The company has lost money for two years and will be * ST after the annual report. this is not the right time to intervene. The annual production and sales volume is expected to be 10 million tons in 2017. assuming that the average price of Q5500 in Qinhuangdao is 550and the EPS is 0.41, the valuation is not expensive; this year, Li Chong, chairman of Shenhuo Group, was transferred to chairman of Zheng Coal Group, and the expectation of state-owned enterprise reform is expected to rise. In the short term, we give it a "neutral-A" rating and suggest waiting for the layout opportunity after ST.
Production capacity: the approved production capacity is 10.75 million tons, of which 2.35 million tons will be launched at the end of the year. At present, the company has seven pairs of production mines, with a capacity of 10.75 million tons approved in 330days, of which the production capacity of equity is 9.06 million tons, accounting for 84% of the total. The type of coal is power coal, and the company does not have a coal washing plant and sells it directly to raw coal. The 1.9 million-ton Micun Mine and the 450000-ton Jiaojiao No.2 Mine will be launched at the end of the year, but will not affect this year's production, which will be affected next year. After the withdrawal of two pairs of mines, the company's production capacity will be reduced to 8.4 million tons. In addition, the company is no longer building mines.
Output: coal production and sales are estimated to be 10 million tons in 2017. The company's coal production and sales have remained at the level of 11 million tons in recent years, the Kaolin mine was closed in 2016, and the company is expected to produce 10 million tons of coal in 2017. After the withdrawal of Micun and Jiao No.2 Coal Mine this year, coal production is expected to drop to 8 million tons in 2018.
Price: at present, the price of raw coal excluding tax is 450-480 yuan / ton, which is basically back to the level of 2013. If the center of Qinhuangdao Q5500 thermal coal is 550-570 yuan / ton in 2017, we estimate that the comprehensive price of the company will be between 385-400.
Cost: the company's complete cost per ton of coal is about 320 yuan, and the cost will still be controlled in 2017.
Profit forecast and rating: give a "neutral-A" rating. Assuming that the average price of Q5500 in Qinhuangdao is around 550in 2017, the company is expected to have a comprehensive coal price of 385 yuan per ton, a complete cost of 320 yuan per ton, a net profit of 55 yuan per ton of coal, a sales volume of 10 million tons, and an equity share of 84%. It is estimated that the net profit of coal is 460 million, the other losses are 50 million, the net return to the mother is 410 million, and the EPS is 0.41. Due to the company's two-year loss, the annual report will be * ST, now is not the right time to intervene. Li Chong, chairman of Shenhuo Group, was transferred to chairman of Zheng Coal Group this year, and the reform of state-owned enterprises is expected to rise. It is proposed to focus on Zheng Coal in 2017. In the short term, we give it a "neutral-A" rating and suggest waiting for the layout opportunity after ST.
Risk hint: macroeconomic recovery is lower than expected