The performance of the company continues to improve, and the profitability is gradually improved. According to the third quarterly report of 2018 released by Baotailong, the company achieved operating income of 2.604 billion yuan in the first three quarters, an increase of 28.76% over the same period last year, and a net profit of 276 million yuan, an increase of 89.675% over the same period last year. Realize EPS 0.17 yuan. Based on the analysis of the company's performance in recent years, benefiting from the impact of supply-side reforms in the coal industry since 2015, the company's performance has achieved significant growth in 2015 and 2016. In 2018, the market of coal chemical products is good, and the production and sales volume and gross profit margin of the company's coal chemical products have been improved to varying degrees, resulting in outstanding performance in the first three quarters of 2018.
The advantage of resources is obvious, and the competitiveness of circular economy is gradually emerging. In accordance with the principle of "reduction, reuse and resource utilization", the company strives to extend the industrial chain of circular economy, making full use of the company's resource advantages, and strives to implement the development strategy of "extending the coal chemical industry chain and vigorously developing circular economy". It has formed a circular economy industrial chain of "coal coke, coke gas, methanol synthesis, stable light hydrocarbons, coking waste heat power generation, coking by-product coal tar deep processing, power plant residual steam heating".
With the expansion and extension of the industrial chain of circular economy, the company's products are becoming more and more abundant, covering many industries such as "coal, electricity, chemical, materials, heat, oil", and maximizes the utilization of coal resources through a complete industrial chain of circular economy. to achieve good economic and social benefits.
The prices of coking coal and related coal chemical products are expected to continue to operate at a high level. Since 2017, the demand of China's coking coal market has increased rapidly, and the domestic coke price has risen sharply. It has maintained an upward trend in the first half of 2018, but has entered a period of relative balance. In the future, with the growth of scrap production and stricter environmental protection policies, the market price of cooked coke will still be high; driven by the substantial growth of the electric vehicle industry and the price difference of raw coke, the price increase of raw coke will be higher than that of cooked coke. All in all, the domestic coking coal market as a whole will continue to operate at a high level.
Profit forecast: we forecast that the EPS of the company from 2018 to 2020 will be 0.22,0.22,0.23 yuan respectively, corresponding to 25.9,26.6 and 24.8 times of PE respectively.
Risk tips: 1) the macroeconomic growth rate is lower than the expected risk; 2) the development of the energy cycle industry chain is lower than the expected risk; 3) the risk of continuous replacement of new energy.
