In the second quarter, the gross profit decreased by 40 million yuan compared with the previous quarter, and the loss increased by 190 million yuan over the same period last year.

The company expects the gross profit of the coal business in the first half of the year to be-230 million yuan, compared with 340 million yuan in the same period last year; the company's gross coal margin in the first quarter is-130 million yuan, and that in the second quarter is-90 million yuan. The company made a net loss of 470 million yuan in the first quarter, equivalent to a loss of 0.20 yuan per share.

In the first half of the year, commercial coal output decreased by 30% compared with the same period last year, and the gross profit per ton of coal was-39 yuan per ton.

The company's commercial coal output in the first half of the year was 5.76 million tons, down 30% from the same period last year; the sales volume of commercial coal was 5.8 million tons, down 21% from the same period last year; the price per ton of coal was 200 yuan / ton, down 22% from the same period last year; the cost per ton of coal was 239 yuan / ton, up 14% from the same period last year; gross profit per ton of coal was-39 yuan per ton, compared with 42 yuan per ton in the same period last year. In the second quarter, the company's commercial coal output was 3.61 million tons, down 13% from the same period last year; the sales volume of commercial coal was 3.81 million tons, up 5% from the same period last year; the price per ton of coal was 192 yuan / ton, down 19% from the same period last year; the cost per ton of coal was 216 yuan, up 4% from the same period last year; gross profit per ton of coal was-25 yuan per ton, compared with 23 yuan per ton in the same period last year.

Two main mines have been shut down with a production capacity of 6.1 million tons per year.

The company has approved a production capacity of 17.8 million tons per year, of which two main mines have stopped production. Qianqiu mine (production capacity of 2.1 million tons / year) has experienced three times of rock burst, so it is difficult to resume production in the future. Gengcun Coal Mine (with a production capacity of 4 million tons / year) has stopped production since December 22, 2015 due to casualties.

There is more room for asset injection in the future, and the interest within the group affects the injection rhythm.

Henan Energy Group, the controlling shareholder, has approved a production capacity of 103 million tons. Among them, the smokeless coal mine under Yong Coal Holdings is superior to Yi Coal Group in terms of coal quality. We expect Dayou Energy to become a coal listing platform for the new group in the future, but we need to coordinate the interests of all parties within the group.

It is estimated that the company's EPS earnings per share in 2016-18 will be-0.57,0.02 and 0.03 yuan respectively.

Although the company has more room for epitaxial growth, there is uncertainty about asset injection, and the company's current valuation is high, and we maintain a "hold" rating.

Risk hint

Group interests affect the rhythm of asset injection; the CSRC is filing a case for review of the company.