Anhui Province, which is backed by Huainan Mining Group, is a state-owned enterprise and has undergone many transformations.
Wanjiang Logistics is a quasi-public utility company with the integration of coal and electricity and the combination of operation and operation. after several adjustments, Wanjiang Logistics and Huainan Mining, the controlling shareholder, completed a major asset restructuring in 2016. the company's business scope has been expanded from a single logistics / trade advanced to a diversified "energy + logistics" business to thermal power generation business, railway transport business and port business. 2017H1 achieved revenue of 4.529 billion yuan and gross profit of 575 million yuan, of which coal contributed 271 million yuan, accounting for 45%, and railway transportation contributed 242 million yuan, accounting for 40%. Coal and railway transportation have become the mainstay, with gross profit margins of 58.21% and 30.54%, respectively.
A quasi-public utility company that integrates coal and electricity and combines operation
Wanjiang Logistics is mainly engaged in coal production / trade business, thermal power generation business, electricity sales business, railway transport and port business. Through the construction of the industrial chain expansion path of the integration of coal and power and the combination of operation, so as to avoid the risk caused by the fluctuation of a single coal price, further stabilize the company's profits and create quasi-public utilities with regional advantages in East China. The future company continues to advance with the coal supply-side reform. 2) the feed-in price of coal and power may increase in the future, 3) the integration of coal and power will smooth the risk of periodic fluctuation of coal price, 4) the regional monopoly advantage of railway plate is obvious, and 5) the port coal loading and unloading and container foreign trade logistics will be carried out at the same time. The company will become a quasi-public utility company integrating coal mining, coal sales, power generation, electricity sale, railway transportation and port transshipment in the coal industry chain. The competitive advantage is obvious.
Set sail again in the wind of state-owned enterprise reform
In 2015, the State Council issued the guidance on deepening the Reform of State-owned Enterprises, marking the comprehensive start of deepening the reform of state-owned enterprises in the new era. In response to the call of the national reform, the Anhui Provincial Party Committee put forward in the "implementation opinions" that "focus on promoting the overall listing to develop the economy of mixed ownership, orderly promotion of employee shareholding in mixed ownership enterprises and injection of assets by actual controllers." We believe that Huainan Mining has also gradually made efforts in the process of promoting the listing of the group as a whole, with frequent actions in the past year: 1) in 2014, Wanjiang Logistics was proposed as a platform for the main assets to enter the capital market; 2) the 2016 announcement will fulfill the major asset restructuring commitment to promote the overall listing; 3) the disclosure plan is to divest Huaikuang Real Estate in 2016. 4) it was disclosed in July 2017 that the overall restructuring plan had been submitted by the provincial state-owned assets to the provincial government for approval, and strategic investors would be introduced to increase the capital of Huainan Mining in cash in the future.
Profit forecast
The reform process of Wanjiang logistics state-owned enterprises is gradual and orderly, and the overall injection of assets is not considered for the time being. We estimate that the return net profit of the company from 2017 to 2019 is 502 million yuan, 596 million yuan and 672 million yuan respectively, and the corresponding EPS is 0.13,0.15 and 0.17 yuan respectively. The 18-year forecast results correspond to the current PE26.8 times. Cover for the first time, give buy rating, target price 5.32 yuan.
Risk hint: China's macro-economy is declining, coal prices are falling sharply, the demand for thermal power continues to decline, and the reform of state-owned enterprises in Anhui Province is not as good as expected.
