Coke prices have risen sharply, and the company's profits are expected to improve significantly. The company is located in the most important coking coal production area in Northeast China and the largest anthracite production base in Heilongjiang Province. It has obvious resource location advantages. It now has a coal mining capacity of 1.18 million tons, coal washing capacity of 3.9 million tons and coke production capacity of 1.58 million tons. Since the beginning of this year, benefiting from capacity clearing and supply-side reform, China's coal coking market has a tight balance between supply and demand, the prices of related products have risen sharply, and the company's profits are expected to be significantly improved.
The company has obvious advantages in circular economy, and the profit of coal chemical industry is expected to improve due to the rebound of oil prices. The company actively develops the circular economy model, establishes the "coal-electricity-chemical-oil" integrated industry chain, the cost advantage is obvious. The prices of the company's coal chemical products such as methanol, crude benzene and fuel oil are significantly affected by international oil prices. In the second half of 2016, with the recovery of oil prices, the domestic price of methanol rose to 2800 yuan / ton, and the price of crude benzene also showed signs of warming. We expect that with the recovery of oil prices, the gross profit margin of the company's coal coking business is expected to return to the normal level.
The company is actively transforming the layout of graphene new materials industry. In recent years, the emerging material graphene industry has developed rapidly, and its production and application in low-end fields have begun to take shape. Graphene has great application potential and commercial value. According to BBC research, the global graphene market may exceed 1.3 billion US dollars in 2023, and there is a broad space for market growth. The company is actively transforming the graphene new material industry, through the purchase of graphene production patent technology, the establishment of R & D center, to build a graphite industry cluster, focusing on the development of graphene, power battery industry. At present, the company's 100 tons / year graphene project has entered the commissioning stage.
Profit forecast and investment rating: according to the company's existing equity (excluding additional issuance projects), we expect the company's EPS to be 0.10,0.15,0.21 yuan in 2016, 2017 and 2018, respectively, and the PE corresponding to the closing price (7.28yuan) on January 03, 2016 is 76,47 and 35 times respectively. Considering the future transformation and layout of the company in the new materials industry, we give the company a stock target price of 7.8 yuan, giving the company an "overweight" rating for the first time.
Stock price catalyst: coal and coke prices remain high, oil prices have risen sharply, the downstream industrialization of graphene has made a breakthrough, and the state has promulgated policies related to graphene industry.
Risk factors: in the future, oil prices will continue to be low, coal and coke prices will fall sharply, and the process of graphene industrialization will not be as expected.