maintain profit forecasts and target prices, and increase ratings. The company achieved revenue of 8.4 billion yuan (+24%) in 2022, net profit of 2.5 billion yuan (+81%), and a dividend of 1.0 yuan per share. The corresponding dividend rate was 48%. The dividend exceeded expectations. Maintain the company's EPS of 2.53 and 2.56 yuan in 23-24, forecast EPS of 2.65 yuan in 25, maintain the target price of 12.53 yuan, and increase the rating.

Supplementing with price, excellent fee control, and a significant increase in performance in '22. The company's raw coal production in '22 was 9.34 million tons (-8%), and commercial coal sales were 7.04 million tons (-5%). The main reason for the decline in production and sales was 500,000 tons in a single quarter due to the epidemic in 22Q4. Thanks to the high boom in the coking coal market, the company sold 1,119 yuan/ton per ton in '22, an increase of 335 yuan/ton over the previous year. On the cost side, the increase was less than the price. The increase was less than the selling price. The increase was less than the selling price. The company's coal business achieved gross profit of 4,300 million yuan, an increase of 51% 8PCT Furthermore, the company's ability to control fees continues to improve. With the sharp increase in operating income from 20 to 22, the company's four fees accounted for 19%, 16%, and 13% of revenue, respectively, and continued to decline.

Accounting costs fell, and Q4 single-quarter results reached a record high. 22Q4 achieved net profit of 900 million yuan (+60%) +25% month-on-month, mainly due to the cost of Q4 tons of coal of 235 yuan, a decrease of 345 yuan over the previous quarter, and operating costs of 400 million yuan to 700 million yuan month-on-month. The cost of a ton of coal fell or because related costs for the first three quarters were calculated in advance. The company's 22Q4 “cash to buy goods and receive labor payments” was -1.81 billion yuan in a short-term increase, and there will be growth in the future. 1) The company plans to sell 7.64 million tons of commercial coal in 23 years, an increase of 9% over the actual sales volume in 2022; 2) The company invested 440 million yuan in 46% equity investment to establish Suzhou Wanheng New Energy to build 800,000 kilowatt new energy projects; 3) Shareholder of Northern Anhui Coal and Power has an unsecured coal production capacity of 17.8 million tons, and the company has room for asset injection.

Risk warning. Coal prices fell more than expected; production fell more than expected.